The Chinese won’t dump their treasuries and they won’t float their currency. There economy only exists because of our purchasing power and buying their goods.
Let’s put this in a little perspective folks. The US GDP is $13.1 TRILLION dollars. It increased $2.2 trillion from 2003 to 2006. The entire Chinese GDP is $2.07 trillion. Our GDP grew in 3 years by more than the ENTIRE Chinese GDP.
Assuming that the Chinese GDP grew at 8% forever and the US GDP grew at 3% forever, it would take China 40 years to equal our GDP.
Yes there are problems but at the end of the day we are still a huge economy with a lot of life left in it.
