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.