I kid you not. This is the headline of an article in the New York Times web edition this morning. Add that with a similar story on China in this week’s edition of the Economist, and you start to get a sense of the amount of power and clout China now wields on the geopolitical stage.

Of course, much of this is political and economic posturing ahead of the G20 meeting. Yet it’s undeniable that China is beginning to flex its financial muscles. “China has the world’s largest foreign exchange reserves, valued at nearly $2 trillion, with more than half of those holdings estimated to be made up of United States Treasuries and other dollar-denominated bonds”.

“China’s bold idea, released more than a week before world leaders are to gather in London for an economic summit meeting, also indicates that Beijing is worried that its huge dollar- denominated foreign reserves could lose significant values in coming years”.

“Such a proposal has been suggested before by developing countries. But the United States has always been wary that this could be inflationary and affect the role of the dollar”.

All that said, China is planning on 8% growth in their economy for 2009. The IMF predicts 6% growth. With the United States predicting zero and perhaps slightly negative growth, as well as the rest of the world predicting little economic growth if any, China is the country to watch.

In a world economy that is deep in debt, cash is king. China has cash and plenty of it. Since December 31, 2008, China’s stock market has increased by an average of 25% according to the Economist.