categoryMenu_new
 
  Home
  EXTRAORDINARY AH Teaching from Spiritual Hierarchy
  AbundantHope
  NEW READERS! Read Here First
  Supporting AH
  Leadership of AbundantHope
  Announcements
  Regional AH Sites
  Other Sites with AH material
  Contact Us
  Becoming A Messiah
  OUR PUBLIC FORUM IS OPEN TOO ALL
  Mission Ideas
  System Busting
  Cleric Letter/English
  Translations of Cleric Letter
  AH Member Writings
  Candace
  Ron
  Rosie
  Jess
  Brian's Poetry
  James
  Giuseppe
  Esteban
  Telepathic Messages
  Candace
  Jess Anthony
  Vince
  Leonette
  John
  Adam
  Bela
  Joyce
  Hazel
  Kibo
  Peter
  Rosie
  Johan
  Lucia
  Lucia G
  Rubens
  Shellee-Kim
  Ben
  Dorothea
  Solon
  Others
  Targeted Messages
  Hano
  Light Flower
  Changing The Face Of Religion
  - Phoenix Journals - PDF in German
  Candace on Religion
  Other Spiritual Pieces
  Spiritual Nuggets by the Masters
  Phoenix Journals
  Phoenix Journals - PDF
  Telepathic Messages PDF books
  Selections from the Urantia Book
  Illustrations For The Urantia Book
  CMGSN Pieces
  THE WAVE
  Environment/Science
  David Crayford and the ITC
  Health and Nutrition
  Podcasts, Radio Shows, Video by AH
 
  Political Information
  True US History
  Human/Animal Rights
  The Miracle That Is Me
  Education
  Resources
  911 Material
  Books - eBooks
  government email/phone #'s
  Self Reliance
  Video
  Websites
  Alternative News Sources
  Art and Music
  Foreign Sites
  Health and Healing
  Human/Animal Rights
  Scientific
  Spiritual
  Vegan Recipes
  Translated Material
  Dutch
  Gekanaliseerde berichten Jess
  Gekanaliseerde berichten Candace
  Gekanaliseerde berichten Anderen
  Artikelen/berichten
  French
  Canal Jess
  Par Candace
  Other Channels
  Articles
  German
  Telepathische Nachrichten (Candace)
  Telepathische Nachrichten (Jess)
  Telepathische Nachrichten (div.)
  AH Mitgliederbeiträge (Candace)
  AH Mitgliederbeiträge (Jess)
  Spirituelle Schätze
  Italian
  Translations - Candace
  Translations - Jess
  Translations - Others
  Portuguese
  by Candace
  By Jess
  By Others
  Spanish
  Anfitriones Divinos
  Bitácoras Fénix
  Creadores-de-Alas (WingMakers/Lyricus)
  Escritos de Candace
  Escritos de Otros
  Monjoronsón
  Telemensajes de Candace
  Telemensajes de Jess Anthony
  Telemensajes de Otros
  Chinese
  By Candace
  By Jess
  By Others
  Korean Translations
  Hungarian Translations
  Swedish Translations

Search
[an error occurred while processing this directive]
Political Information Last Updated: Aug 12, 2019 - 4:23:01 PM


US Debt to China: How Much, Why does China buy it, and What Happens if China sells ?
By Kimberly Amadeo
Aug 12, 2019 - 4:19:05 PM

Email this article
 Printer friendly page Share/Bookmark

https://www.sott.net/article/418375-US-debt-to-China-How-much-why-does-China-buy-it-and-what-happens-if-China-sells

china dollar debt

The U.S. debt to China is $1.11 trillion as of May 2019. That's 27% of the $4.1 trillion in Treasury bills, notes, and bonds held by foreign countries. The rest of the $22 trillion national debt is owned by either the American people or by the U.S. government itself. 

China has the greatest amount of U.S. debt held by a foreign country. Japan comes second at $1.10 trillion. It's followed the United Kingdom at $332 billion, Brazil at $306 and Ireland at $271 billion. 


Comment: Yes, Ireland; the country that is itself $250 BILLION 'in debt' to banksters! What a farcical racket... 


The map below shows a breakdown of the top five countries owning U.S. debt. Combined, they hold 75% of U.S. debt held by foreign countries. 
us debt treasuries
China has reduced its holdings of U.S. debt since November 2013, when it held $1.3 trillion. It wants to allow its currency, the yuan, to rise. To do that, China had to loosen its peg to the dollar. That made the yuan more attractive to forex traders in global markets. China's economy is also slowing down due to President Donald Trump's trade war. As China's exports decline, it's less able to invest in U.S. Treasurys. 

Long-term, China wants the yuan to replace the U.S. dollar as the world's global currency. China is also responding to accusations of manipulation. Most countries want their currency values to fall so they can win the global currency wars. Countries with lower currency values export more since their products cost less when sold in foreign countries. 

Before February 2014, China had been strengthening the yuan to dollar conversion in response to U.S. pressure. But it reversed course when the dollar rose 25% in 2014 and 2015, creating an asset bubble. Since the yuan's exchange rate was fixed to the dollar, the increase dragged the yuan's value up with it. China had to manually lower the yuan's value to remain competitive with other emerging markets that had free-floating currencies. 

In 2018, the dollar began weakening again. When that happened, China could allow the yuan's peg to the dollar rise without hurting its competitiveness with its neighbors. 

China has held more than $1 trillion in U.S. debt every year since 2010. That's when the U.S. Department of the Treasury changed how it measures the debt. Before July 2010, Treasury reports showed that China held $843 billion in debt. This makes it difficult to make long-term comparisons. 

How China Became One of America's Biggest Bankers 

China is more than happy to own almost a fifth of the U.S. debt owned by foreigners. Owning U.S. Treasury notes helps China's economy grow. It keeps the yuan weak relative to the dollar. As a result, Chinese exports are less expensive than U.S. products. China's highest priority is creating enough jobs for its 1.4 billion people. 

The United States allowed China to become one of its biggest bankers because Americans enjoy low consumer prices. Selling debt to China pays for federal spending that spurs U.S. economic growth. It also keeps U.S. interest rates low. But China's ownership of the U.S. debt is shifting the economic balance of power in its favor. 

Why China Owns So Much U.S. Debt 

China makes sure the yuan is always low relative to the U.S. dollar. Why? Part of its economic strategy is to keep its export prices competitive. It does this by holding the yuan at a fixed rate compared to a "currency basket" of which the majority is the dollar. When the dollar falls in value, the Chinese government uses dollars it has on hand to buy Treasuries. It receives these dollars from Chinese companies that receive them as payments for their exports. China's Treasury purchases increase demand for the dollar and thus its value. 


Comment: Trump can rail all he likes about China's "manipulation," but it's only conducting the monetary policy that so few countries on Earth still can because it is not beholden to The Central Banking System, aka the banksters. 


China's position as America's largest banker gives it some political leverage. Now and then, China threatens to sell part of its debt holdings. It knows that if it does, U.S. interest rates would rise, slowing U.S economic growth. China often calls for a new global currency to replace the dollar, which is used in most international transactions. China does this whenever the United States allows the value of the dollar to drop. That makes the debt China holds less valuable. 

What Happens If China Called in Its Debt Holdings 

China would not call in its debt all at once. If it did, the demand for the dollar would plummet. This dollar collapse would disrupt international markets even more than the 2008 financial crisis. China's economy would suffer along with everyone else's.

It's more likely that China would slowly begin selling off its Treasury holdings. Even when it just warns that it plans to do so, dollar demand starts to drop. That hurts China's competitiveness. As it raises its export prices, U.S. consumers would buy American products instead. China could only start this process if it further expands its exports to other Asian countries and increases domestic demand. 


Comment: And the way it's going about this is via its 'New Silk Road' projects in Asia and Africa... 


China's Debt-Holder Strategy Is Working 

China's low-cost competitive strategy worked. Its economy grew 10% annually for the three decades before the recession. As of 2018, it's growing at almost 7%, a more sustainable rate. China has become the largest economy in the world, outpacing the United States and the European Union. China also became the world's biggest exporter in 2010. China needs this growth to raise its low standard of living. Despite its threats, China will continue to be one of the world's largest holders of U.S. debt.
Comment: ...until one day it isn't.




All writings by members of AbundantHope are copyrighted by
©2005-2019 AbundantHope - All rights reserved

Detailed explanation of AbundantHope's Copyrights are found here


Top of Page

Political Information
Latest Headlines
When ‘Homeland’ Becomes a Politically Fraught Word
End Game and Afghanistan Bombing: Blame the Author, Not the Messenger
Anti-Christian Persecution In Finland
Policing For Profit: How Civil Asset Forfeiture Has Perverted American Law Enforcement
World’s Longest Solar Road Turns Out to be a Disaster
Trump Admin Launches ‘unprecedented’ Pro-life Effort at UN to Fight Pro-abortion EU
Victoria's Dirty Little Secret Is The Epstein-Wexner Plot Against American Manhood
Was FBI-staged Russian ‘honeytrap’ the Only ‘deep state’ anti-Trump Plot ?
On the Events in Hong Kong: the Show Must Go On?
The Push to Kill Cash – Australia’s Proposed Ban Shows It’s Not Conspiracy Theory
Bombshell New Video Exposes Horrifying Crime of Vaccine Mandates…
Epstein Murder Money Trail Leads To Billionaire David Koch—Who Then Quickly Dies
NASA Takes Pictures of Glaciers in the Heat of Summer, then Claims, “They’re MELTING!”
NEON Notables – Fifth “Let the Unsealing Begin!” Edition – for August 23, 2019 – #QAnon #GreatAwakening #NEONREVOLT
Brexit Has Opened Old Wounds in Ireland — and anti-British Sentiment is Back
George Osborne as Head of the IMF? It's as Insulting as ‘Tony Blair, Peace Envoy’
CIA-Funded Secret Militiamen ‘An Obstacle to Peace in Afghanistan’
UN Commemorates Religious Persecution – OpEd
“Huge Win for Wildlife”: Peru Vows to End Deforestation Driven by Palm Oil
The Liberal Order Began by Embracing Russia, Now They Want Revenge