China’s foreign exchange (‘forex’) reserves and its holdings of U.S. government debt are two of the most frequently misunderstood issues in relations between the two countries. Recent events have underscored this problem. On September 18^th, a car carrying Gary Locke, the U.S. Ambassador to China, was surrounded and partially attacked in a sideshow to an outbreak of Beijing anti-Japanese protests over the Senkaku/ Diaoyu islands. The attackers allegedly shouted anti-American slogans, including the cry “Pay us back our money” – a reference to Chinese investments in U.S. government debt. Then, a poll by the Pew Institute again demonstrated worried opinions in the U.S. about China’s large holdings of U.S. debt. The poll showed that 78% of the general public surveyed thought that Chinese holdings of U.S. debt are a “very serious problem”.

Read Here – The Diplomat