China's debt problem (2024)

FAQs

Is China's debt a problem? ›

In addition, household debt - mostly mortgages - is 61 per cent of GDP. Altogether, China's gross national debt is over 300 percent of GDP. A high debt burden constrains the government's fiscal firepower, preventing it from unleashing bolder stimulus and weakening its effectiveness when implementing support measures.

China has little overseas debt, and a high national savings rate. In addition, most of the debt is state owned – state-controlled banks loaned funds to state-controlled firms – giving the government the ability to manage the situation.

If China (or any other nation that has 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.

China is in the midst of a profound economic crisis. Growth rates are flagging as an unsustainable mountain of debt piles up; China's debt-to-GDP ratio reached a record 288% in 2023.

Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.

In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.

The costs to the U.S. economy if we were to prohibit domestic companies (impacting companies such as GE, Honeywell, Collins, and Parker Aerospace) from engaging with COMAC would be significant: The U.S. Chamber of Commerce estimates that losing access to China's aviation market would translate into a loss of $38 ...

Who holds America's national debt? ›

Who owns the U.S. debt? There are two basic categories of debt owners: 1) the public, which includes foreign investors and domestic investors and, 2) federal accounts, also known as "intragovernmental holdings." Each category is explained below.

According to the US Treasury, Russian ownership of US Treasuries was $2.1 Billion in Nov 2022.

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.

One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues. To pay that deficit, the government borrows money.

The national debt is the total amount of money the U.S. owes its creditors, which includes “the public” (individual investors, businesses, commercial banks, pension funds, mutual funds, state and local governments, the Federal Reserve System and foreign governments) as well as other parts of the federal government, ...

China's biggest problem is a 'lack of confidence,' Standard Chartered CEO says. Investors are closely watching China, whose stock market gyrations, deflation problem and property woes are casting a shadow over global growth outlook.

But most of Japan's debt is owned by domestic investors. The country's external position is bolstered by a large current account surplus and foreign exchange reserves worth more than $1 trillion. At the end of last year, Japan's overseas assets were around 84% of its annual economic output.

Who owns the U.S. debt? There are two basic categories of debt owners: 1) the public, which includes foreign investors and domestic investors and, 2) federal accounts, also known as "intragovernmental holdings." Each category is explained below.