While Bernanke was testifying before Congress, Paulson went to China to reassure the Chinese that everything is under control:
Treasury Secretary Henry Paulson traveled to China this week to discuss, among other things, the impact of the credit crisis on the Chinese economy. He attempted to reassure Chinese officials that U.S. officials are working through the financial turmoil, although he cautioned that there might be more obstacles in the near future.
Some Chinese banks have swallowed a bit of those toxic pills. China’s good will–via its purchase of dollars– is financing our deficit. Keep your big creditors happy. Besides, we need the imports.
Our companies have invested a great deal in China. Wish them well. And hope for continued support from central banks and soverign wealth funds.