How much china owns america

China's position as the largest foreign holder of U. It is responsible for lower interest rates and cheap consumer goods. If it called in its debt, U. On the other hand, if China called in its debt, the demand for the dollar could plummet. This dollar collapse could disrupt international markets even more than the financial crisis. China's economy would suffer along with everyone else's. If China ever did call in its debt, it slowly would begin selling off its Treasury holdings.

Even at a slow pace, dollar demand would drop. At some price point, U. China could start this process only after it further expanded its exports to other Asian countries and increased domestic demand.

China's low-cost competitive strategy seems to be working. In , it grew at 6. China has become one of the largest economies in the world. China also became the world's biggest exporter in China needs this growth to raise its low standard of living.

For these reasons, we'll likely see China remain one of the world's largest holders of U. Hilarey is an associate editorial director for The Balance and has held full-time and freelance roles at a variety of financial media companies including realtor. Department of the Treasury. The World Bank. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content.

Create a personalised content profile. Measure ad performance. Select basic ads. Treasurys to the Chinese government. Japan and China own about 5.

There are two main economic reasons Chinese lenders bought up so many U. The first and most important is that China wants its own currency, the yuan, pegged to the dollar. A dollar-pegged yuan helps keep down the cost of Chinese exports, which the Chinese government believes makes it stronger in international markets. This also reduces the purchasing power of Chinese earners. Dollar-pegging adds stability to the yuan, since the dollar is still seen as one of the safest currencies in the world.

This is the second reason the Chinese want Treasurys; they are essentially redeemable in dollars. China drew some headlines in and for buying up a lot of gold to store in its bank vaults, but the real safety net for the yuan is the worldwide belief in the dollar.

It's politically popular to say that the Chinese "own the United States" because they are such a huge creditor. The reality is very different than the rhetoric. If the Chinese suddenly decided to call in all of the federal government's obligations which isn't possible, given the maturities of debt securities , it is very likely that others would step in to service the market.

This includes the Federal Reserve, which already owns nearly three times as much debt as China. Second, the Chinese rely on American markets to buy Chinese-produced goods.

Artificially suppressing the yuan has made it difficult for a growing Chinese middle class , so exports are needed to keep businesses running. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasuries.

This helps inflate the value of the dollar. In return, American consumers get cheap Chinese products and incoming investment capital. The average American is made better off by foreigners providing cheap services and only demanding pieces of paper in return. Department of the Treasury.

Accessed Mar. Bureau of the Fiscal Service. World Bank. Congressional Research Service. Office of the Historian. Federal Reserve Bank of St. Government Publishing Office.

Jump to content [s] Jump to comments [c] Jump to site navigation [0] Jump to search [4] Terms and conditions [8]. News Datablog. US debt: how big is it and who owns it? Who owns US debt around the world - and how big is it? US debt: who owns it and how big is it? Photograph: Corbis.

It's an issue that's sure to come up in the first presidential debate this Wednesday. Powered by Tableau. Click heading to sort table. Download this data Country.