Who owns the most US Treasury bonds?
The largest holder of
Foreign holders of United States treasury debt
Of the total 7.6 trillion held by foreign countries, Japan and Mainland China held the greatest portions, with China holding 868.9 billion U.S. dollars in U.S. securities.
For a long time, the biggest holder of U.S. debt was China. But did you know that in late 2016, Japan overtook China as the biggest foreign holder of U.S. debt? Japan and China are, by far, the two biggest holders of U.S. debt – but the top five is filled with countries that you might not expect.
What Would Happen If China Sold All of Its Treasuries? It is unlikely that China would sell its U.S. Treasuries all at once because this would be economically painful for China and leave it holding dollars that it would need to spend or invest elsewhere.
The reason is simple. Japan has long been one of the largest exporters to US. They get USD for the sales and simply park the funds in US government debt. This would only stop if they seize to export so much.
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.
Singapore is one of Asia's major financial centers. It is also one of the most prosperous countries on the planet. And all this has been achieved without taking on any meaningful public debt. In fact, very much like Norway, Singapore has more assets than debt.
Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion.
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.
Who is dumping US Treasuries?
Apollo Global Management's Torsten Sløk also pointed to China recently, citing official US data that showed the country had sold $300 billion worth of Treasurys since 2021. And in August, a $21.2 billion dump of US assets by China was largely made up of Treasurys.
So, if the bond market declines or crashes, your investment account will likely feel it in some way. This can be especially concerning for investors with portfolios heavily weighted toward bonds, such as those in or near retirement.
| Face Value | Purchase Amount | 30-Year Value (Purchased May 1990) |
|---|---|---|
| $50 Bond | $100 | $207.36 |
| $100 Bond | $200 | $414.72 |
| $500 Bond | $400 | $1,036.80 |
| $1,000 Bond | $800 | $2,073.60 |
Years of elevated budget deficits, exacerbated by massive federal spending during the COVID-19 pandemic, have taken the debt to historic levels: totaling more than $26 trillion in 2023, U.S. federal government debt is now at its highest percentage of gross domestic product (GDP) since World War II.
France. France is another nation that borrows money from the US. As of January, France owes $183.9 billion to the US. This makes it another top nation that owes the US money.
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. Offered in a wide range of maturities.
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. China is constantly burning through their holdings of FX reserves to “support” the Yuan.
As of December 2023, total federal debt was $33.1 trillion; $26.5 trillion held by the public and $12.1 trillion in intragovernmental debt.
26. China. China had the second-largest total wealth of $84.48 trillion in 2022. Being one of the largest economies in the world, China makes it to our list of the wealthiest countries by per capita net worth.
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.
Is China dumping the dollar?
China's Central Bank dumped the US dollar in the currency market for three consecutive days in December this month. The Chinese state-run banks sold US dollars in the spot foreign exchange as retaliation to Moody's negative rating on the Yuan.
China sells the most US assets in 4 years, dumping $21 billion of US stock and Treasury bonds. Chinese investors sold $21.2 billion in US equities and Treasuries, the US Treasury said Wednesday. Chinese investors sold an all-time record $5.1 billion of US stocks that month.
Japan has the highest percentage of national debt in the world at 259.43% of its annual GDP.
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023. *For the U.S. and Canada, gross debt levels were adjusted to exclude unfunded pension liabilities of government employees' defined-benefit pension plans.
China owes the United States $1.3 trillion, which is the most debt out of all the countries that are its debtors. Japan was the primary debt holder until 2008, but now comes in second place, with $1.2 trillion. Other countries with outstanding U.S. debt include Russia, India and South Korea.
References
- https://www.cnn.com/2023/05/25/economy/japan-china-us-debt-default-intl-hk/index.html
- https://www.usnews.com/news/best-countries/articles/the-top-10-economies-in-the-world
- https://finance.yahoo.com/news/30-wealthiest-countries-per-capita-111348314.html
- https://en.wikipedia.org/wiki/National_debt_of_Japan
- https://www.cfr.org/backgrounder/us-national-debt-dilemma
- https://www.investopedia.com/articles/investing/040115/reasons-why-china-buys-us-treasury-bonds.asp
- https://www.bu.edu/articles/2023/what-is-the-sovereign-debt-crisis-and-can-we-solve-it/
- https://www.bloomberg.com/news/articles/2024-04-01/us-government-debt-risk-a-million-simulations-show-danger-ahead
- https://homework.study.com/explanation/what-would-happen-if-the-u-s-actually-paid-off-the-national-debt-where-would-the-banks-big-financial-institutions-and-government-foreign-and-domestic-put-their-cash.html
- https://www.treasurydirect.gov/government/historical-debt-outstanding/
- https://www.gao.gov/americas-fiscal-future/federal-debt
- https://www.statista.com/statistics/246420/major-foreign-holders-of-us-treasury-debt/
- https://www.titlemax.com/discovery-center/money-finance/debts-owed-by-the-us-and-owed-to-the-us/
- https://www.marketplace.org/2023/11/07/why-is-china-selling-off-its-us-debt-treasurys/
- https://www.quora.com/If-China-owns-most-of-our-debt-what-would-happen-if-they-stopped-buying-our-bonds
- https://www.itsuptous.org/blog/who-does-us-owe-money-to
- https://www.laconiadailysun.com/news/state/these-states-are-where-americans-have-the-most-least-debt/article_0d3c56d9-4b20-5488-a827-38788dd57b2f.html
- https://www.marketplace.org/2024/01/30/us-national-debt-34-trillion/
- https://www.thebalancemoney.com/who-owns-the-u-s-national-debt-3306124
- https://www.nerdwallet.com/article/investing/bond-market-crash
- https://collins.house.gov/media/press-releases/collins-china-buying-us-farmland
- https://www.focus-economics.com/country-indicator/russia/public-debt/
- https://en.wikipedia.org/wiki/Debt-trap_diplomacy
- https://www.investopedia.com/articles/markets-economy/090616/5-countries-own-most-us-debt.asp
- https://www.investopedia.com/articles/investing/102413/why-and-when-do-countries-default.asp
- https://www.visualcapitalist.com/government-debt-by-country-advanced-economies/
- https://www.pgpf.org/infographic/the-national-debt-is-now-more-than-34-trillion-what-does-that-mean
- https://www.pgpf.org/top-10-reasons-why-the-national-debt-matters
- https://www.cbsnews.com/minnesota/news/good-question-how-did-the-u-s-debt-get-so-high/
- https://www.quora.com/How-long-would-it-take-to-pay-off-the-national-debt-of-the-United-States-if-the-government-stopped-spending-money-and-only-used-money-from-tax-revenue-to-pay-it-off
- https://www.ceicdata.com/en/indicator/russia/government-debt--of-nominal-gdp
- https://time.com/personal-finance/article/savings-bonds-guide/
- https://www.marketplace.org/2023/05/26/who-does-the-u-s-owe-31-4-trillion/
- https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
- https://www.visualcapitalist.com/which-countries-hold-the-most-us-debt/
- http://fingfx.thomsonreuters.com/gfx/rngs/CHINA-DEBT-GRAPHIC/0100315H2LG/
- https://www.quora.com/How-much-does-Mexico-owe-the-United-States
- https://www.quora.com/If-China-sells-all-US-treasury-bonds-what-will-happen-to-the-US-economy
- https://www.clearfinances.net/countries-without-public-debt/
- https://www.quora.com/Why-does-the-U-S-borrow-money-from-China-despite-having-a-strong-economy
- https://www.huffpost.com/entry/jerome-kerviel-most-debt-in-the-world_n_2077219
- https://www.pgpf.org/blog/2023/05/the-federal-government-has-borrowed-trillions-but-who-owns-all-that-debt
- https://en.wikipedia.org/wiki/National_debt_of_the_United_States
- https://www.bloomberg.com/news/newsletters/2024-01-06/bloomberg-new-economy-china-s-debt-mountain-is-even-bigger-than-feared
- https://www.incharge.org/debt-relief/how-much-debt-is-too-much/
- https://www.imf.org/en/Blogs/Articles/2023/09/13/global-debt-is-returning-to-its-rising-trend
- https://www.bizjournals.com/pacific/news/2024/01/05/hawaii-gets-a-perfect-score-in-debt.html
- https://www.barrons.com/articles/-bank-of-japan-early-warning-u-s-5c9dd0e2
- https://en.wikipedia.org/wiki/Financial_position_of_the_United_States
- https://www.quora.com/How-much-does-America-owe-to-other-countries-and-how-much-do-those-countries-owe-America
- https://taxfoundation.org/blog/us-debt-compares-to-other-countries/
- https://uk.finance.yahoo.com/news/countries-owe-china-billions-struggling-130000651.html
- https://www.barrons.com/articles/net-wealth-is-over-135-trillion-where-that-money-resides-d722c9c6
- https://thehill.com/opinion/international/4075341-china-is-in-default-on-a-trillion-dollars-in-debt-to-us-bondholders-will-the-us-force-repayment/
- https://worldpopulationreview.com/country-rankings/countries-by-national-debt
- https://www.quora.com/Why-does-Japan-hold-so-much-U-S-government-debt-What-might-motivate-them-to-stop-doing-this-in-the-future
- https://www.quora.com/What-would-happen-if-the-USA-and-other-countries-stopped-trading-with-China
- https://www.carlylefinancial.com/blog/if-the-dollar-collapses-what-happens-to-your-house/
- https://finance.yahoo.com/news/top-20-countries-owe-us-175515001.html
- https://www.investopedia.com/articles/economics/10/national-debt.asp
- https://www.forbes.com/advisor/credit-cards/average-credit-card-debt/
- https://knowledge.wharton.upenn.edu/article/how-the-u-s-could-stabilize-debt-and-fuel-economic-growth/
- https://www.foxbusiness.com/economy/us-national-debt-tops-34t-how-much-debt-is-too-much-debt
- https://budgetmodel.wharton.upenn.edu/issues/2023/10/6/when-does-federal-debt-reach-unsustainable-levels
- https://watcher.guru/news/brics-china-central-bank-dumping-us-dollar-currency
- https://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/
- https://www.investopedia.com/articles/investing/080615/china-owns-us-debt-how-much.asp
- https://www.titlemax.com/discovery-center/money-finance__trashed/debts-owed-by-the-us-and-owed-to-the-us/
- https://www.itsuptous.org/blog/consequences-of-national-debt
- https://www.quora.com/The-UK-owns-about-755-000-000-000-of-the-USA-debt-how-much-more-of-the-USA-debt-could-the-UK-own-and-what-impact-does-that-have-on-both-countries
- https://www.history.com/this-day-in-history/andrew-jackson-national-debt-reaches-zero-dollars
- https://finance.yahoo.com/news/china-sells-most-us-assets-223331094.html
- https://usafacts.org/articles/which-countries-own-the-most-us-debt/
- https://chinapower.csis.org/us-debt/
- https://www.quora.com/What-happens-if-all-countries-stop-buying-US-treasuries
- https://www.taxpolicycenter.org/briefing-book/how-does-federal-government-spend-its-money
- https://finance.yahoo.com/news/china-really-dumping-treasury-bonds-002534002.html
