China may be the world's biggest shopper these days, but it has largely skipped over most of the bargains in the US.
|One in eight Chinese exports to the US can be found at retail giant Wal-Mart [GETTY]
The Chinese pour only $1bn a year into US businesses, which accounts for barely more than one per cent of the EU's annual stake in the US.
But what it lacks as an investor, China more than makes up for as the US government's number one lender.
And like the relationship between many a banker and borrower these days, it is an uneasy one.
Hillary Clinton, the US secretary of state, tried to put a gloss on that relationship during her first official visit to Beijing when she expressed appreciation for China's "well-grounded confidence" in the soundness of US treasury bonds.
Her gratitude was being voiced at just about the time that China surpassed Japan as the world's biggest holder of US government debt, to the tune of $800 billion.
But when Timothy Geithner, US treasury secretary, later attempted the same line on an audience at Beijing University, he was met with laughter.
Such a reaction comes as no surprise to Robert Scott, a US trade economist.
"The US is spending 4 to 6 per cent more of GDP than we've been earning from exports," said Scott.
"And we have to pay for that by borrowing."
Fearing dollar devaluation
As the Obama administration tries to spend its way out of recession, the treasury has been forced to come hat in hand to China for more loans.
In the process, the US has increased its debt to Beijing by 50 per cent in just the past year.
Chinese officials have made clear they are nervous about the deepening US debt, despite Washington's assurances that it will pull in its belt once the economy recovers.
If, as feared, a rush of inflation accompanies economic revival, China's dollar holdings will be worth much less.
But China isn't likely to be selling off its huge US debt portfolio anytime soon.
"They have to hold on to those dollars," said Scott. "Otherwise the dollar is going to fall. You would see an excess of dollars on the world market."
To get a picture of how China amasses the huge pile of dollars it lends back, just walk into any large US store, crammed with goods made in China.
For example, one in every eight Chinese exports to the US can be found at Wal-Mart, the world's largest retail chain.
|The US is likely to continue to buy Chinese products despite the financial crisis [AFP]
And though US shoppers have been forced to curb their consuming habits, they still flock to Wal-Mart for its low prices.
At a Wal-Mart store in Maryland, a few kilometres outside Washington, a random survey of middle-class shoppers revealed widespread awareness that their dollars are stuffing China's coffers.
Yet none said they would stop buying Chinese goods, as long as the price is right.
"Prices are a big consideration for my family," said Melissa Regan, "so often I need to find the best bargain for us."
Congress has stipulated that the $787 billion economic stimulus programme aimed at saving or creating millions of jobs in the domestic economy be exclusively spent on US-made goods.
It is a requirement that China has called protectionist "poison" to global economic recovery.
But there is a potentially gaping loophole to that "Buy America" provision; it no longer applies if it violates existing international trade agreements.
As a result, as part of its economic recovery programe, the US is likely to continue buying Chinese steel, iron and other products.
That is grim news for US labour unions and manufacturers who say that China is an unfair competitor.
According to a study by the Economic Policy Institute, a non-profit, non-partisan Washington-based think tank, at least 2.3 million US jobs have been lost or displaced since China joined the World Trade Organisation (WTO) in 2001.
Meanwhile, China has struck back by including a "buy China" clause in its own domestic stimulus plan.
It has also taken measures at the WTO to sue the Obama administration for cutting in half China's annual exports of 46 million auto tyres to the US.
The silver lining in this tit-for-tat, however, is that while the US economy has shrunk - and China's has just kept on growing - the dollar has held its value relative to the Chinese yuan.
That makes Chinese exports to the US still affordable, even if, as Washington complains, it is happening only because Beijing keeps its own currency artificially weak.
Most analysts agree that despite the traded criticism of each other's trade policies, China and the US will likely maintain their respective roles as creditor and debtor for some time to come.
Or as some observers have described their relationship – the world's biggest joint venture.