So We're Square Right?

So in exchange for toxic dog food, we gave China... toxic securities.

Okay, they probably got screwed more- all that hard-earned trade surplus in exchange for a lot worthless junk:

China consequently entered the “Lehman” crisis with a somewhat riskier portfolio than I thought. The bulk of China’s portfolio, to be sure, was in Treasuries, Agencies and comparable European bonds. But it now looks like well over 10% of SAFE’s portfolio was invested in “risk” assets of various kinds — equities and corporate bonds.

That likely explains why China reversed course and fled to safety this fall. China got burned....

Yeesh.