Comment Re: China (Score 3, Insightful) 70
China accumulates USD by selling the US stuff. They trade that USD for US bonds so they can earn interest. The bonds aren't redeemable before maturity. At any time, the US govt can create $14T to repay the bonds in cash. The Chinese bondholders don't really want to redeem their bonds, since then they're back to holding cash, which isn't paying interest.
US stuff buyers also ended up with $14T worth of stuff, which matches exactly the $14T that Chinese stuff sellers exchanged for the bonds.
Around it goes. That's a trade deficit.