Infographic: The Countries Most in Debt to China (2024)

FAQs

Which countries are most in debt to China? ›

China and the US remain two of the leading countries with the highest debt-to-GDP ratios. Emerging economies and low-income economies are the most affected by debt vulnerabilities.

[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).

Key Takeaways. China invests heavily in U.S. Treasury bonds to keep its export prices lower. China focuses on export-led growth to help generate jobs. To keep its export prices low, China must keep the renminbi low compared to the U.S. dollar.

1. Luxembourg. Luxembourg is popular for its castles and beautiful countryside; its cultural festivals are one of its specialities. Luxembourg is situated in the heart of Europe and is the nation of 670000 residents.

In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.

China is in the midst of a profound economic crisis. Growth rates are flagging as an unsustainable mountain of debt piles up; China's debt-to-GDP ratio reached a record 288% in 2023.

A neologism, the term was first coined by Indian academic Brahma Chellaney in 2017 to contend that the Chinese government lends and then leverages the debt burden of smaller countries for geopolitical ends.

A sizeable sell-off of Treasury securities by China would almost certainly lead to an appreciation of China's currency and depreciation of the dollar. This is more likely to help the United States than to hurt us, contrary to the claims of many observers.

What would happen if the US stopped trading with China? ›

The costs to the U.S. economy if we were to prohibit domestic companies (impacting companies such as GE, Honeywell, Collins, and Parker Aerospace) from engaging with COMAC would be significant: The U.S. Chamber of Commerce estimates that losing access to China's aviation market would translate into a loss of $38 ...

China owns 384,000 acres of American agricultural land. That's a 30% increase just since 2019. And on top of that, they own land near an air force base in North Dakota.

But most of Japan's debt is owned by domestic investors. The country's external position is bolstered by a large current account surplus and foreign exchange reserves worth more than $1 trillion. At the end of last year, Japan's overseas assets were around 84% of its annual economic output.

On the other hand, Mexico holds about $34B of US debt. So if we were to make a balance, Mexico owes the US $134B, more or less, or about 8% of what it makes in a year. The United States has a services trade surplus of an estimated $8.8 billion with Mexico in 2018, up 19.1% from 2017.

India takes the top spot. The world's most populous country owed $38.3bn to the WB at the end of 2022, down by almost $1.5bn from a year earlier. India's outstanding balance is almost double that of the next biggest debtor, Indonesia, with $20.6bn.

We then estimate that China's total nonfinancial sector debt amounted to 235.1% of GDP, a high level relative to other emerging markets, among which public sector debt was 53.2% of GDP while private sector debt amounted to 181.9% of GDP.