China's Smack Addiction Continues Unabated

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No wonder they want to invent a reserve currency that has some merits over the United States Dollar. It would be a form of methadone treatment:

China, the U.S. government's biggest creditor, increased its purchases of American securities in February just weeks before the country's officials questioned whether such investments were safe.
While China's purchases slowed and most were in short-term Treasury bills, the country remained the largest foreign holder of Treasuries after its holdings rose 0.6 percent to $744.2 billion, according to a monthly report released in Washington.

We have long considered hollow the cries that the Chinese might abruptly cut off their large-scale purchasing of Treasuries. To do so would be cutting their own throat as their own prosperity is tied quite directly to their ability to find and fund customers for their chief exports (cheap labor and manufacturing). It is worth pointing out that Chinese leaders are not afraid of being deposed. They are afraid of being shot if they break the grand bargain they struck with their subjects: keep us in power, we'll give you a taste of capitalism and the trappings of upward mobility, but we will manage that social stuff and political voice for you.
China Bought More U.S. Securities Even as Its Concerns Grew [Bloomberg]

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