If China (or any other nation having a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.
Generally speaking, they will hold U.S. Treasury securities as a low-risk asset. The biggest effect of a broad scale dump of US Treasuries by China would be that China would actually export fewer goods to the United States. Overall, foreign countries each make up a relatively small proportion of U.S. debt-holders.
If it were to call in its debt, U.S. interest rates and prices could rise, slowing U.S. economic growth. On the other hand, if China were to call in its debt, the demand for the dollar could plummet.
Which countries hold the most US debt? Over the past 20 years, Japan and China have owned more US Treasuries than any other foreign nation. Between 2000 and 2022, Japan grew from owning $534 billion to just over $1 trillion, while China's ownership grew from $101 billion to $855 billion.
The United States, holding the highest national debt globally, has a total of $31.68 trillion, representing a YoY increase of $1.3 trillion or 4.28%, reaching $30.38 trillion. Therefore, China's national debt has surged almost three times that of the United States in the past 12 months.
At the end of 2021, of the 98 countries for whom data was available, Pakistan ($27.4 billion of external debt to China), Angola (22.0 billion), Ethiopia (7.4 billion), Kenya (7.4 billion) and Sri Lanka (7.2 billion) held the biggest debts to China.
The countries with the biggest debt burdens in relative terms were Djibouti and Angola, followed by the Maldives and Laos, which opened a debt-laden railway line to China last year. The President of the World Bank, David Malpass, has called the level of debt “unsustainable” that many countries once again hold.
Investors in Japan and China hold significant shares of U.S. public debt. Together, as of September 2022, they accounted for nearly $2 trillion, or about 8 percent of DHBP. While China's holdings of U.S. debt have declined over the past decade, Japan has slightly increased their purchases of U.S. Treasury securities.
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.
The US owes so much money to China because of the large trade and investment deficit the US currently has with China. This deficit is the result of a combination of factors, including rising wages and technology costs in the US, slow growth in the US economy, and US policies that favor the import of goods from China.
A U.S. debt default would lead to a slump in stock and bond markets, while eroding the U.S.' financial standing in the world, analysts say. The deadlines!
China's debt is nearly 44% of its GDP and its local governments owe nearly $5.14 trillion. With the economic slowdown and collapse of land sales revenue, provinces and local governments in China are facing an embarrassing situation.
(1) the cost to import goods will skyrocket because foreign companies will no longer want dollars; (2) our government will lose its ability to borrow at its current levels – forcing it to raise taxes or print money to cover its shortfalls; (3) inflation will be at levels we have never seen because of higher import- ...
A shift away from the dollar could lead to increased volatility in currency markets, which could impact the performance of global companies and financial institutions. In addition, a decline in demand for U.S. financial assets, including stocks, could lead to a decline in global stock markets.
Move Money In and Out of China – Rules and Restrictions
Generally, travelers can take the equivalent of $5,000 US of foreign currency out of the country. They can take local currency of 20,000 RMB in or out of China. This limit is applicable to local residents and foreigners.
The annual cost of debt will rise from $17.7bn in 2022-23 to a peak of $27.1bn in 2025-26, before reducing back down to $26bn in 2026-27, according to new estimates in the budget.
The federal government needs to borrow money to pay its bills when its ongoing spending activities and investments cannot be funded by federal revenues alone.
The value of U.S. Treasury securities held by residents of Russia amounted to 67 million U.S. dollars in January 2023, having declined by 89 percent from the previous month.
Japan is the second-largest foreign holder of U. S. debt after China, with holdings totaling nearly $1. 3 trillion in September 2020. Japan's large holdings of U. S. debt can be attributed to Japan's large trade surplus, low-interest rates, and limited investment opportunities in their own domestic markets.
In 2020, the African countries with the largest Chinese debt were Angola ($25 billion), Ethiopia ($13.5 billion), Zambia ($7.4 billion), the Republic of the Congo ($7.3 billion), and Sudan ($6.4 billion).
The total debt of China's LGFVs has swelled to a record 66 trillion yuan ($9.5 trillion), equivalent to half of the country's economy, from 57 trillion yuan last year, according to an International Monetary Fund (IMF) report last month.
An Associated Press analysis of a dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel.