China’s Ownership of U.S. Government Debt Peaked in 2013

(CNSNews.com) - Although entities in mainland China remained the largest foreign owners of U.S. government debt, according to the latest data published by the U.S. Treasury Department (which ran through the end of June), Chinese ownership of U.S. government debt peaked in November 2013.

As of the end of June, according to data the treasury released on Aug. 17, entities in mainland China owned approximately $1,271,200,000,000 in U.S. Treasury securities.

However, that was down $45,500,000,000 from the approximately $1,316,700,000,000 in U.S. Treasury securities the mainland Chinese owned at the end of November 2013, when Chinese holdings of U.S. government debt peaked.

In February of this year, Japan eclipsed China for one month as the top foreign owner of U.S. government debt. In that month, entities in Japan owned approximately $1,224,400,000,000 in U.S. government debt and entities in China owed $1,223,700,000,000.

As of the end of June, Japan owned $1,197,100,000,000 in U.S. government debt, which was about $74.1 billion less than China’s $1,271,200,000,000.

The Treasury has published a month-by-month listing of its estimates of the largest foreign owners of U.S. government debt going back to March 2000.

The Treasury’s data shows that entities in Japan were the largest foreign owners of U.S. government debt from that month through August 2008. In September 2008, entities in China took over the position as the top foreign owners of U.S. government debt. In that month, China owned approximately $618,200,000,000 in U.S. government debt and Japan owned $617,500,000,000.

From September 2008 through June 2015, China’s ownership of U.S. debt grew by $653 billion—or approximately 106 percent—to $1,271,200,000,000.

During the same period, the U.S. government debt held by the public—as opposed to the “intragovernmental debt,” which the government has borrowed out of trust funds such as the Social Security trust funds and owes back to those trust funds--also more than doubled. At the end of September 2008, the U.S. government debt held by the public was approximately $5,808,692,000,000, according to the Treasury’s Monthly Statement of the Public Debt. At the end of this June it was approximately $13,076,414,000,000—up $7,267,722,000,000 (or 125 percent) from September 2008.

The Federal Reserve currently owns more U.S. government debt than China, according to the Fed’s latest weekly balance sheet. As of Wednesday, Aug. 19, the Fed owned $2,461,785,000,000 in U.S. Treasury securities. (As of July 1, one day after the Treasury’s latest date for China’s ownership of debt, the Federal Reserve owned $2,460,975,000,000 in U.S. Treasury securities.)

As of the end of June/July 1, China, Japan and the Federal Reserve owned a combined $4,929,275,000,000. That was about 37.7 percent of all the U.S. government debt held by the public ($13,076,414,000,000) at that time.

The combined $4,929,275,000,000 in U.S. government debt own by the Fed, China and Japan at the end of this June also equaled 84.8 percent of the total of $5,808,692,000,000 in U.S. government debt held by the public as of September 2008.

In total as of the end of June, the Treasury estimated, foreign entities owned $6,175,200,000,000 in U.S. government debt. That foreign-held U.S. government debt as of the end of this June was $366,508,000,000 more than all of the U.S. government debt held by the public as of September 2008.