After last week's article by Ambrose Evans-Pritchard, China threatens to trigger US dollar crash (The Daily Telegraph, 08 August 2007) it becomes evident that (a) Evans-Pritchard is a right-wing crank, and (b) it is not in China's strategic interest to destabilize the U.S. economy. Nevertheless and obviously, a creditor does have a great interest in and ability to influence it's debtor's behaviour. I would also add that many alarmist stories such as Evans-Pritchard's have a tendency to focus on only one aspect of far more complicated situations; for example, in his article Evans-Pritchard never mentions that the U.S. is also China's largest trading partner, that China's political and economic stability depends upon maintaining and increasing its trade with the U.S., and that China obviously wants to preserve the value of its dollar denominated assets. The following articles and associated comments delve a little further into this subject.

Andrew Leonard, Will China drop the bomb on the U.S. dollar?, How the World Works, Salon.com, 08 August 2007.

Richard McGregor, China affirms dollar’s reserve status, Financial Times, 12 August 2007.

Jeremy Goldkorn, China's nuclear option — dumping dollars, Danwei.org, 13 August 2007.

Not about Evans-Pritchard's irresponsible aritlce, but too good not to read:
The mandarins of money: Central banks in the rich world no longer determine global monetary conditions, The Economist, 09 August 2007.


Last but not least, I look forward to reading this book:

Barry Naughton. The Chinese Economy: Transitions and Growth. The MIT Press, January 2007.