Blackstone Group will sell 10% of itself [WSJ subscription required] to China's new investment arm prior to Blackstone's initial public offering (IPO). If there was ever an example of how capital is reducing the importance of national boundaries, this is it.

This Blackstone investment -- for a non-controlling stake -- is clearly a bargaining chip in the economically tense relationship between China and the U.S. We need China, since it's financing a big chunk of the $8.8 trillion U.S. federal debt -- it owns $350 billion worth of U.S. Treasury securities.

But China also accounts for a share of the politically sensitive U.S. trade deficit. And due to what Treasury Secretary Hank Paulson considers China's artificially low currency, this trade deficit is not going away. Somehow China, which is coming to the U.S. for trade talks, thinks that having its State Investment Company buy $3 billion worth of Blackstone Group at 95.5% of the IPO price will mollify its critics.

One thing for sure -- China's stake will help Blackstone avoid the problems that Carlyle Group encountered in its efforts to buy companies in China. I guess China would be better off if Blackstone owned the U.S. government. Then again, given that Steve Schwarzman raised $1.2 million last month for Republicans during a New York fund-raiser at his 34 room apartment featuring his Yale dorm mate -- George W. Bush -- maybe China's investment in Blackstone is Bush's payback for Schwarzman's fund-raising.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.