The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.
Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.
It is estimated that China holds over $900bn in a mix of US bonds.
This is yet another of those dirty little non-secrets which is neither a Republican problem or a Democratic problem. It's been going on for years. In order to shore up the dollar and give a false sense of security to those watching economic numbers, we've allowed the Chinese to stockpile our currency and tradables in such vast numbers that they can control the strength of the dollar as they choose.
As China continues its rise toward a position as a global superpower, both in military and industrial arenas, our interests and theirs are increasingly coming to be at odds. We're talking about a lot more than just poisoned cans of dog food coming into the country here. In human rights issues China is still one of the major transgressors in the world. Their teetering relationship across the straight with Taiwan is one which *could* remain stable, but could also blow up at any moment. Our interests in that area have been a tightrope for U.S. government officials, declaring that we endorse the "One China" policy while still pledging to support Taiwan's right to some form of autonomy. (This is a subject I've yet to hear the current crop of candidates address in detail, and I'd like to see somebody ask.) China also has the ability to launch military action against anyone in their neighborhood with little to no notice, and there's nobody in the area who could realistically stand against them.
In all of these areas and more it would be in the best interest of the United States to remain in a position to apply real pressure on the Chinese to avoid problems exploding to unmanageable levels. We have sacrificed that ability by allowing the Chinese to tie us up on a dog leash of currency and bonds. We play ball with them or they could send our country into a tailspin of depression era proportions. Any cure for this, unfortunately, will be a long term plan and require a lot more sacrifice than Americans are generally willing to tolerate or our cowardly politicians are willing to ask of us.
The end of our sole superpower status may well come not with the bang of a gun or missile, but with the whimper of an empty wallet.