Does the US government borrow money from China?
China is one of the United States's largest creditors, owning about $859.4 billion in
U.S. debt offers the safest haven for Chinese forex reserves, which effectively means that China offers loans to the U.S. so that the U.S. can keep buying the goods China produces.
Country/territory | US foreign-owned debt (January 2023) |
---|---|
Japan | $1,104,400,000,000 |
China | $859,400,000,000 |
United Kingdom | $668,300,000,000 |
Belgium | $331,100,000,000 |
[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).
A former US official explains the mystery. China is not dumping its stockpile of US bonds, Brad Setser, a former Treasury official, wrote. A large part of China's holdings is not accounted for in official US data, he said. While it has sold some Treasurys, Beijing has bought up US debt in the form of agency bonds.
The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.
If China “dumped” USA treasuries, they would take a serious monetary loss. The price of the treasuries would drop, effective raising the return for those who bought the bonds.
1) Switzerland
Switzerland is a country that, in practically all economic and social metrics, is an example to follow. With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt.
- Japan. Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP. ...
- United States. ...
- China. ...
- Russia.
- Japan. $1,098.2. 14.52%
- China. $769.6. 10.17%
- United Kingdom. $693. 9.16%
- Luxembourg. $345.4. 4.57%
- Cayman Islands. $323.8. 4.28%
Who is richer USA or China?
Country | Economy |
---|---|
United States | $25.347 trillion |
China | $19.91 trillion |
Japan | $5.396 trillion |
Germany | $4.55 trillion |
Is Bank of America Partly Owned by China? No, Bank of America is not partly owned by China. It is an American bank.
Debt as a share of GDP has risen to about the same level as in the United States, while in dollar terms China's total debt ($47.5 trillion) is still markedly below that of the United States (close to $70 trillion). As for non-financial corporate debt, China's 28 percent share is the largest in the world.
Consequences of Owing Debt to the Chinese
If China called in all of its U.S. holdings, the U.S. dollar would depreciate, whereas the yuan would appreciate, making Chinese goods more expensive.
Selling Treasurys is a fast way to whip up U.S. dollars, and China will sometimes use extra dollars to go out on the global market and buy up their own currency. That artificially pumps up its value. It's like planting someone at an auction to drive up your prices.
From a national perspective, China buys U.S. debt due to its complex financial system. The central bank must purchase U.S. Treasuries and other foreign assets to keep cash inflows from causing inflation. In the case of China, this phenomenon is unusual.
China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture.
China owes the United States $1.3 trillion, which is the most debt out of all the countries that are its debtors. Japan was the primary debt holder until 2008, but now comes in second place, with $1.2 trillion. Other countries with outstanding U.S. debt include Russia, India and South Korea.
It began rising at a fast rate in the 1980's and was accelerated through events like the Iraq Wars and the 2008 Great Recession. Most recently, the debt made another big jump thanks to the pandemic with the federal government spending significantly more than it took in to keep the country running.
China sells the most US assets in 4 years, dumping $21 billion of US stock and Treasury bonds. Chinese investors sold $21.2 billion in US equities and Treasuries, the US Treasury said Wednesday.
How in debt is China?
China's debt-to-GDP ratio climbed to a new record high in 2023 despite the slow pace of borrowing, reflecting the economy's weakening growth, a new report from a state-backed think tank shows.
The US government would have to find other buyers for its debt, which could lead to higher interest rates and lower long-term growth. The retreat of one of the largest buyers of U.S. Treasurys could bolster the Federal Reserve's efforts to push interest rates higher to cool the economy.
In the latest reports, Russia National Government Debt reached 285.4 USD bn in Dec 2023. The country's Nominal GDP reached 494.7 USD bn in Mar 2023.
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.
- Brunei. 3.2%
- Afghanistan. 7.8%
- Kuwait. 11.5%
- Democratic Republic of Congo. 15.2%
- Eswatini. 15.5%
- Palestine. 16.4%
- Russia. 17.8%