China is not as homogeneous as you are led to believe. I hate to use anything from Wikipedia, but have a look at this ethnic/linguistic map.     http://upload.wikimedia.org/wikipedi...guistic_83.jpg  Counting the majority people as simply Han Chinese is misleading. The peoples of the North that speak Mandarin, and those of the South that speak Cantonese are of somewhat different ethnicity that are apparent on site. These two languages share a common writing system, but are so different phonetically that they are practically unintelligible to their respective speakers of each. Saying that they are the same language is like saying that French, Spanish, Romanian and Italian are the same language. They share the same roots and writing system, but they are distinct languages in their own right. From this map, you can see (olive colored areas) that the Han ethnic group really only traditionally occupies about half the country. If you further divide these roughly into North and South regions within the olive-colored area, you have a further linguistic differences causing further divide. When times are good, they case aside their differences and work together, but when they are bad they grow distrustful of one another.    China has a history of going to war with itself every once in a while, and the rising tide of exports has raised the standard of living so high that losing it now will most definitely case civil unrest. Many posters here have correctly noted that China holds many US dollars and debt instruments, but this matters little in my book. The rest of the world doesn't seem to want dollars now, and Obama seems intent on debasing the currency with his stimulus plans. Its not as if Chinese can use these dollars to pay their own people, and given the protectionist stances that most countries are taking these days, I doubt that China will be allowed to purchase any worthwhile US assets using the dollars that they've accumulated.