New York Times,Dec.26,2008 pages A1,A14

Dollar Shift: Chinese pockets filled as Americans emptied theirs:
Professor of Economics Ben Bernanke proposed the theory in March 2005 at Princeton University that Americans to borrow from the Chinese.
In the past decade, China has invested upward of $1 trillion mostly earnings from exports into American government bonds and government-backed mortgage debt. That has lowered interest rates and helped fuel a historic consumption binge and housing bubble in the US. Alan Greenspan was in charge of FED then.
For the past 5 years, China has been one of the most prolific bidder. It holds $652 billion of US Treasury debt, up from $459 billion a year ago. China owns $1 of every $10 of America's public debt as per analysts' figures.

The US will depend on the Chinese to keep buying that debt, perpetuating the American propensity, economists say.

Francis Shieh a.k.a. Xie Shihao,a watcher of Sino-American Economics.