From The Boston Globe (link):
QUESTION: HOW do you apply leverage against an emerging geopolitical giant that also happens to be among your biggest creditors? Answer: not very well.
When President Bush took office, prodded by neoconservative advisers, he viewed China as a potential rival and menace. Today, bogged down in Iraq and hobbled by American financial dependence on Beijing, Bush must look to the Chinese like a modern, self-inflicted Gulliver.
Washington has several issues, as the children say, with the Chinese. For starters, Beijing should play by the usual financial rules and not keep their currency artificially cheap to stimulate exports, which worsens our $200 billion bilateral trade imbalance.