[joe_the_user]

It is indeed worth considering that China's semi-insolvent banking system might involve a larger cost than China's foreign reserves. But the question is whether the two are comparable.

It's not like China could go to the US and demand we ship banking system or our excess housing stock to them.

Also, it may be a significant to note that increased its foreign while it fell into trade deficit. If that keeps up, the nation will essentially spending money to stay cheap while it spends other money on the many dubious projects from high-speed rail to excess office buildings.

Foreign currency surpluses are different state debt. Japan has the world's second large dollar reserve - and the world's largest state deficit as a ratio of GDP.

http://www.nytimes.com/1997/03/01/world/japan-s-road-to-deep...

China's public private fusion system is a bit different from Japan of course. But claims for the strength of China are monumentally overstated as far as I can tell.