The bailout of Fannie Mae and Freddie Mac in the US tells us a lot about how the balance of power in the financial world is shifting.

The two firms either own or guarantee $5.4 trillion (Rs243.6 trillion) of US mortgages. China holds more than $376 billion of debt sold by the troubled firms. And Japan, too, is a major investor.

The Wall Street Journal says Asian investors, including the Chinese, “barraged” the US government to get an idea about what was being done to keep the two firms out of trouble. There are other reports that China had started selling some of the agency debt it held, which could have put Fannie Mae and Freddie Mac into more trouble.

The world economy has been run on a convenient but unstable arrangement. US consumers gorged on Chinese goods; China used the money to buy US debt, kept US interest rates low and thus encouraged consumers there to keep buying Chinese goods. All that has meant China now owns billions in dollar assets—more than enough for its phone calls to Washington to be taken very seriously.

That’s definitely not the way it used to be.