I believe that you have missed the essential point about
the reason why foreign countries financed our trade deficits – it bought them a
ticket to the first world. You might want to comment on this article:

http://www.scragged.com/articles/we-owe-the-chinese-a-trillion—they-have-a-problem.aspx

Now that the Chinese have tuned up their manufacturing
capabilities adn have enough US treasuries to buy resources, they are poised to
upgrade their infrastructure during the down turn. Unlike the US, there are
ample places where Chinese infrastructure investments will show positive
return.