China's currency vis a vis the dollar is a VERY complicated issue. So complicated, in fact, that although I have a Master's Degree in Econ I cannot work through all the issues. The main issue is this, however: The effect will depend upon how much China's currency goes up. They will likely keep it relatively low because the Chinese economy depends so heavily on a weak Yuan. As to which party would suffer more, in the final analysis it would likely be us, although both parties would suffer. China's accumulation of dollars has massive affects on our economy, even keeping mortgage rates down! Folks don't know that, but it's true nonetheless. So, you are right to say they sort of have us over a barrel, but we have them over one, too. They need us. We need them. Both sides know that. That's why you are not likely to see any sort of major conflict, economic or otherwise. By sending our economy into a tailspin they would doing to same to theirs.

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