But an escalation of tensions with the Trump administration in 2019 saw Beijing pare back its holdings, and Japan surpassed China as the top creditor that year. US Treasury bonds are widely regarded as one of the safest investments on Earth, and China’s holdings of US government debt ballooned from $101 billion to peak at $1.3 trillion in 2013.Ĭhina was the largest foreign creditor to the United States for more than a decade. That generated vast amounts of dollars for China and it needed a safe place to stash them.
Together they own $2 trillion - more than a quarter - of the $7.6 trillion in US Treasury securities held by foreign countries.īeijing started to ramp up buying of US Treasuries in 2000, when the United States effectively endorsed China’s entry into the World Trade Organization, triggering an export boom. As the clock ticks down toward an unprecedented US debt default, the world’s second- and third-biggest economies are watching in fear.Ĭhina and Japan are the largest foreign investors in American government debt.
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