So basically whirled peas? Personally I would not be troubled by huge tariffs on chinese goods imported into the USA. I agree with The Donald, there should be toys manufactured in the US and tariffs to chinese imports should be raised until there are toys manufactured in the US. Repeat in every sector. If the chinese decide the don't wish to hold our debt let them "liquidate". People will end up paying the treasury to hold their money. Negative yields.
I also do not believe that QE2 will be stopped, but IF I were in Mr. Hu's or Mr. Kan's position I would use the opportunity to dump a huge amount of the bonds being held. This would be no different than any trader taking advantage of a known buyer of risky assets, which would get the best price while reducing holdings and risk. Something to consider; http://www.voanews.com/english/news/asia/Chinese-President-Arrives-in-Portugal--106819533.html http://www.voanews.com/english/news/IMF-Gives-China-More-Voting-Power-106816453.html http://www.voanews.com/english/news/africa/decapua-g20-preview-5nov10-106777613.html http://ipsnews.net/news.asp?idnews=53483
US still wants to consume for free tariffs will create temprorary double digit inflation and significantly lower standard of life altough a lot of pain is involved in this case. It's so easy just to print money instead of that