One of the amber-hardened pieces of conventional wisdom is that the CCP has us over a barrel, because they own so many U.S. Treasury notes.

Hardly anyone bothers to look at the equation from Zhongnanhai’s point of view.

The CCP didn’t come into all of this American debt by accident. They bought our bonds in a deliberate attempt to overprice the dollar and underprice their own currency so they could export more to us. While much of the focus here has been the effect of the CCP’s currency manipulation on American jobs, our allies in Asia have been far more hard hit as the ChiComs moves in on their export markets.

The results are only half clear: while Chinese exporters have done very well, the regime has to keep buying our bonds or the whole thing collapses. In other words, the CCP can’t get rid of our bonds without triggering a deep recession at home. Given that the number of antiregime protests are already double what they were a decade ago (and the fact that labor costs are finally catching up to the rest of the world), that’s a huge problem.

It may not be one they can avoid, though. According to an Epoch Times reoprt, the bond-buying spree increased the domestic money supply at a rate of seven times economic growth. This has, of course, led to serious inflation problems, to which the cadres have responded by fudging the numbers (same link). Imagine that.

Meanwhile, Hong Kong, which was supposed to be the jewel the cadres could exploit for decades, has become a political embarrassment (Epoch Times) on top of the usual human rights problems (Epoch Times).

Making matters worse, their Korean de facto colony is in such bad shape that even military units are starving (One Free Korea). In other words, no one  is going to just sit and wait for the painful adjustments the CCP has to make in order to get the economy off its export fix – least of all the Chinese people.