Remember when China was going to stop buying American bonds and the world was going to end? This hand-wringing was always wrong-headed; perhaps now it will finally cease.

In May, net official Chinese holdings of U.S. Treasuries jumped $38 billion. This is the flip side of the return of large-scale capital inflows into the PRC, after these were interrupted by the financial crisis.

Net official Chinese holdings of U.S. Treasuries do not constitute the last word. They miss some less direct Chinese purchases of Treasuries and all Chinese purchases of other American bonds, such as those sold by U.S. government agencies. Still, they are the most prominent signal of Chinese behavior.

In the past 12 months, the PRC has increased its official holdings of Treasuries by more than 50%. When a great deal of foreign money is flowing into China, it has no choice but to buy American bonds – there’s no other place to put the $400 billion a year the PRC has been racking up. Cheap talk aside, China is actually the biggest supporter of the dollar. It has no choice.

The biggest underminer of the dollar is our own government. Congress and the President are pushing federal borrowing to levels previously unimaginable. In fact, the larger Chinese purchases are just a natural outgrowth of the U.S. government flooding the market with debt. We don’t have to worry that much about what Beijing will or won’t do in the future with regard to bonds– we should worry about what Washington is doing right now.