Page 17 - SCBJ-201609
P. 17
September 2016
COHFIUNSA’FSEODWERNAELRDSEHBIPT CHINA’S OTWNERFSHIP|mericans are concerned about the large amount of
ld by Beijing. Those Americans might assume that
{OF US FEDERAL DEBThsihnipa gives it some sort of leverage over the US.
rade acts
esn’t own as China only We own
owns about
T/irhaholedeweccxh/htaeoilnnletcanhthgieanta 66%
7%
and its long of our
of the own debt
einsaize of US debt
efsrtwicoaoforwwldeos rld Japan
Other foreign 7%
ending over the countries
19% Who buys a significant share of US debt would do
several ways, these prom- just the opposite: disrupt markets, cre-
d bonds, ate tensions with China’s largest trade
ked securities. partner, and harm the value of China’s
th pre- investments.
e range of issory notes? The Pentagon evaluated China’s owner-
US debt is ship of US debt and came to the same
P not lose it. A decision by China to sell off a significant A wide range conclusion: “Attempting to use US Trea-
ernments, sury securities as a coercive tool would
tual funds, OshLLaSreTEofLLUUSSdtehbat mwaonuyldAmdoerjiucasntsthe oppoofspiteeo:pdleisarnudptentities. About two-thirds have limited effect and likely would do
debt is owned more harm to China than to the United
ina is the amreacroknectesr,ncerdeaabtoeuttethnesilaorngse wamitohunCthina’solaf UrgSedstebttraisdoewned by Americans – local States.”
on, but this partner, and harm the value of China’s investments.
tal US debt. of and state governments, institutional in- Ultimately, China’s debt holdings have
f US debt US government debt held by Beijing. become proof of an old adage: When you
owe your bank thousands of dollars, it’s
? Most ThoseTAhmeePriecnantsagmoinghetvaassluumateetdhaCt hina’s ownevresshtioprsolfikUeSbadnekbstand mutual funds, and your problem, but when you owe your
ach year bank millions of dollars, it’s your bank’s
t we have as Chinaa’snddebctaomwenetroshthipegsivaems iet scoomncelsuosriton: “AttienmdipvtiidnugaltionuvessetoUrsS. The remaining debt problem. America owes China about $1
US economy Treasury securities as a coercive tool would have limited trillion dollars. Until we balance the US
y, and it is budget and pay down our debt, China’s
ess. of leveerfafegectovaenrdthleikUeSly. would do more harm tios Cowhinnead tbhyanfotroeign governments and ownership of 7 percent of the national
debt will continue to give it a vested in-
t interest in the United States.” investors. China is the largest foreign terest in America’s prosperity, not lever-
. Like any age to do us harm.
r hold value, If so,UAltmimeraictaenlys,cCanhinreas’ts edaesbietrh. oClhdiinnags havedebbetcohmoledeprrowoifth $1.2 trillion, but this
doesno’ft aonwnoladsamduacghe:oWf ohuerndyebotuaoswyeouyour baanmkouthnotsutsoanondlsy about 7 percent of total This article was first published by US-China Business
ress Council.
mightofthdionlkla. rTso, itth’se yeoxuternpt rtohbalteimt ,dbouest, whenUySoudeobwt.eTyhoautramount is about the same
the pAbraombnelkermimcaiilsloiwoCnehssinoCaf’hsd,ionnlaloaatrbso,ouuirtts’s.$y1Tohtuerrilbliaonnkda’smolpolaruornbst.loeUfmnU.tSildebt owned by Japan.
challewnegebafolranAcmeetrhiceaUisStbhuedsgizeet oafnodupray down our debt,
fiscalCdheifnicait’saonwdnitesrslohnipg otef r7mpeimrcpelnictao- f the nWahtiaotndaoledsebaltl of this mean for Ameri-
tionswpfroiolrlspcoouenrritteiync,ounneootmtolyeg,vivneeroatitgteahetvoesdsiztoeeudosfinhtaerrmesc.tanins?AMmoesrticima’sportantly, we continue to
China’s debt holdings. spend more each year than we take in,
adding to the overall debt we have as a
Consider the facts: as of March 2016, nation. This is an issue that affects the
America owes almost $19 trillion to cred- US economy in a variety of ways, few of
itors for overspending over the years. them positively, and it is something that
we as a nation must address.
The US government pays for its debts in
several ways, including sales of Treasury It also means that China has a significant
bills, notes and bonds, savings bonds, interest in the economic success of the
and other government-backed securities. United States. Like any investor, China
These are essentially promissory notes wants its assets to gain or hold value,
with pre-determined payment due dates. not lose it. A decision by China to sell off
15
COHFIUNSA’FSEODWERNAELRDSEHBIPT CHINA’S OTWNERFSHIP|mericans are concerned about the large amount of
ld by Beijing. Those Americans might assume that
{OF US FEDERAL DEBThsihnipa gives it some sort of leverage over the US.
rade acts
esn’t own as China only We own
owns about
T/irhaholedeweccxh/htaeoilnnletcanhthgieanta 66%
7%
and its long of our
of the own debt
einsaize of US debt
efsrtwicoaoforwwldeos rld Japan
Other foreign 7%
ending over the countries
19% Who buys a significant share of US debt would do
several ways, these prom- just the opposite: disrupt markets, cre-
d bonds, ate tensions with China’s largest trade
ked securities. partner, and harm the value of China’s
th pre- investments.
e range of issory notes? The Pentagon evaluated China’s owner-
US debt is ship of US debt and came to the same
P not lose it. A decision by China to sell off a significant A wide range conclusion: “Attempting to use US Trea-
ernments, sury securities as a coercive tool would
tual funds, OshLLaSreTEofLLUUSSdtehbat mwaonuyldAmdoerjiucasntsthe oppoofspiteeo:pdleisarnudptentities. About two-thirds have limited effect and likely would do
debt is owned more harm to China than to the United
ina is the amreacroknectesr,ncerdeaabtoeuttethnesilaorngse wamitohunCthina’solaf UrgSedstebttraisdoewned by Americans – local States.”
on, but this partner, and harm the value of China’s investments.
tal US debt. of and state governments, institutional in- Ultimately, China’s debt holdings have
f US debt US government debt held by Beijing. become proof of an old adage: When you
owe your bank thousands of dollars, it’s
? Most ThoseTAhmeePriecnantsagmoinghetvaassluumateetdhaCt hina’s ownevresshtioprsolfikUeSbadnekbstand mutual funds, and your problem, but when you owe your
ach year bank millions of dollars, it’s your bank’s
t we have as Chinaa’snddebctaomwenetroshthipegsivaems iet scoomncelsuosriton: “AttienmdipvtiidnugaltionuvessetoUrsS. The remaining debt problem. America owes China about $1
US economy Treasury securities as a coercive tool would have limited trillion dollars. Until we balance the US
y, and it is budget and pay down our debt, China’s
ess. of leveerfafegectovaenrdthleikUeSly. would do more harm tios Cowhinnead tbhyanfotroeign governments and ownership of 7 percent of the national
debt will continue to give it a vested in-
t interest in the United States.” investors. China is the largest foreign terest in America’s prosperity, not lever-
. Like any age to do us harm.
r hold value, If so,UAltmimeraictaenlys,cCanhinreas’ts edaesbietrh. oClhdiinnags havedebbetcohmoledeprrowoifth $1.2 trillion, but this
doesno’ft aonwnoladsamduacghe:oWf ohuerndyebotuaoswyeouyour baanmkouthnotsutsoanondlsy about 7 percent of total This article was first published by US-China Business
ress Council.
mightofthdionlkla. rTso, itth’se yeoxuternpt rtohbalteimt ,dbouest, whenUySoudeobwt.eTyhoautramount is about the same
the pAbraombnelkermimcaiilsloiwoCnehssinoCaf’hsd,ionnlaloaatrbso,ouuirtts’s.$y1Tohtuerrilbliaonnkda’smolpolaruornbst.loeUfmnU.tSildebt owned by Japan.
challewnegebafolranAcmeetrhiceaUisStbhuedsgizeet oafnodupray down our debt,
fiscalCdheifnicait’saonwdnitesrslohnipg otef r7mpeimrcpelnictao- f the nWahtiaotndaoledsebaltl of this mean for Ameri-
tionswpfroiolrlspcoouenrritteiync,ounneootmtolyeg,vivneeroatitgteahetvoesdsiztoeeudosfinhtaerrmesc.tanins?AMmoesrticima’sportantly, we continue to
China’s debt holdings. spend more each year than we take in,
adding to the overall debt we have as a
Consider the facts: as of March 2016, nation. This is an issue that affects the
America owes almost $19 trillion to cred- US economy in a variety of ways, few of
itors for overspending over the years. them positively, and it is something that
we as a nation must address.
The US government pays for its debts in
several ways, including sales of Treasury It also means that China has a significant
bills, notes and bonds, savings bonds, interest in the economic success of the
and other government-backed securities. United States. Like any investor, China
These are essentially promissory notes wants its assets to gain or hold value,
with pre-determined payment due dates. not lose it. A decision by China to sell off
15
