I harbored similar fears about China regarding their US debt holdings and our growing dependence on them until I went to China a couple of months ago. I came away being far less concerned with them as a threat. They are industrious, intelligent and hard working, but they also have very opressive government control and in general they are pretty disgruntled with their leadership but without any voice to change it. They still need to go through the transformation we went through 200+ years ago before they can establish a viable worldwide dominance. In these equations, we really should not discount the things that make our country great. At the same time, we do need to wake up and create a culture that is a little less arrogant and recognize that much of what we take for granted is a priveledge, not a right.
