I think they've known for a long time. John McFadden, who has lived in China, had some interesting comments on this in the Dec. 17 DrumBeat. He says China is signalling that it's willing to take a hit, but not a disproportionate hit. If backed into a corner, they could dump their dollar reserves, but they know this is an act of economic war, and don't want to do it. (But they are more likely to do this than launch an actual war.) Basically, what they want is for everyone to back away from the dollar slowly. Share the pain, if you will. They will not allow the U.S. to leave them holding the bag.