The US does not have China by its throat or vice versa. Rather, both countries are dependent on each other not screwing up (The US a little less so by virtue of much larger economy). The US has a $14 trillion dollar economy. China holds almost $2 trillion of US$. That's a significant chunk. If China starts selling off it's dollar reserves in the market tomorrow (substituting them large scale for Euros, Yen, etc) then that will cause a large drop in the value of the dollar, thereby creating a ripple effect around the world. The global economy would take a beating, including China's whose $ reserves would diminish in value overnight. At the same time, when the US economy tanks, like it has now, China's $ reserves (which are mostly invested in US stocks and assets) would drop rapidly (as in this case, where the growth in their reserves compared to last year was negative). Thankfully, because of this MAD scenario, neither US nor China would go down the path of economic confrontation. Their economies have been too intertwined since Nixon's opening up to the Chinese in the 1970s.