Should the PBOC stop interfering, most economists agree that the renminbi would self-correct and appreciate in value, thus making Chinese exports more expensive. U.S. Debt to China: How Much Is It, and Why? All rights reserved. Even at a slow pace, dollar demand would drop. The answer to that question seems to be a constant source of controversy among Americas political leaders and media commentators. "In 2017, the United States produced zero rare earth minerals. Discover the current debt ceiling and its economic impact. The Chinese Investor owns about 14% of Snapchat's shares. The total has grown by an average 2.3 million acres per year since 2015, according to USDA data. Japanese-owned debt doesn't receive nearly as much negative attention as Chinese-owned debt, ostensibly because Japan is seen as a friendlier nation and the Japanese economy hasn't grown as fast as China's year after year. In return, American consumers get cheap Chinese products and incoming investment capital. Market data provided by Factset. "Report on Foreign Portfolio Holdings of U.S. Bill Gates owns almost as much U.S. agricultural land as China at 248,000 acres, according to The Land Report. And its findings may be surprising to some. The reality is very different than the rhetoric. Definition and Analysis, What Is National Debt and Where It Fits Within the Economy, Alexander Hamilton and the National Economy, The History of US Government Financial Bailouts, What Was the Open Door Policy in China? Among all of those foreign creditors to which America owes money, China led the way at $1.17 trillion, followed by Japan, at $1.07 trillion as of January 2018. ", International Monetary Fund. Business Solutions including all features. The bill, which is yet to move through the House, would necessitate that "an issuer must make this certification if the Public Company Accounting Oversight Board is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the board. China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. "How Much U.S. Debt Does China Really Own?" Washington, DC 20036. Secondly, China needs American markets to buy their exported goods. The vast majority of this land is farmland, but the Chinese government and investors also own other kinds of real estate. While many politicians like to angrily proclaim that China owns the United States because it owns so much of the U.S. debt, economists say that claim is far more rhetoric than fact. U.S. companies with Chinese shareholders more than doubled their acreage that year, accounting for 102,000 acres of the growth. As a Premium user you get access to the detailed source references and background information about this statistic. Financing for these huge annual IOUs comes from the Department of the Treasury and the Federal Reserve. The quick answer is that as of January 2018, the Chinese owned $1.17 trillion of U.S. debt or about 19% of the total $6.26 trillion in Treasury bills, notes, and bonds held by foreign countries. Chinese firms have bought AMC Entertainment, Legendary Entertainment, and other media companies. China has the second-greatest amount of U.S. debt held by a foreign country. And while the U.S. grants China permission to buy its companies, China does not allow U.S. companies to operate the same way on their soil. The first and most important is that China wants its currency, the yuan, pegged to the dollar. Former Vice President Mike Pence speaks during an event. For its part, China owned 191,000 acres worth $1.9 billion as of 2019. How do I know if my stimulus was deposited? The United States owes China approximately $980.8 billion as of May 2022. A repurchase agreement is a form of short-term borrowing for dealers in government securities. Over 40 percent of the additional 3.4 million acres acquired by foreign investors in 2019 was located in Texas, Oklahoma, and Colorado. In 2017, the United States imported $4.6 billion in agricultural goods from China, which is also responsible for much of the global supply of soy and pea proteins that are found in nutritional supplements and synthetic meats. WH Groups shareholders include many large U.S.-based financial institutions.". It is not only foreign companies who take advantage of this regulatory loophole, howevercompanies from other states and cities around the United States are also buying up land in Arizona to take advantage of the states loose water regulations, putting Arizonas long-term water resources at risk. Now China owns the airspace and Australian citizens can't land in their own country without approval from the Chinese government. Breaking Down the US Debt and Who Owns It. This helps China hold down the cost of its exported goods, which tends to make China, like any nation, a stronger performer in international trade. It could be bigger," he surmised. How many times does Coca Cola pay dividends? Hilton Hotels Since 1919, Hilton has become a household name throughout the U.S. and other countries. ", The World Bank. Since 2016, a company owned by Xinjiang-based real estate tycoon Sun Guangxin had spent an estimated $110 million buying up land in Texas' Val Verde County. For its part, China owned 191,000 acres worth $1.9 billion as of 2019. Yes, this means that the government actually borrows money from itself to fund these and other entitlement programs. "Frequently Asked Questions About the Public Debt. According to the International Monetary Fund (IMF), the only nation with no national debt is Macao SAR. How much do banks charge to manage a trust? Sudan has the most debt in the world, accounting for approximately 284% of its gross domestic product (GDP). Across the country, the 2013 purchase of Smithfield Foods by the Chinese firm Shuanghui, now called WH Group, received national attention and escalated concerns about Chinese intervention in U.S. food systems. The Chinese government's theft of intellectual property has been an open secret for decades. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Douglas R. Bush, Deterring a Cross-Strait Conflict: Beijing's Assessment of Evolving U.S. Strategy, Rethinking Humanitarian Aid: A Conversation with Michelle Nunn, President and CEO of CARE USA, Foreign Purchases of U.S. "The number is very difficult to gauge correctly due to complicated ownership structures that the Chinese sometimes employ. U.S . This compensation may impact how and where listings appear. As Chinese investors buy up U.S. Treasury products, they help increase the value of the dollar. In addition, the U.S. Treasury Department has a proven track record of being able to find new creditors very quickly when needed. Representative Grace Meng expressed concern that the amendment could fuel already rising anti-Asian hate, and the USDA and advocacy groups have pointed out that the USDA does not have the authority to intervene in private land deals. (2021, September 2). At the same time, it relies on the private commercial housing market to meet the needs of higher-income groups. 18, far behind No. US PHARMACEUTICAL INDUSTRY AIMS TO WREST SOME DRUG PRODUCTION BACK FROM CHINA. See Media Page for more interview, contact, and citation details. Missouri had formerly banned all foreign ownership of agricultural land in the state, but one week before Shuanghui took over Smithfield, that rule changed to allow foreign entities to own up to 1 percent of the states farmland. The post, which has been shared over 256,000 times as of April 14, is headlined with "read this before buying meat." "The hogs will still be raised here, but slaughtered and packaged for . Its a massive undertaking to verify who really owns [the land], Maxwell said. The last significant increase in acres occurred between 2012 and 2013 . According to sources, Time Magazine received $700,000, the Financial Times $371,577, Foreign Policy Magazine $291,000, the Los Angeles Times $272,000, and other notable media outlets received more than $1 million. As a Premium user you get access to background information and details about the release of this statistic. This might not sound like a lot, but Chinese ownership of American farmland has exploded dramatically over the last decade. Chinese lenders snap up so much of the U.S. debt for one basic economic reason: protecting its dollar-pegged yuan. "The Chinese have a strong foothold here in the U.S., and Chinese firms have access to what seems like infinite government lending, and because the country's goal of world dominance is ingrained into the minds of their business leaders," explained Paul Murad, president of Nevada-based real estate firm Metroplex. The Communist Party has actively supported investments in foreign agriculture as part of its One Belt One Road economic development plans, aiming to control a greater piece of Chinas food supply chain. Though the magazine named him the largest private farmland owner in January 2021, the Microsoft founder came under fire in early 2022 when he was briefly barred from purchasing 2,100 acres of North Dakota farmland. Investopedia requires writers to use primary sources to support their work. Debt to the Penny., U.S. Department of the Treasury. The data is entirely reliant on self-reporting, and the USDA does not check it for completeness and accuracy, so there are frequent typos, omissions, and outdated information. China held 1.1 trillion U.S. dollars in U.S. securities. In simpler terms, the government wrote itself a really big IOU and bankrupted one account to finance another activity. Congressional Research Service. 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Consequences of Owing Debt to the Chinese, Government Bond: What It Is, Types, Pros and Cons, Repurchase Agreement (Repo): Definition, Examples, and Risks, U.S. Debt Ceiling: Definition, History, Pros, Cons, Clashes, Debt-to-GDP Ratio: Formula and What It Can Tell You, Major Foreign Holders of Treasury Securities, Debt Position and Activity Report, June 2017, Debt Position and Activity Report, June 2022, Your Pension Is a Lie: There's $210 Trillion of Liabilities Our Government Can't Fulfill, Frequently Asked Questions About the Public Debt, China's Gold Market: Progress and Prospects, Federal Debt Held by Federal Reserve Banks. If you are an admin, please authenticate by logging in again. "Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022." statistic alerts) please log in with your personal account. You need at least a Starter Account to use this feature. She is a library professional, transcriptionist, editor, and fact-checker. Appliances (technology), IBMP.C. But, exactly how much does the nation own? This amount is subject to market fluctuations. Legal Statement. "How Much U.S. Debt Does China Really Own?" In a vicious cycle, they sell the U.S. dollars they receive through exports to get renminbi, which increases the supply of U.S. dollars and raises the demand for renminbi, to the point that the renminbi ranked as the eighth most traded currency in the world as of 2019. Q5: What is the real threat to U.S. food security? 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), others would likely step in to service the market. The United States currently produces more than enough food per capita, even after adjusting for food waste. But Meng, Newhouse and committee leaders indicated they would find a solution as the legislation winds through Congress. The rest of the $29 trillion national debt is owned by either people in the U.S. or by the U.S. government itself. 41 on The Land Reports 2022 list of Americans who own the most land. The 2011 U.S. Debt Ceiling Crisis was a contentious debate on the borrowing limit of the United States government in July 2011. David Schlessinger and I founded Five Below 16 years ago with a promise to build an amazing store for teens and pre-teens that offers trend-right, high-quality merchandise all at $5 or less, said Tom Vellios . All rights reserved. Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. While lawmakers remain laser-focused on Chinese buyers, other nationals own much more agricultural property in the United States. That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. Demand for dollar-denominated bonds raises the dollar value compared to that of the yuan. 1 ", The World Bank. Amanda Jackson has expertise in personal finance, investing, and social services. Citing the nonpartisan economic think-tank Paulson Institute, the American Security Institutereport underscores that "Chinese firms and investors own a controlling majority in nearly 2,400 U.S. At some price point, U.S. consumers would buy American products instead. Texas has the largest amount of foreign-held agricultural land, at 4.4 million acres, followed by Maine and Alabama, according to USDA. China must maintain its export-led growth to generate the number of jobs needed to keep its massive population productively engaged. Includes buyers from the People's Republic of China, Hong Kong and Taiwan. On Friday, Starwood Hotels agreed to be acquired by Anbang, a Chinese insurance company that is rapidly buying up U.S. hotels, for over $13 billion . In addition to federal action, some states, like Arizona, could do more to protect their local resources and communities from exploitation by domestic and foreign entities. Christmas in Mainland China is not a public holiday and is not related to religion at all. Indeed, there has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade. Is Americas Debt to China Really So Bad? China drew some headlines in 2013 and 2014 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. China produces 97 percent of U.S. antibiotics and about 80 percent of active pharmaceutical ingredients used in American drugs, giving the Chinese Communist Party absolute control of. So, in part, Chinese demand for American property is a sign of their desire to give their children the best opportunities to have a successful future.. The other 189,000 acres were worth $235 million when purchased and are owned by 62 U.S. corporations with Chinese shareholders. World Gold Council. Gates continues to deny any plot, telling Reddit users in January that he owns less than one four-thousandths of U.S. farmland and invests in farms to improve their production and create jobs. Securities. The value will change whenever China trades Treasury securities or when the prices of those bonds change. That data also shows that the approximately 190,000 acres of farmland owned by Chinese interests has remained virtually unchanged since 2013. China needs this growth to raise its low standard of living. Federal Reserve Bank of St. Louis. "China's Currency Policy," Page 1. At the same time, American consumers are assured of a steady flow of relatively inexpensive Chinese products and services. Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed. This statistic is not included in your account. While some states have strict laws in place, others are more open to foreign investments. So, Lowes operates independently of Walmart. Of that, 195,000 acres, worth almost $2 billion when purchased, are. 2 Which Country Owes the Most Money to China? "How Much Money Does the World Owe China? Smithfield is vertically integrated and owns all aspects of its supply chain, meaning that WH Group now controls a significant portion of U.S. pork production and revenue in addition to farmland. Profit from the additional features of your individual account. By artificially keeping the value of the yuan down, the government reduces the buying power of the Chinese middle class, thus making the sale of exports vital keeping the countrys economy moving. A2: On a large scale, these acquisitions do not represent a substantial enough portion of food production in the United States to threaten national food security. ), after gaining momentum seeded in farm states. Why China Buys U.S. Debt With Treasury Bonds, A Look at National Debt and Government Bonds, National Debt: Definition, Impact, Key Drivers, Current U.S. Debt, 2020 Election: The Key Economic Issues Explained. This also reduces the purchasing power of Chinese earners. Most states, like Texas and Maine, have no restrictions on foreign ownership of land, contributing to the large amount of farmland that is under foreign control in these states. From May 2021 to May 2022, the debt to Japan and China decreased by 4% and 9%, respectively. Dollar-pegging adds stability to the yuan since the dollar is still seen as one of the safest currencies in the world. A paid subscription is required for full access. "Major Foreign Holders of Treasury Securities. What Is the Public Debt, and When Is It Too High? Smithfield was also in line to receive money from the program, which was created to help U.S. farmers strung by trade retaliation from China and other competitors. Sign up to receive The Evening, a daily brief on the news, events, and people shaping the world of international affairs. Subsequently, China and other international players would be obligated to accede to an audit that can be reviewed by the nonprofit Public Company Accounting Oversight Board, which oversees audits of all U.S. companies that endeavor to raise money in public markets. Times Square billboard endeavors to warn of creeping Chinese influence. This has been common practice for many countries ever since the Bretton Woods Conference in 1944. Longley, Robert. A dollar-pegged yuan helps keep down the cost of Chinese exports, which the Chinese government believes makes it stronger in international markets. Every year since 2010, China has held more than $1 trillion in U.S. debt. By June 2017, the debt had grown to $19.8 trillion and was projected to top $20 trillion by January 2018. AMC. Of the total 7.03 trillion held by foreign countries, Japan and Mainland China held the greatest portions. Many Americans find the brand appealing because it has a "Made in America" stamp on its products, however, the company has been owned by Chinese company Haier since 2016. As a major function of its monetary policy, China's central bank, the Peoples Bank of China (PBOC), actively works to prevent this imbalance between the U.S. dollar and renminbi in local markets. Research Associate, Global Food Security Program. SWINE FLU STRAIN WITH 'HUMAN PANDEMIC POTENTIAL' FOUND IN MORE CHINESE PIGS, SCIENTISTS SAY. Mutual Fund and ETF data provided by Refinitiv Lipper. "GDP growth (Annual %) - China. Coronavirus-related sales slumps and supply chain disruption, as well as rising production costs, have also hastened the exodus. Canada is the biggest foreign owner of U.S. agricultural and timber land, and owns 4.7 million acres in the United States. Pallets of sod cover part of the 230 acre Kuenzi Turf & Nursery on June 2, 2021 in Salem, Oregon. To use individual functions (e.g., mark statistics as favourites, set In fact, research firm Gartner revealed last year that a third of supply chain leaders had plans to move at least some of their manufacturing out of China before 2023. Second, the Chinese rely on American markets to buy Chinese-produced goods. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. ThoughtCo. However, the full extent of the Chinese investment as it stands in the U.S. today is far from transparent. For example, in water-scarce regions like the Southwest, outside use of freshwater resources can affect water availability for local farms and communities. 4356 (117)) that would block any new agricultural purchases by companies that are wholly or partly controlled by the Chinese government and bar Chinese-owned farms from tapping federal support programs. The deal meant that WH Group now owns the largest pork producer in the United States as well as over 146,000 acres of Missouri farmland. Forbes. China holds more than $1 trillion of the U.S. national debt. Land grabbingwhen a government, company, or other entity purchases large swathes of land in another countrycan affect local land rights and agricultural production, sometimes putting local food security at risk. As it is not known exactly how much US land is owned by China. Of China's own top 500, 74 percent (370) were state-owned and state stock-holding enterprises, with assets of 27, 370 billion yuan and realizing profit of 266.3 billion yuan, representing 96.96 percent and 84.09 percent respectively of the top 500 corresponding values. These investments artificially increase the value of that land, which then denies young and beginning farmers opportunities to farm.. Newt says China will 'dominate world' if tech theft isn't stopped, 'it's a matter of life and death', share data with Chinese communist spy agencies. Critical Questionsis produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. All Rights Reserved. The debt ceiling is a limit that Congress imposes on the amount that the federal government can owe. This includes the Federal Reserve, which already owns six times as much debt as China. Agricultural Land: Facts, Figures, and an Assessment of Real Threats, Brzezinski Chair in Global Security and Geostrategy, Diversity and Leadership in International Affairs Project, Energy Security and Climate Change Program, Media Relations Manager, External Relations. US National Debt Clock: How Its Warning Affects You. What's the Difference? The quick answer is that as of January 2018, the Chinese owned $1.17 trillion of U.S. debt or about 19% of the total $6.26 trillion in Treasury bills, notes, and bonds held by foreign countries. Bipartisan pressure is building to stop foreign nationals from purchasing American farm operations and receiving taxpayer subsidies. By mid-2017, the total amount of official debt owed by the federal, state, and local governments was more than $19.8 trillion. 6 Modern U.S. Presidents Who Raised the Debt Ceiling, Expansionary vs. Foreign investors by the end of 2019 held an interest in more than 35 million acres an area bigger than New York State. Quotes displayed in real-time or delayed by at least 15 minutes. Foreign debt provides the opportunity for countries to secure the financing they ordinarily wouldn't have access to and to stimulate their economy. The resulting loss of export business would lead to a major unemployment crisis in China. China holds the number two position, holding $980.8 billion of U.S. Treasurys3.2% of the total U.S. debt. Alibaba handles more business than any other e-commerce company. Chinese billionaire and businessman Wang. 04 Mar 2023 03:14:21 Currently, you are using a shared account. Cena's apology made him a darling to Chinese nationalists and a punching bag for U.S. media. You need a Statista Account for unlimited access. July 18, 2022. In 2019, Chinese nationals purchased 6,300 properties in the United States, generating about 4.5 billion U.S. dollars in sales. It allows the U.S. Treasury to borrow more at low rates. Owning U.S. Treasury notes helps China's economy grow. Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022 [Graph]. https://www.thoughtco.com/how-much-debt-does-china-own-3321769 (accessed March 4, 2023). What is the highest credit limit for Chase Sapphire? Six states Hawaii, Iowa, Minnesota, Mississippi, North Dakota and Oklahoma currently ban foreign ownership of farmland. How Much Money Does the U.S. Of the 109 countries that own U.S. agricultural land, China ranks No. Continuing a trend that began early in 2021, China's portfolio of U.S. government debt in May dropped to $980.8 billion, according to Treasury Department data released Monday. "GDP Growth (Annual %) - China. Powered and implemented by FactSet Digital Solutions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). Total number of residential properties bought by Chinese buyers in the U.S. 2010-21. United States Treasury Fiscal Data. When the pandemic hit, Smithfield increased pork exports to China even as the United States experienced widespread meat shortages due to supply chain disruptions and Smithfield closed some of its plants due to poor working conditions. Understanding the actual extent and impact of Americas debt to China requires a closer look at these massive amounts of money. With the U.S. dollar considered one of the safest and most stable currencies in the world, dollar-pegging helps the Chinese government maintain the stability and value of the yuan. With an aging U.S. farmer population and not enough new farmers able to enter the industry, more land will inevitably be converted to other uses or sold to foreign and domestic investors unless policies are put in place to support the next generation of farmers. I would suggest that we sit down and we work through it so we can accomplish our objective, but do it in a way that is sensitive to all those who might be somewhat offended by the approach.. As a result, the public does not have a complete picture of which foreign entities own how much U.S. farmland or what the land is being used for.