Please read the following excerpt from an article and answer the following questions :

1. China's concern on US dollar value: "As President prepares to depart Thursday for his first Asia trip, Chinese premier is urging the U.S. to keep its deficit to an "appropriate size," a clear message to the leader of the world's largest debtor nation from its largest creditor.

China is the largest holder of U.S. government debt and has invested an estimated 70% of its more than $2 trillion stockpile of foreign-exchange reserves (the world's largest) in dollar assets, Reuters reports. Further dollar weakness, brought on by enormous U.S. deficit spending and near-zero interest rates, would erode the value of China's huge U.S. holdings. "Most importantly, we hope the United States will keep an appropriate size to its deficit so that there will be basic stability in the exchange rate, and that is conducive to stability and the recovery of the global economy," Chinese premier said over the weekend at a news conference.

In contrast, the best strategy for the U.S. may be an inflationary stance. We need stimulus spending to jump start our economy and reduce the real value of our record budget deficit of $1.42 trillion in the fiscal year that ended Sept. 30. An improved U.S. economy also would mean more Americans buying up Chinese-made goods"

Please comment on the following questions:

Why is China concerned about the value of US dollar? What can they do to decrease their exposure to fluctuations in the value of US dollar? Is decreasing exposure to US dollar an easy task for China? Why?

2. China-US interdependency: "The good news is Gamble believes China will continue to buy U.S. Treasuries, which should come as a relief to those worried about the $235 billion of securities being auctioned this week. "We don't have to ask them to buy our Treasuries, they simply don't have a choice," he says.

Because their economy is so dependent on exports, especially to the U.S., China needs us as much as we need them, Gamble explains. So expect China to keep funding our deficit -- by recirculating their surplus dollars into Treasuries -- and the U.S. to keep buying their exports, at least for the foreseeable future. The bad news is this same dynamic will prevent the Chinese from letting their currency, the renminbi, float vs. the dollar anytime soon. If China's currency were allowed to trade freely it would rise in value vs. the dollar which would make Chinese goods more expensive for Americans. "That would create less exports [for China] and make their unemployment situation worse," Gamble says. "The main thing policymakers in China are worried about is unemployment." Presumably, U.S. policymakers are worried about the same thing but don't expect this week's economic confab to provide any help on that front, or any other for that matter.

According to this article, what is the interdependency between China and US? Which country has a capital/current account deficit/surplus?

3. China's current account surplus: In the last decade China is known to have a huge current account surplus.However, recently this account deficit has been shrinking and it is expected to turn positive in the coming years. What do you think contributed to this change? What is it that Chinese consumers and investors do to contribute to this trend? Same thing is true for capital account deficit. The deficit has been shrinking in the last few years? Does this make sense? Why? What does this mean for the US treasuries? Will China keep buying our treasuries as much as before? What will happen to interest rates?