PrintPrint CiteCite
Style: MLAAPAChicago Close


China: Creditor to the Rich

Author: Brad W. Setser, Senior Fellow and Acting Director of the Maurice R. Greenberg Center for Geoeconomic Studies
January 8, 2009
China Security


China's government is now by far the largest creditor of the United States. Never before has a country as poor as China lent so much money to a country as rich as the United States. And never before has the United States relied so heavily on another country's government for financing.

China reports $1.9 trillion in foreign exchange reserves - roughly two times as much as Japan and four times as much as Russia or Saudi Arabia - the majority of which is denominated in US dollars. This total leaves out the $200 billion in "other foreign assets" that are on the balance sheets of the People's Bank of China, the $100 billion or so in foreign assets of China's sovereign wealth fund (the China Investment Corporation) and the roughly $150 billion in foreign assets managed by China's large state commercial banks. The foreign assets of China's government sum to at least $2.35 trillion - and could easily rise to around $2.5 trillion by the end of 2008. That works out to over 50 percent of China's GDP or roughly $2,000 per Chinese citizen.


View full text of article.

More on This Topic