Chinese Less Excited About Funding Our Spending Folly

The NY Times has the details:

HONG KONG — Reversing its role as the world’s fastest-growing buyer of United States Treasuries and other foreign bonds, the Chinese government actually sold bonds heavily in January and February before resuming purchases in March, according to data released during the weekend by China’s central bank.

Cutting Back China’s foreign reserves grew in the first quarter of this year at the slowest pace in nearly eight years, edging up $7.7 billion, compared with a record increase of $153.9 billion in the same quarter last year.

China has lent vast sums to the United States — roughly two-thirds of the central bank’s $1.95 trillion in foreign reserves are believed to be in American securities. But the Chinese government now finances a dwindling percentage of new American mortgages and government borrowing.

In the last two months, Premier Wen Jiabao and other Chinese officials have expressed growing nervousness about their country’s huge exposure to America’s financial well-being.

As long as China was willing to fund our excesses without limit our government felt free to keep spending. A tightening of credit by China may be the only way to rein in Obama and the Democrats. Their expensive new programs may have to be delayed or cancelled if they can't find the funding.

That wouldn't be all bad.