With most forms of U.S. debt, like Treasury bills, redeemable in U.S. dollars, worldwide trust in the dollar and the U.S. economy, in general, remains Chinas main safeguard for the yuan. Federal Reserve Bank of St. Louis. What's the Difference? By mid-2017, the total amount of official debt owed by the federal, state, and local governments was more than $19.8 trillion. Office of the Historian. By the start of 2020, Chinese owners controlled about 192,000 agricultural acres in the U.S., worth $1.9 billion, including land used for farming, ranching and forestry, according to the Agriculture Department. Powered and implemented by FactSet Digital Solutions. Includes buyers from the People's Republic of China, Hong Kong and Taiwan. According to USDA data, foreign investors owned at least 35.2 million acres of U.S. agricultural land in 20192.7 percent of U.S. farmland, an area almost the size of Iowa. Is Americas Debt to China Really So Bad? "How Much U.S. Debt Does China Really Own?" 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. What is the highest credit limit for Chase Sapphire? 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. ", U.S. Department of the Treasury. The rest of the $29 trillion national debt is owned by either people in the U.S. or by the U.S. government itself. The USDA reports that the changes in pasture and crop land holdings since 2009 were mostly due to foreign-owned wind companies signing or terminating long-term leases. 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. | You only have access to basic statistics. A government bond is issued by a government at the federal, state, or local level to raise debt capital. Well, really, the hallmark has been an almost otherworldly disconnection from the actual affairs of the United States. "The number is very difficult to gauge correctly due to complicated ownership structures that the Chinese sometimes employ. These are accounts dedicated to Social Security, Medicare, and other entitlements. The first and most important is that China wants its currency, the yuan, pegged to the dollar. Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. World Gold Council. U.S.-based companies also own over nine million acres in other countries. Treasury securities are freely traded around the world. Policymakers should, instead, consider the many threats facing the future of the U.S. food system and ensure that current and aspiring farmers have the resources they need to secure long-term U.S. food production, starting with access to affordable farmland. The average American is made better off by foreigners providing inexpensive services and only demanding pieces of paper in return. The debate over farm ownership comes amid broader efforts by Congress and the Biden administration to curb the nations economic reliance on China, especially in key industries like food, semiconductors and minerals deemed crucial to the supply chain. The greatest share is in Texas, with over 4.4 million acres, followed by Maine (3.3 million acres) and Alabama (1.8 million acres). But, exactly how much does the nation own? The committee unexpectedly adopted Newhouses amendment to the Agriculture-FDA spending bill (H.R. That effort includes greater scrutiny of large meat processing companies like JBS and Smithfield, as well as plans to tighten the requirements for meat to be labeled a Product of the USA.. 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 . And Human Rights Watch has written that China is an'existential threat' to human rights." However, the items are Manufactured and Assembled in China, with Foxconn, a Taiwanese-based firm, producing the majority of Apple's products. For these reasons, we'll likely see China remain one of the world's largest holders of U.S. national debt. Since this strategy is dependent on exportsover $ 452.58 billion of which went to the U.S. in 2020China needs ever-more renminbi to continue to have a lower currency exchange rate than the U.S. dollar, and thus offer cheaper prices for the products it exports. 18, far behind No. While such purchases in low- and middle-income countries have been coveredextensively, they also happen here in the United States. USDA reported in 2018 that Chinas agricultural investments in other nations had grown more than tenfold since 2009. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. Its three main sites Taobao, Tmall and Alibaba.com have hundreds of millions of users, and host millions of merchants and businesses. It has opened yuan trading centers in London and Frankfurt. More recently, U.S. authorities have discovered China is funding American university researchers, who don't always disclose those contributions. And its findings may be surprising to some. Douglas R. Bush, Deterring a Cross-Strait Conflict: Beijing's Assessment of Evolving U.S. Strategy, Rethinking Humanitarian Aid: A Conversation with Michelle Nunn, President and CEO of CARE USA, Foreign Purchases of U.S. 1616 Rhode Island Avenue, NW Profit from the additional features of your individual account. This intervention by the PBOC results in scarcity of U.S. dollars, which inflates their exchange rates. At the same time, it relies on the private commercial housing market to meet the needs of higher-income groups. Most states, like Texas and Maine, have no restrictions on foreign ownership of land, contributing to the large amount of farmland that is under foreign control in these states. Of the $30.5 trillion in government debts, more than $6 trillion is owned by the federal government in trust funds. The Chinese spy balloon shot down February 4 increased worries that foreign governments could use U.S. land for espionage efforts, reports the Journal. The largest holder of U.S. debt is the United States government. Indeed, there has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade. China holds more than $1 trillion of the U.S. national debt. These include white papers, government data, original reporting, and interviews with industry experts. 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. The Senate Bill is being reviewed by the Committee on Banking, Housing and Urban Affairs. Center for Strategic and International Studies With the U.S. dollar considered one of the safest and most stable currencies in the world, dollar-pegging helps the Chinese government maintain the stability and value of the yuan. 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. Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed. 24 with 420,000 acres, which forms the site of his suborbital spaceflight company, Blue Origin. 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. Alibaba handles more business than any other e-commerce company. ", 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. Yes, this means that the government actually borrows money from itself to fund these and other entitlement programs. It's more of a novelty day like Valentine's Day, rather than a religious celebration. Secondly, China needs American markets to buy their exported goods. All rights reserved. Foreign investors by the end of 2019 held an interest in more than 35 million acres an area bigger than New York State. Near a 10,000-acre hay farm run by a Saudi subsidiary, local residents say their wells are going dry. As a Premium user you get access to background information and details about the release of this statistic. How Much Money Does the U.S. IOUs are formed and financed through joint efforts of the U.S. Department of the Treasury and the Federal Reserve. But Meng, Newhouse and committee leaders indicated they would find a solution as the legislation winds through Congress. Dalian Wanda purchased a majority stake in AMC for $2.6 billion, making AMC the largest theater operator at the time, according to a report from Reuters. China is taking steps to make its currency, the yuan, transition to a global currency. Please create an employee account to be able to mark statistics as favorites. The Communist Party has actively supported investments in foreign agriculture as part of its One Belt One Road economic development plans, aiming to control a greater piece of Chinas food supply chain. Foreign ownership of U.S. agricultural land doubled from 2009 to 2019, according to U.S. Department of Agriculture (USDA) records, and policymakers have become increasingly concerned about foreign control of the U.S. food supply. Much of the rest of the debt is owned by individual investors, corporations, and other public entities. China and investors tied to the CCP own just shy of 200,000 acres of various types of land in the United States. 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. WH Group is a publicly-traded company with shareholders around the world. United States Treasury Fiscal Data. Appliances (technology), IBMP.C. Rep. Grace Meng (D-N.Y.) said that if the amendment was about national security, buyers from other countries should also face similar restrictions. Countries with lower currency values export more, since their products cost less when sold in foreign countries. https://www.thoughtco.com/how-much-debt-does-china-own-3321769 (accessed March 4, 2023). Agricultural Land. Investopedia does not include all offers available in the marketplace. If China ever did call in its debt, it slowly would begin selling off its Treasury holdings. Owe China? Artificially suppressing the yuan has made it difficult for a growing Chinese middle class; so, exports are needed to keep businesses running. That makes Chinese exports cheaper than American-made goods, increasing sales. According to the International Monetary Fund (IMF), the only nation with no national debt is Macao SAR. In simpler terms, the government wrote itself a really big IOU and bankrupted one account to finance another activity. The last significant increase in acres occurred between 2012 and 2013 . Quote and Meaning, What Was the Eisenhower Doctrine? The total has grown by an average 2.3 million acres per year since 2015, according to USDA data. If you are an admin, please authenticate by logging in again. statistic alerts) please log in with your personal account. Longley, Robert. Data cover both foreign-owned (29.1 million acres) and U.S. That's a decline of. Former Vice President Mike Pence speaks during an event. Among all of those foreign creditors to which America owes money, China led the way at $1.17 trillion, followed by Japan, at $1.07 trillion as of January 2018. Haier bought GE for $5.4 billion, a recording breaking sum at that time. A3: The only federal law governing these transactions is the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978. How much of the USA is owned by China? "The Chinese have a strong foothold here in the U.S., and Chinese firms have access to what seems like infinite government lending, and because the country's goal of world dominance is ingrained into the minds of their business leaders," explained Paul Murad, president of Nevada-based real estate firm Metroplex. by Jamie Lutz AMC. Manuel Balce Ceneta/AP Photo. Popular cinema company AMC, short for American Multi-Cinema, has been around for over a century and is headquartered in Leawood, KS. They use different business structures to further conceal it.. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. The US National Debt and How It Affects You. This statistic shows the total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2021. Longley, Robert. Bill Gates owns almost as much U.S. agricultural land as China at 248,000 acres, according to The Land Report. A1: USDA records provide the best source of information on foreign-held agricultural land, although they are still incomplete and contain many errors (as explained in A3 below). In addition, the U.S. Treasury Department has a proven track record of being able to find new creditors very quickly when needed. 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. Anyone anywhere can purchase shares of WH Group on the Hong Kong Stock Exchange. 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. . 2023 FOX News Network, LLC. (2021, September 2). US PHARMACEUTICAL INDUSTRY AIMS TO WREST SOME DRUG PRODUCTION BACK FROM CHINA. 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. How can I increase my credit score by 25 points? 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 . However, the full extent of the Chinese investment as it stands in the U.S. today is far from transparent. 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). Interest on the National Debt and How It Affects You, US Debt by President: By Dollar and Percentage, US Budget Deficit by Year Compared to GDP, the National Debt, and Events, Chinas Economic Slowdown and How It Affects You, China's Economy and Its Effect on the U.S. Economy, China's Currency, the Yuan, and How It Affects You, How the Yuan Could Become a Global Currency, Debt Ceiling Dictionary: Your Guide to the Jargon, Major Foreign Holders of Treasury Securities, Report on Foreign Portfolio Holdings of U.S. Securities, Major Foreign Holders of Treasury Securities [2000-2020], Chinas Economic Rise: History, Trends, Challenges, and Implications for the United States. 5. They hold 50% of total shares through Walton Enterprises LLC and Walton Family Holdings Trust. Individuals can buy and sell U.S. debt, as can central banks for countries like China. Many large corporations, pension funds, and wealthy individuals are investing in agricultural land in the United States and abroad. Are you interested in testing our business solutions? Smithfield is vertically integrated and owns all aspects of its supply chain, meaning that WH Group now controls a significant portion of U.S. pork production and revenue in addition to farmland. 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. Hilton Hotels Since 1919, Hilton has become a household name throughout the U.S. and other countries. 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. By the start of 2020, Chinese owners controlled about 192,000 agricultural acres in the U.S., worth $1.9 billion, including land used for farming, ranching and forestry, according to the Agriculture Department. Quotes displayed in real-time or delayed by at least 15 minutes. Times Square billboard endeavors to warn of creeping Chinese influence. The Global Food Security Program would also like to thank Aliza Lauter for her research contributions to this publication. That made the yuan more attractive to forex traders in global markets. The USDA claims that its goal is to monitor foreign ownership of land, not to exact penalties. Why China Buys U.S. Debt With Treasury Bonds, A Look at National Debt and Government Bonds, National Debt: Definition, Impact, Key Drivers, Current U.S. Debt, 2020 Election: The Key Economic Issues Explained. Owning U.S. Treasury notes helps China's economy grow. "How Much U.S. Debt Does China Really Own?" Greed Is Good or Is It? The real question is: How much of the totalU.S. debtdoes the U.S.federal governmentowe to Chinese lenders? According to USDA data, foreign investors owned at least 35.2 million acres of U.S. agricultural land in 20192.7 percent of U.S. farmland, an area almost the size of Iowa. Its also a small percentage of the nearly 900 million acres of total American farmland. When the pandemic hit, Smithfield increased pork exports to China even as the United States experienced widespread meat shortages due to supply chain disruptions and Smithfield closed some of its plants due to poor working conditions. Defining Alibaba Alibaba is China's and by some measures, the world's biggest online commerce company. That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. Q5: What is the real threat to U.S. food security? For long-term U.S. food security, perhaps the larger concern is why up-and-coming U.S. farmers are unable to buy the land they need. As a Premium user you get access to the detailed source references and background information about this statistic. This series of events prompted Congress to look at how to prevent Chinese ownership in U.S. agriculture, even though other foreign entities, like Brazilian-owned JBS, control similarly large portions of U.S. food supply chains. The vast majority of this land is farmland, but the Chinese government and investors also own other kinds of real estate. As Chinese investors buy up U.S. Treasury products, they help increase the value of the dollar. A4: Since the 2013 purchase of Smithfield Foods, multiple bills have been proposed to provide more oversight of foreign investments in U.S. agricultural companies (including in 2017 and 2020), but until recently they each died in committee. Gates continues to deny any plot, telling Reddit users in January that he owns less than one four-thousandths of U.S. farmland and invests in farms to improve their production and create jobs. 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. And if you measure it by gross domestic product (GDP) and consider purchasing power parity (PPP), China is seen as the worlds largest economy. "Debt Position and Activity Report, June 2017," Page 1. This includes the Federal Reserve, which already owns six times as much debt as China. China also is liberalizing its control of the yuan, also called the "renminbi." U.S. consumers benefit from low consumer prices. Its allowed the yuan to trade in a wider trading range around a basket of currencies that include the dollar. Indeed, there has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade. While some states have strict laws in place, others are more open to foreign investments. At some price point, U.S. consumers would buy American products instead. Walmart does not own Dollar Tree as of 2022. The source adds the following information: "estimates from 2010 thru 2015 include some commercial transactions. It's politically popular to say that the Chinese "own the United States" because they are such a huge creditor. Learn more about how Statista can support your business. 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. ), after gaining momentum seeded in farm states. But some analysts believe the ongoing crisis lays bare the inroads China has made on U.S. soil. Nonagricultural land (such as homesteads and roads) accounted for 2%. How much of Chinese industry is state-owned? In fact, research firm Gartner revealed last year that a third of supply chain leaders had plans to move at least some of their manufacturing out of China before 2023. Arizona, for instance, has no rules on groundwater pumping as long as it is for a beneficial use, which includes agriculture even if the products are shipped elsewhere. China holds the number two position, holding $980.8 billion of U.S. Treasurys3.2% of the total U.S. debt. 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. As it is not known exactly how much US land is owned by China. Should the PBOC stop interfering, most economists agree that the renminbi would self-correct and appreciate in value, thus making Chinese exports more expensive. National Association of Realtors. In a vicious cycle, they sell the U.S. dollars they receive through exports to get renminbi, which increases the supply of U.S. dollars and raises the demand for renminbi, to the point that the renminbi ranked as the eighth most traded currency in the world as of 2019. In return, American consumers get cheap Chinese products and incoming investment capital. The data is entirely reliant on self-reporting, and the USDA does not check it for completeness and accuracy, so there are frequent typos, omissions, and outdated information.
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