Well, what about it?
As we often do in our articles: let's back up first.
China continues to go through a bit of an economic swoon (it's too early to call it anything else, still) currently, as we've detailed in our stock market articles on the subject recently. And, yes, "feelings" do matter in stock markets - those mushy things that can't really be simulated on a computer. But the fact remains: US exports to China are relatively small. We did roughly $123.6 billion in exports in 2014 according to the Census Bureau - that in a $17+ trillion GDP.
However, some folks have asked: doesn't China own a lot of the US's debt? Can't that be an issue?
US Debt to China
Yes, China has a relatively large holding of US Debt. However, it is dwarfed by the amount of US Debt which is held domestically - that is, by US Citizens, on behalf of US Citizens by other programs (such as, say, Social Security's Trust Fund), the Federal Reserve and debt held by other US Agencies. China is the largest foreign holder of US Debt, with a total of $1.2712 trillion in holdings attributed to mainland China. Hong Kong, which has been under Chinese control since the late 90s, also holds another $181.3 billion.
Here's a graph of Chinese (and Hong Kong) US debt holdings, along with Japan, since last year:
While one and a half trillion in debt is nothing to sneeze at, it comes in a world where foreign investors hold $6.1752 trillion in debt, total. As for total US Debt? You're looking at around $18 trillion. So, China and Hong Kong hold a total of around 8% of all US Debt outstanding.
Animal Spirits
Chinese debt holdings aren't that large of a factor in the total US debt picture. You also have to note that China is likely to hold onto a significant portion of their US debt reserves to defend their currency in the event that there is a confidence issue with the yuan (since the US Dollar is, of course, the world's reserve currency).
So, the confidence lost or inspired by investors in Chinese markets is more important from a systemic picture than the financial links between our two countries. Invest accordingly - and note that confidence is (of course) quite an important factor.
And much harder to measure.
