Does China owe us billions of dollars, or is it the other way around?
That does not matter. So what if we owe China a lot of money? Does China want to risk losing its biggest market? Can they afford to flood the market with US dollars? Can they afford to call in the debt? We can always print more money, they have a vested interest in not calling in debt to maintain their own exports and currency devaluation. Owing China money is not an indicator of power.
Sure, economic power trumps military might in today's world.
I am not entirely convinced of that, but by a measure of solely economic power the United States still beats China 2 to 1.
Unfortunately, the first part of that statement is correct.
Unfortunate or not, we need to accept it for what it is.