Clinton says China holdings threaten U.S. security

By Jeff Mason

INDIANAPOLIS, Indiana (Reuters) - The Bush administration has jeopardized national security and the ability to intervene in world crises because of the huge U.S. debt held partly by China, Democratic presidential hopeful Hillary Clinton said on Saturday.

The New York senator, who argues she is better prepared to deal with economic and foreign policy problems than rival Illinois Sen. Barack Obama, told a rally in Indiana that the United States' $9 trillion (4.5 trillion pounds) in gross national debt puts it at the mercy of other nations.

She said President George W. Bush's policies contributed to rising U.S. debt and also have hamstrung Washington's ability to lead.

"That is what George Bush's policies mean in real world terms -- that we have put our nation's security and our leadership of the world at risk because of this indebtedness," Clinton said.

Clinton made China the focus of her criticism, which she has repeated throughout Indiana, a state that has suffered from manufacturing job losses that many blame on unfair trade practices and companies outsourcing jobs to China.

Clinton hopes to win Indiana's Democratic nominating contest on May 6 in a bid to close the gap with Obama who leads in amassing delegates who determine the party's nominee.

In her campaign remarks, she lamented China's hold over the U.S. economy.

"We are so dependent upon decisions made in other countries' capitals," Clinton said, singling out China's potential power over U.S. foreign policy decisions because of its financial leverage.