"Major Foreign Holders of Treasury Securities. July 20, 2021 Ryan Morgan U.S. lawmakers are acting with increased concern as Chinese purchasers are buying tens of thousands of acres of U.S. farmland. (Other Hollywood companies are partly or wholly owned by Chinese interests We know that education is one of the most common reasons that Chinese families purchase real estate in the US, he said. The Department of Agriculture requires foreign entities who buy U.S. agricultural land to file a report within 90 days disclosing what they bought. "How Much U.S. Debt Does China Really Own?" It's more of a novelty day like Valentine's Day, rather than a religious celebration. Those seeking more restrictions say USDAs numbers actually understate the amount of foreign control over American ag operations. and Caitlin Welsh. For example, the huge amount of debt that the U.S. government owes Chinese lenders has been the subject of countless debates, headline news stories, and political platforms for decades. The source adds the following information: "estimates from 2010 thru 2015 include some commercial transactions. RT @lillybug000: How much more does any American have to see to realize our government is owned by China. A3: The only federal law governing these transactions is the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978. Pressing Challenges to U.S. Army Acquisition: A Conversation with Hon. Most countries want their currency values to fall so they can win global currency wars. In May 2018, one Chinese yuan was worth about $0.16 U.S. dollar. According to the NYFC, young and aspiring farmers say access to land is their largest barrier to starting a successful farm business. Popular cinema company AMC, short for American Multi-Cinema, has been around for over a century and is headquartered in Leawood, KS. And its findings may be surprising to some. Register in seconds and access exclusive features. Well, really, the hallmark has been an almost otherworldly disconnection from the actual affairs of the United States. That changed with the USMCA. In 2019, 49 percent of reported foreign-held acreage in the United States was forest land, while 25 percent was crop land, 24 percent was for pasture and other agricultural uses, and 2 percent was for non-agricultural uses (such as homesteads and roads). By artificially keeping the value of the yuan down, the government reduces the buying power of the Chinese middle class, thus making the sale of exports vital keeping the countrys economy moving. China also became the world's biggest exporter in 2009. [U]nder Xi Jinping, the Communist party has returned to being the ultimate authority in business," writes The Guardian. What is the highest credit limit for Chase Sapphire? What Is the Public Debt, and When Is It Too High? For example, in water-scarce regions like the Southwest, outside use of freshwater resources can affect water availability for local farms and communities. Does paying off all debt increase credit score? Owe China? Angela Huffman is a sixth-generation farmer in Wyandot County, which, along with Paulding County, has more than 41,000 acres of foreign-owned farmland. The AFIDA requires foreign entities to report transactions of farmland to the USDA and imposes steep penalties for failing to report (up to 25 percent of the fair market value of the land), although they are rarely enforcedthe last fine imposed under the act was in 2014. Milos Maricic, an international affairs expert and World Economic Forum contributor, concurred that while China owns close to $150 billion in U.S. companies not particularly huge in comparison to the U.S. economy there is a lot about the available figure that we simply do not know. The Chinese spy balloon shot down February 4 increased worries that foreign governments could use U.S. land for espionage efforts, reports the Journal. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. The House passed the agriculture appropriations bill on July 29, raising questions about how it will be enforced if it becomes law. The answer to that question seems to be a constant source of controversy among Americas political leaders and media commentators. The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. AMC. But its the trend of increasing purchases and the buyers potential connections to the Chinese government that have lawmakers spooked. The debt-to-GDP ratio measures the proportion of a country's national debt to its gross domestic product. We are new in this process, said Rep. Sanford Bishop (D-Ga.), chair of the agriculture appropriations subcommittee. The National Young Farmers Coalition (NYFC) anticipates that two-thirds of farmland will change hands over the next decade as farmers retire, meaning that more land could become available for foreign purchase. There are two main economic reasons Chinese lenders bought up so many U.S. Treasury securities. Foreign-owned land accounts for about 2.7% of all U.S. farmland and forest land, which, according to the Department of Agriculture, is about 897 million acres. Outward FDI stock share of state-owned and private enterprises in China 2011-2021 FDI outflows from Chinese central enterprises in non-financial sectors 2011-2021 Value of Chinese FDI flows to the . Retrieved from https://www.thoughtco.com/how-much-debt-does-china-own-3321769. The last significant increase in acres occurred between 2012 and 2013 . "Debt Position and Activity Report, June 2017," Page 1. If the Chinese suddenly decided to call in all of the federal government's obligations (which isn't possible, given the maturities of debt securities), others would likely step in to service the market. ", TreasuryDirect. 3 1. How Did the U.S. National Debt Get So Big? The U.S. farmer population is aging, with an average age of 57.5 in 2017, up from 55 in 2012. Citing national security concerns, the House Appropriations Committee included an amendment in the recent Department of Agriculture-Food and Drug Administration spending bill that prohibits the purchase of agricultural land located in the United States by Chinese-owned companies. Citing the nonpartisan economic think-tank Paulson Institute, the American Security Institutereport underscores that "Chinese firms and investors own a controlling majority in nearly 2,400 U.S. Much of the rest of the debt is owned by individual investors, corporations, and other public entities. Greed Is Good or Is It? 5. China produces 97 percent of U.S. antibiotics and about 80 percent of active pharmaceutical ingredients used in American drugs, giving the Chinese Communist Party absolute controlof potentially life-saving medicine. The total has grown by an average 2.3 million acres per year since 2015, according to USDA data. Chart. Investopedia does not include all offers available in the marketplace. ", International Monetary Fund. On the state level, regulations vary. Chinese firms have expanded their presence in American agriculture over the last decade by snapping up farmland and purchasing major agribusinesses, like pork processing giant Smithfield Foods. To do that, China had to loosen its peg to the dollar. Learn more about how Statista can support your business. China's economic growth has slowed over the years. Of that, 195,000 acres, worth almost $2 billion when purchased, are. "Major Foreign Holders of Treasury Securities.". By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. However, they need renminbithe official currency of the People's Republic of Chinato pay their workers and accumulate money locally. House lawmakers recently advanced legislation to that effect, warning that Chinas presence in the American food system poses a national security risk. According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 7.03 trillion U.S. dollars in U.S. Treasury securities as of March 2021. How do I know if my stimulus was deposited? The other 189,000 acres were worth $235 million when purchased and are owned by 62 U.S. corporations with Chinese shareholders. America's farmland is owned by a variety of people and entities, including individuals, companies, and government bodies . Read our. "Federal Debt Held by Federal Reserve Banks. While lawmakers remain laser-focused on Chinese buyers, other nationals own much more agricultural property in the United States. Some U.S. lawmakers are pushing back amid the coronavirus fallout, which ignited an initial panic over concerns of critical medical shortages and Beijing's threats to withhold the needed goods. Walmart owns no shares. However, the US government estimates that Chinese-owned entities own approximately 7,000 acres of land in the US, which is a small fraction of the 2. . The post, which has been shared over 256,000 times as of April 14, is headlined with "read this before buying meat." "The hogs will still be raised here, but slaughtered and packaged for . Indeed, there has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade. World Gold Council. How Much Is the Per Capita Money Supply in the U.S.? ", Total number of residential properties bought by Canadian buyers in the U.S. 2010-22, Total property sales to foreign buyers in the U.S. 2010-2022, Share of Indian buyers of residential property in the U.S. 2011-2022, Total number of residential properties purchased by Indian buyers in the U.S. 2010-22. Crops beings harvested on an Iowa farm in 2018, Weak Oversight of Foreign Farmland Deals Sparks Concern Amid China Purchases, North Dakota Turns Against Chinese Corn Mill Project. Is it better to pay off credit card or pay down? Japanese-owned debt doesn't receive nearly as much negative attention as Chinese-owned debt, ostensibly because Japan is seen as a friendlier nation and the Japanese economy hasn't grown as fast as China's year after year. China has steadily accumulated U.S. Treasury securities over the last few decades. ), after gaining momentum seeded in farm states. The bill, which is yet to move through the House, would necessitate that "an issuer must make this certification if the Public Company Accounting Oversight Board is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the board. Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. US National Debt Clock: How Its Warning Affects You. Is Americas Debt to China Really So Bad? Additionally, China is seeking to build 5G networks in the United States and other Western countries, which could potentially feed personal information and sensitive data to the Chinese Communist Party. (July 18, 2022). 1 Canada (12.8 million acres) and even and the Cayman Islands (672,000). While many politicians like to angrily proclaim that China owns the United States because it owns so much of the U.S. debt, economists say that claim is far more rhetoric than fact. China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. China holds more than $1 trillion of the U.S. national debt. This amount is subject to market fluctuations. Quotes displayed in real-time or delayed by at least 15 minutes. While their market shares may be different percentages (Amazon owns 39% of all US ecommerce sales, while Alibaba owns 58.2% of all retail ecommerce shares in China), they each dominate their respective countries in which they began. The USDA could enforce the portion of the bill that bans Chinese-owned companies from participating in federal benefits programs, but constitutionally, land purchasing falls under states rights, and legislators have made no motions to change that. This statistic shows the total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2021. The government now provides affordable housing by subsidizing commercial housing purchases or by offering low-rent public (social) housing to middle- and low-income families. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Agricultural Land: Facts, Figures, and an Assessment of Real Threats, Brzezinski Chair in Global Security and Geostrategy, Diversity and Leadership in International Affairs Project, Energy Security and Climate Change Program, Media Relations Manager, External Relations. The ideal entry-level account for individual users. 6 Modern U.S. Presidents Who Raised the Debt Ceiling, Expansionary vs. At some price point, U.S. consumers would buy American products instead. By mid-2017, the total amount of official debt owed by the federal, state, and local governments was more than $19.8 trillion. Its a massive undertaking to verify who really owns [the land], Maxwell said. China needs this growth to raise its low standard of living. The United States owes China approximately $980.8 billion as of May 2022. Research Associate, Global Food Security Program. WH Groups shareholders include many large U.S.-based financial institutions.". You've successfully subscribed to this newsletter! China drew some headlines in 2013 and 2014 for buying up a lot of gold to store in its bank vaults, but the real safety net for the yuan is the worldwide belief in the dollar. These are especially vital not only for high-technology products such as smartphones and electric vehicles but for U.S. frontline weapons including the F-35 fighter, which requires 920 pounds of rare earth minerals. "He firmly believes that China, before the year [20]30, '35, is going to own America because autocracies can make quick decisions." The president did not elaborate on what was meant by "own. The money flowing into agricultural real estate from other countries also makes it difficult for new farmers in the U.S. to afford land as outside buyers bid up prices. Newt says China will 'dominate world' if tech theft isn't stopped, 'it's a matter of life and death', share data with Chinese communist spy agencies. division (technology), Legendary Entertainment Group (entertainment), Motorola Mobility (technology), Nexteer Automotive (automotive), Riot Games (entertainment), Smithfield Foods (food), Teledyne Continental Motors and Mattituck Services (aerospace), Terex Corp. (machinery), Triple H Coal (mining), Zonare Medical Systems (health care). Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed. That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. What Would Happen if China Were to Call In Its Debt? Chinese billionaire and businessman Wang. This drives China to accumulate U.S. dollars as foreign exchange (forex) reserves. How much of the USA is owned by China? Q4: What federal solutions are being discussed? Business Solutions including all features. This Treasury-led change makes it difficult to make long-term comparisons. 2023 Center for Strategic & International Studies. July 18, 2022. Please do not hesitate to contact me. It allows the U.S. Treasury to borrow more at low rates. of all foreign-owned land, cropland accounted for 29%, and pasture and other agricultural land for 22%. U.S. companies with Chinese shareholders more than doubled their acreage that year, accounting for 102,000 acres of the growth. Securities. The products are still made in the USA, but the decisions are made in China. to incorporate the statistic into your presentation at any time. Advocacy groups like the National Family Farm Coalition argue that the larger threat to national security is corporate capture of U.S. land resources, whether those corporations are U.S.- or foreign-owned. "Under President Trump, the U.S. was the first to recognize their nonstop deceits, and now the rest of the world has a clearer picture of China's ambition. That data also shows that the. That makes Chinese exports cheaper than American-made goods, increasing sales. Bill Gates owns almost as much U.S. agricultural land as China at 248,000 acres, according to The Land Report. At the same time, American consumers are assured of a steady flow of relatively inexpensive Chinese products and services. As a Premium user you get access to background information and details about the release of this statistic. Whether you're an American retiree or a Chinese bank, American debt is considered a sound investment. Although Congress has become increasingly concerned about Chinese land purchases, investors from China currently own only a small fraction of this land, at 191,652 acres (0.05 percent of the total). The extent of Chinese investment in recent years has also raised red flags around U.S. national security, particularly in the realm of rare earth minerals. Discover the current debt ceiling and its economic impact. This helps inflate the value of the dollar. Six states Hawaii, Iowa, Minnesota, Mississippi, North Dakota and Oklahoma currently ban foreign ownership of farmland. These are accounts dedicated to Social Security, Medicare, and other entitlements. Before June 2010, Treasury reports showed that China held about $843 billion in debt. Other top investors are American-based companies, including Vanguard Group Inc. Apple Inc USA is an American Company that was founded in Cupertino, California. ", United States Department of Treasury. And key Senate lawmakers have already shown interest in efforts to keep American farms in American hands. Then ownership jumped 30% from 2019 to 2020, from some 247,000 acres to roughly 352,000. This also reduces the purchasing power of Chinese earners. Are you interested in testing our business solutions? As a major function of its monetary policy, China's central bank, the Peoples Bank of China (PBOC), actively works to prevent this imbalance between the U.S. dollar and renminbi in local markets. You only have access to basic statistics. The NYFC also points to both urban and rural development as a threat to the future of U.S. farms, since converting farmland to other uses drives up prices and makes the land unaffordable for beginning farmers. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. The vast majority of this land is farmland, but the Chinese government and investors also own other kinds of real estate. Yes, this means that the government actually borrows money from itself to fund these and other entitlement programs. Continuing a trend that began early in 2021, China's portfolio of U.S. government debt in May dropped to $980.8 billion, according to Treasury Department data released Monday. These investments artificially increase the value of that land, which then denies young and beginning farmers opportunities to farm.. As Chinese investors buy up U.S. Treasury products, they help increase the value of the dollar. China holds the number two position, holding $980.8 billion of U.S. Treasurys3.2% of the total U.S. debt. Congress can then increase the federal spending that spurs U.S. economic growth. According to the data, the value of foreign-owned American assets climbed to $32.5 trillion in the second quarter, while total foreign assets held by. Of China's own top 500, 74 percent (370) were state-owned and state stock-holding enterprises, with assets of 27, 370 billion yuan and realizing profit of 266.3 billion yuan, representing 96.96 percent and 84.09 percent respectively of the top 500 corresponding values. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). Anyone anywhere can purchase shares of WH Group on the Hong Kong Stock Exchange. Of that, 195,000 acres, worth almost $2 billion when purchased, are owned by 85 Chinese investors, which could be individuals, companies or the government. "China's Currency Policy," Page 1. And while the U.S. grants China permission to buy its companies, China does not allow U.S. companies to operate the same way on their soil. It was revealed that just last year alone, China spent $6.1 billion dollars on housing in the U.S. making it America's top foreign buyer. 1616 Rhode Island Avenue, NW Some experts insist on adding hundreds of trillions in unfunded future liabilities on the federal government balance sheet. Manuel Balce Ceneta/AP Photo. "China's Gold Market: Progress and Prospects," Page 2. Billions of dollars flow into the U.S. from China every year. Get full access to all features within our Business Solutions. Though the magazine named him the largest private farmland owner in January 2021, the Microsoft founder came under fire in early 2022 when he was briefly barred from purchasing 2,100 acres of North Dakota farmland. If China called in all of its U.S. holdings, the U.S. dollar would depreciate, whereas the yuan would appreciate, making Chinese goods more expensive. Stephen Gandel. 24 with 420,000 acres, which forms the site of his suborbital spaceflight company, Blue Origin. Instead, Dollar Tree is a self-owned company that itself has acquired numerous national and regional competitors over the years, including Family Dollar and Dollar Bill$. Additionally, Walmart has never owned Dollar Tree and has no plans to acquire the business. "The first priority is to reclaim our critical supply chains so that we can become self-secure instead of reliant on the Chinese government,"Will Coggin, managing director of the American Security Institute, told Fox News. How Much Money Does the U.S. National Association of Realtors. Understanding the actual extent and impact of Americas debt to China requires a closer look at these massive amounts of money. Market data provided by Factset. As a result, the public does not have a complete picture of which foreign entities own how much U.S. farmland or what the land is being used for. Consequences of Owing Debt to the Chinese, Government Bond: What It Is, Types, Pros and Cons, Repurchase Agreement (Repo): Definition, Examples, and Risks, U.S. Debt Ceiling: Definition, History, Pros, Cons, Clashes, Debt-to-GDP Ratio: Formula and What It Can Tell You, Major Foreign Holders of Treasury Securities, Debt Position and Activity Report, June 2017, Debt Position and Activity Report, June 2022, Your Pension Is a Lie: There's $210 Trillion of Liabilities Our Government Can't Fulfill, Frequently Asked Questions About the Public Debt, China's Gold Market: Progress and Prospects, Federal Debt Held by Federal Reserve Banks. The remaining 38 percent is held by entities from almost a hundred other countries. While such purchases in low- and middle-income countries have been coveredextensively, they also happen here in the United States. China produces 97 percent of U.S. antibiotics and about 80 percent of active pharmaceutical ingredients used in American drugs, giving the Chinese Communist Party absolute control of. The House Bill is being reviewed by the Committee on Financial Services and the Committee on Agriculture. For example, Chinese pharmaceutical companies supply 70 percent of the world's acetaminophen, commonly used in Tylenol. "We National Debt or Federal Deficit? China acquired another 32,000 U.S. agricultural acres in 2021not as much as they scooped up in 2020, but 98% higher than their combined growth between 2015 and 2019. 2021 by the Center for Strategic and International Studies. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. The manufacturing of smartphones and other household items is heavily reliant on China, which controls most of the rare earth minerals that make those items work. Maxwell said that poses a big risk with an older generation of farmers set to exit the industry. "GDP Growth (Annual %) - Japan, China.". Japancommands the top spot among foreign creditors with $1.2 trillion4% of total U.S. debtowed by the U.S. government. Chinese lenders snap up so much of the U.S. debt for one basic economic reason: protecting its dollar-pegged yuan. If you are an admin, please authenticate by logging in again. ", The World Bank. China's economy would suffer along with everyone else's.