they buy that debt to maintain their currency peg - which is the basis for keeping their export driven economy going.
the chinese are smart, they need another 20 years of this to suck all new capital investment for tech and manufacturing into china, leaving the US with only services and government.
I agree with you and I say it may happen in 10 years. China demands that all manufacturers looking to locate within China train a Chinese workforce in all aspects of the manufacturing process, too.
BTW, I received an item from Israel recently and it had Made in China inscribed inside it. He he... I just shook my head when I saw it.