Friday, April 17, 2015
Japan is now the biggest holder of US Debt, surpassing China
China is no longer the biggest holder of U.S. Treasury debt, a position it has held for over 6 years. There are two components to this change. First, Japan has been consistently buying a lot of bonds in the past couple of years, and second, China's waning economic growth has correlated with less U.S. bond purchases.
As Matthew Yglesias from Vox points out, there's been a lot of media buzz about the U.S.'s big debt to China, and our resultant economic dependency on them. However, he also explains that that debt exists not because the U.S. Treasury is in dire need of more money, but because countries like China and Japan want to buy in; it's safe investment, and for countries who do so much export trade with the U.S., cycling the money around is good for growth.
Do you think the debt to China something to be worried about? Otherwise, is there something to be said about the state of Japan and China's respective economies by the stats and patterns from above?