I don't "blame China" as I believe it is natural for individuals and nations to act on what they perceive as their own self interest. That is why I am quite confident that when China concludes it will be a long term gain for them to take a one time loss on their remaining holding of US dollars in reserves they will dump those bonds to destroy the dollar and send US and EU into long lasting "greatest ever" depression. That will effectively remove the US and EU as competing bidders for the oil, food stocks, and raw materials every year for more than a decade. I.e. If not already in deepest ever depression, China will send the US there when the every year savings, discounted to present value, exceed the one time loss it will take by dumping bonds to destroy the dollar. There are other conditions also: Mainly the US and EU will need to be relatively unimportant as trading partners for China, so China is now rapidly growing domestic consumption and exports to other Asian nations. It has recently signed free trade agreements with eight of them and is negotiating same with five more. For example now S. Korea has China, not the US, as main trading partner. Also an increasing part of China's productivity is now obligated in long term contracts for imports it will need, and mainly in Africa, they will be paid for by China building needed infrastructure (ports, railroads, hydro-electric dams, telecom facilities, hospitals, schools, roads etc.). Even in depression, the US will continue to supply China with food stocks, especially soybean, corn and their oils plus coal and a few other low value added raw materials. With the funds earned by these exports (No more loans from China for buying) the US will be able to continue to buy a minor part of China's high value added electronics etc. exports. I.e. The US will become an "economic colony" of Asia, especially China with a nearly balanced trade (like India had for 100+ years when a colony of Great Brittan). *Link at: http://www.uschina.org/statistics/tradetable.html That link also states: Latest data for 2009 and net trade was DOWN by 10.6% and that is the first absolute decrease in more than a decade. Joe American is trying to save or reduce his debts so not buying so many unneeded junk items from China now. I.e. US imports from China, according to your {above} link, were DOWN by 12.3% This is also the first time with an absolute decrease. I.e. already US is growing less important for China and was passed by EU two years in China's trading accounts. In part this is because China wants more Euros and less dollars in its reserves so is now lending to EU government like it once lent to the US for them to buy Chinese goods.
Here is one reason: Please Register or Log in to view the hidden image! Many of the 25 million small Chinese cotton producers are hording their crop - waiting for the price to climb even higher. (It is now at a historic high.) Until yesterday the historic top price for cotton, inflation adjusted, was set during the US civil war. The North was using Fort Sumter, which sits on an island in Charleston SC harbor to stop the export of "King Cotton" most of which went thru that port as it was both the shortest route from southern port to England and the closest to the main cotton growing region. The North was trying to force the South to sell its cotton for less to its less efficient than English mills that then existed in New England, mainly where there was water power for the looms. Whenever you step on some one's economic throat, you are likely to provoke them - that is why the civil war started with the south firing on Fort Sumter. The north really started the civil war - very much like Brittan started WWII by closing the St. of Malacca to Japanese oil tankers with their fleet based at Singapore. Churchill had been assured that Singapore was secure, but the Japanese navy soon captured it, with thousands of Brits forced to flee north into the Jungle. Then the US assembled the entire pacific fleet into a staging area, called Pearl Harbor with the intent to form an unstoppable naval strike force to save the trapped Brits and reclose the St of Malacca. The Japanese knew they could not stop the US armada, once it set sail, so in desperation they attacked Pearl Harbor, which the US had assumed was a safe staging area - impossibly far from Japan and Japanese controlled waters. Again the Japanese proved to be more capable than either the British or US high naval command thought. Two lessons to be drawn from all this have been stated as: "The victors get to write the history books." & "The victors did not start the war" is what is written in those books. Or as is also often said: "Truth is the first casualty of war."
