Of course there are all kinds of dimensions to the U.S. relationship with China. But does it need to be much more complicated than the fact that China holds almost $900 billion in U.S. Treasury bonds, notes and bills? That and we know for sure that we're going to have to borrow more from them because, very simply, our government will continue to spend more than we take in.

In total, lenders from Japan and China hold 44% of U.S. foreign-owned debt. This exposure to potential financial or political risk should foreign banks stop buying Treasury securities or start selling them heavily was addressed in a recent report issued by the Bank of International Settlements, which stated, "'Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, a sudden rush for the exits cannot be ruled out completely."

Dr. John Rutledge, one of the principal architects of President Reagan's economic plan in 1980-81 and an adviser to the Bush White House on tax policy recently said the following...

China is not going to stop buying U.S. securities but they have become our biggest creditor–too big to ignore what they are thinking. China is concerned that the U.S. government is spending too much money, that our budget deficits are too big, that our debt is growing too fast, and especially that the Fed has printed so much money in the last year we will have significant inflation in the future. Their government has not decided what they can do to protect their investments in the U.S., but are actively evaluating what their strategy should be.

So is our welcome to the Chinese President with a state dinner and much pomp and circumstance any more complicated than being nice to the lender to whom you owe a huge amount of money, knowing that you will need to borrow a whole lot more in future years?

It's pretty simple really.