Here's how it works: The US government "borrows" money by "selling" government bonds. When you buy a government bond you are in essence loaning that money to the government. The bond will "ripen" over time, and if you wait the amount of time specified on the bond, you will earn a high interest rate on your investment (usually much higher than the current banking interest rate). If you cash in a government bond before it is "ripe" there is a steep penalty, and you can actually lose money.

The Bush admin has been pushing US government bonds in China and Japan. More specifically, they have been selling them to the GOVERNMENTS of those countries. This is bad for the US, because, in essance, those countries now own a part of the US, in much the same way your car is owned by a bank when you purchase it with a loan. If not handled well, this could lead to a very real international crisis. When China starts cashing in its bonds, if we don't have the money to pay them back, they could have a very real reason to "foreclose" on us. One can only guess at what collateral they will seize.

I hope that answers your question with at least some sort of understanding.