1.)The way the us economy is going now with 90 million people out of the workforce it is clear that they won't be paying down that debt any time soon rather it will be increasing.
2.)The way the market works is speculation and unfortunately not with the facts you stated so if china demanded higher interest rates all of the other bond holders would freak out.
3.) Go into any store in the u.s and you will find many things made in china especially consumer electronics. It is true that companies are leaving china to go to other south east asian countries however as of
now they don't have the same manufacturing capabilities of the chinese let alone the technology.
1.) Can you tell me where do you get the 90 million out of work figure? Last time I check the unemployment rate in the US is 6.7% at a federal level, which translate to 23 millions
Even at highest state level, it's only 9%, let's say the federal level is 10%, that only still mean 33 millions
90 millions would mean a 27% unemployment rate, if they really do get that, there must have been riot already
2. Why if Chinese want the money back and that would be panic?
As I said, US national debt is not a loan, it's not like US government ask China Central bank for a loan, and Chinese can ask for the interest payment.
Bond, unlike loan, they either carry a no interest issue (non market bond) or interest on mature issue (market bond) you cannot ask for payment or interest halfway
For China to lose all their US bond, they have to first wait for all the bond to be mature and put them on the market, either allowing the US government to buy them back, or have a third country to take them
Now if indeed China pushed all 1.6 trillions dollars bonds (~9%) on the market, it would only mean either US will use their surplus to buy them back or more than likely pay off some and borrow the remaining to buy back the US bond China is holding.
Now, with a standard to good standing and a 17 trillions economy, do you think US would have any problem borrowing 1.6 trillions to pay it off?
3.) read my response to another poster. How many dependence on Chinese goods depend on what kind of store you are going into. If you are referring to discount store or 99c store, of course that would be full of make in China product, actually not that much anymore.
But if you are going to a general store, it would be more of a equal footing for each player