China surpasses Japan as US' biggest creditor
China surpasses Japan as US' biggest creditor
chinadaily.com.cn | Updated: 2017-08-16
A $100 banknote is placed next to 100 yuan banknotes in this October 16, 2010 file picture illustration taken in Beijing. [Photo/Agencies]
China overtakes Japan as the largest foreign owner of US treasury securities after increasing its holdings for the fifth straight month to $1.15 trillion as of the end of June this year.
The China's June figure surpassed Japan's $1.09 trillion of US bonds, notes and bills in the same period, according to latest data from the US Treasury Department on Tuesday.
As of June, China owns long-term US treasury securities of $1.14 trillion and 2.35 billion short-term securities.
Thomas Simons, a senior economist at Jefferies LLC in New York, said to Bloomberg that China's holdings may continue to increase in the coming months, given strong trade flows between US and China boosting more treasury demand.
Year-on-year, the June figures also indicate that China and Japan decreased holdings by $94.3 billion and $56.3 billion respectively.
Japan became US biggest creditor in October, when it owned $1.13 trillion treasuries, and ranked second after eight month.
From the data, the rest of the top five US creditors by the end of June are Ireland, Brazil and Cayman Islands holding $302.5 billion, $269.7 billion and $254 billion respectively.
Tan Xinyu contributed to this story.
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I wonder if Trump could piss Xi Jinping enough to have him call the loan. What would happen if he did?
''What would happen if he did?''
Oh the shit would really hit the fan. Trump could try to make a deal...After all ''The Art of the Deal'' is his motto.
What would happen if he did?
An interesting thought experiment. Of course they can't just call in a loan as they are notes and bonds, but they could stop buying treasuries and dump existing holdings on the market, which is not unlike the $191B reduction from last June through November. That could theoretically drive up interest rates as it might swamp demand, although the FED could resume QE. In any case, the bonds could lose value, thereby causing a drop in value at point of sale for China. As the demand for dollar assets wane, the dollar could plummet against the yuan and possibly other currencies, which would likely make imported goods more expensive and exports more attractive... or narrowing of the trade imbalance.
So many scenarios!!!
And does China control our interest rate policy or the FED?
Good thing we have donald the bankruptcy king.....
sarc