Passing the Buck: China, Dollars and Debt

BY Elizabeth Shell  November 12, 2010 at 5:26 PM EST

A bit more about the interplay between China’s holding of currency and U.S. debt.

Making Sense

First, a simple graphical explainer as to how the Chinese government gets so many dollars in the first place, using Ford Motor Company and China Steel as an example:


And more from MIT professor Yasheng Huang, who was interviewed by Paul Solman in Thursday’s broadcast. Here, the two talk about whether or not it’s fair to blame China for holding so many dollars, and some macroeconomic imbalances between the countries.

Though the G20 wrapped up this week, exchange rates, debt instruments and international trade are issues that remain at the center of discussions on the global economy.