Thursday, December 15, 2011

Chinese Holdings of US Treasuries

TIC data released today showed that in October, China was still the largest foreign holder of US treasuries.  Today, the US government owes the Chinese people $1.13T.  This is actually down from the same period last year when the Chinese government owned $1.16T worth of treasuries.  Typically there is a revision to this number at the end of the year though, which means that the Chinese have likely continued to accumulate treasuries.

The pace of accumulation by the Chinese has been staggering since 2000.  At the turn of the century, the Chinese owned just $60B worth of treasuries.  The Chinese have increased these holdings by roughly 30% per year for the last 11 years.

China's GDP was $5.88T in 2010, which means that it holds almost 19% of its annual GDP in US treasury bonds.

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