Oil and U.S. Treasury Bonds

[phantom power]

(The following is a snip from an interview regarding oil prices. I was interested in this angle, which I hadn't ever heard before)

SM: What do you think the surging price of oil could do to China's economy, which has been greased by relatively cheap fuels?

PV: It slows the Chinese growth. The Chinese are running a huge trade surplus with us. Clearly, the dollars they receive from selling us the goods you buy at Wal-Mart (WMT), they use to buy oil. The Chinese could certainly cover their oil import needs by selling some of the U.S. bonds they've bought. The Asian countries have been huge buyers of U.S. Treasurys. That would be a major problem. In some ways, that's a perfect economic storm.
http://www.smartmoney.com/theproshop/index.cfm?story=20040818