What would happen if China called in all US debt?
If China (or any other nation that has a trade surplus with the U.S.) stops buying
If China sells their holdings of U.S. Treasury Bonds, the Renminbi will rise and that will lead to financial instability that will lead to a lot of issues such as making their exports more expensive.
Nations like China typically hold US debt in the form of various US Treasury debt, including bonds and other notes. None of these instruments allow debt holders to simply demand repayment…you get the terms and conditions associated with the bond and there's little flexibility to “calling in all of their debts”.
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.
[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).
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.
China owns 384,000 acres of American agricultural land. That's a 30% increase just since 2019. And on top of that, they own land near an air force base in North Dakota.
The largest holder of U.S. debt is the U.S government. Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.
2019 due to Russia & China selling their Treasury bonds? According to the US Treasury, Russian ownership of US Treasuries was $2.1 Billion in Nov 2022.
Nominal GDP Growth Rates During the Asian Financial Crisis
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.
What country is not in debt?
| Characteristic | National debt in relation to GDP |
|---|---|
| Macao SAR | 0% |
| Brunei Darussalam | 2.06% |
| Kuwait | 3.08% |
| Hong Kong SAR | 4.27% |
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.
Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.
China was expected to experience a rip-roaring recovery after it lifted strict COVID-19 restrictions. But almost a year after the measures ended, the Chinese economy seems to be stumbling. Prices have fallen. Exports and imports have plummeted.
China is one of the United States's largest creditors, owning about $859.4 billion in U.S. debt. 1 However, it does not own the most U.S. debt of any foreign country. Nations borrowing from each other may be as old as the concept of money.
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.
Federal Borrowing
The federal government borrows money from the public by issuing securities—bills, notes, and bonds—through the Treasury. Treasury securities are attractive to investors because they are: Backed by the full faith and credit of the United States government.
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 Walt Disney Company owns 43 percent of the resort; the majority 57 percent is held by Shanghai Shendi Group, a joint venture of three companies owned by the Shanghai government.
The United States does not own any land in China. However, the US does have a diplomatic presence in China through the US Embassy in Beijing and various consulates in other cities. These diplomatic properties are not owned by the US, but rather leased from the Chinese government.
Who owns the most land in the US?
The largest private landowner in the United States is the Emmerson family, which owns and operates Sierra Pacific Industries, one of the largest lumber producers in the country.
Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).
Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion.
A nation saddled with debt will have less to invest in its own future. Rising debt means fewer economic opportunities for Americans. Rising debt reduces business investment and slows economic growth.
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.
