(Reuters) SHANGHAI, Dec 30 (Reuters) As Beijing implements a proactive approach to maintain economic development, China expects to issue a record number of treasury bonds in 2022, while keeping overall interest rates lower, according to a senior official at the finance ministry.
What percentage of US bonds does China own?
Holders of US Treasury debt from other countries Japan and the Mainland have 7.55 trillion dollars of the total 7.55 trillion held by foreign countries. China was in charge of the most. China owned $1.05 trillion in US equities.
Is China selling US government bonds?
In June, China reduced its holdings of US Treasury notes for the fourth month in a row, to the lowest level since October 2020, in what analysts describe as an attempt to mitigate the negative impact of rising China-US tensions.
What if China demanded payment on the US debt?
If China were to default on its debt, it would gradually sell off its Treasury assets. Dollar demand would fall, even if it did so slowly. By rising the yuan’s value against the dollar, this would damage China’s competitiveness. Consumers in the United States would like to buy American items at a certain price point. China could only begin this procedure after increasing local demand and expanding its exports to other Asian countries.
What would happen if the United States stopped doing business with China?
- If the US sells half of its direct investment in China, it might lose up to $500 billion in one-time GDP. In addition, capital gains of $25 billion per year would be lost by American investors.
- If Chinese tourist and education spending falls to half of what it was before the coronavirus outbreak, $15 billion to $30 billion in annual export services trade will be lost.
The 92-page report was started in 2019, before the coronavirus outbreak wreaked havoc on the global economy.
Tensions between the United States and China have risen in the last three years as a result of former President Donald Trump’s policies. Long-standing complaints about China’s lack of intellectual property rights, forced technology transfers, and considerable role of the state in commercial operations were addressed by his administration through tariffs, sanctions, and increased inspection of cross-border financial flows.
Is China the exclusive owner of the United States?
The United States’ wealth has primarily been founded on two pillars: low-cost land and high-cost labor. Until Ted Kennedy’s 1965 Immigration Act, Ronald Reagan’s 1986 Amnesty, and NAFTA opened the floodgates to Third World immigration (both legal and illegal), this formula remained mostly unchanged.
When there was a labor shortage, firms had little choice but to pay more rather than importing vast volumes of inexpensive labor from nations with few worker safeguards.
The same regulations that have allowed for a tremendous infusion of low-cost labor have also destabilized the American real estate market: more buyers means more demand, which means higher pricing for those trying to purchase a property.
There are a number of societal ramifications of this, the most important of which is that family formation is more expensive and hence less accessible for the ordinary young American worker in the twenty-first century than it was previously.
But there’s also the issue of permitting foreign nationals to own real estate in the United States, which is illegal in a number of countries. Where foreign nationals are permitted to own real estate, there are frequently limitations on where they can purchase and how much they can possess.
We don’t think it’s necessary to explain why, but we’ll do it anyway: First and foremost, a nation’s citizens have first claim to its territory. Second, allowing too much of a country’s land to fall into the hands of foreigners can be dangerous.
Foreign investors currently possess 30 million acres of farmland in the United States, accounting for 2.2 percent of all farmland in the country. To put that in perspective, that’s about the size of Mississippi or Pennsylvania. These are effectively absentee landlords who own some of America’s most valuable real estate.
China, on the other hand, held 191,000 acres worth $1.9 billion in 2019. Although this may not appear to be a significant amount, Chinese ownership of American agriculture has increased considerably in the previous decade. Indeed, in less than a decade, Chinese ownership of farmland in the United States has increased tenfold.
Foreign ownership of farmland is currently prohibited in six states: Hawaii, Iowa, Minnesota, Mississippi, North Dakota, and Oklahoma.
Massive Chinese farmland investment is concerning for one clear reason: it places the nation’s food security in the hands of a hostile foreign power. However, there is a social cost to permitting foreign purchasers with essentially unlimited resources to compete with smaller domestic buyers on the real estate market.
It’s understandable if no one in this room is crying for Big Aggie, but the true losers are the smaller landowners. For people concerned about environmental issues, consider if American farmers or Chinese bureaucrats thousands of kilometers away are more likely to conduct proper land stewardship.
In 2020, how much land does China hold in the United States?
“America cannot allow China to control our food supply,” Pence said in an address to the Heritage Foundation on Wednesday, pushing President Joe Biden and Congress to “stop all agriculture subsidies for foreign nationals’ land.”
Over the previous decade, Chinese companies have increased their footprint in American agriculture by purchasing farmland and big agribusinesses, such as pork processor Smithfield Foods. According to the Agriculture Department, Chinese owners owned around 192,000 agricultural acres in the United States valued $1.9 billion by the start of 2020, including land used for farming, ranching, and forestry.
Still, that’s less than farmland owned by people in other countries, such as Canada and Europe, which each have millions of acres. It’s also a minor portion of the over 900 million acres of total agriculture in the United States.
However, lawmakers are concerned about the rising pattern of transactions and the buyers’ possible ties to the Chinese government.
China’s agricultural investments in foreign countries have increased more than tenfold since 2009, according to the USDA. As part of its “One Belt, One Road” economic development ambitions, the Communist Party has actively pushed investments in foreign agribusiness, with the goal of controlling a larger portion of China’s food supply chain.
During a recent House Appropriations hearing, Rep. Dan Newhouse (R-Washington) cautioned that “the current trajectory in the United States is moving us toward the creation of a Chinese-owned agricultural land monopoly.”
Newhouse’s amendment to the Agriculture-FDA spending bill (H.R. 4356 (117)) was unexpectedly adopted by the committee, which would prohibit any new agricultural purchases by companies controlled entirely or partially by the Chinese government and prevent Chinese-owned farms from accessing federal support programs.
That decision came after a heated debate over the implications for Asian Americans if Congress passed a provision directed squarely at China. Rep. Grace Meng (D-NY) argued that if the amendment was about national security, foreign purchases should be subjected to the same limitations. At the markup, Meng argued, “It would reinforce already rising anti-Asian hatred.”
However, Meng, Newhouse, and committee leaders indicated that a solution would be found as the bill progressed through Congress. Although the Senate has not yet prepared its own version of the spending bill, it is expected to reach the House floor before the end of July as part of a larger appropriations package.
Rep. Sanford Bishop (D-Ga.), chair of the farm appropriations subcommittee, remarked, “We are fresh in this process.” “I propose that we get down and work through it so that we can achieve our goal, but in a way that is respectful of all those who may be upset by the approach.”
After meatpacking giants like the U.S. affiliate of Brazilian-owned JBS got millions of dollars under the Trump administration’s trade bailout starting in 2018, scrutiny of foreign-owned agricultural operations receiving public subsidies has risen in recent years.
Smithfield was also set to get funds from the program, which was established to assist American farmers who were being harmed by trade reprisal from China and other competitors. However, following an outcry from senators led by Sen. Chuck Grassley, the business dropped out of its USDA contract (R-Iowa).
The renewed focus on limiting foreign agricultural acquisitions comes as Biden and Agriculture Secretary Tom Vilsack announce a number of steps to help the food supply chain recover from the pandemic’s massive disruptions.
What is China’s debt to the United States?
Over the previous few decades, China has steadily increased its holdings of US Treasury securities. The Asian nation owns $1.065 trillion, or 3.68 percent, of the $28.9 trillion US national debt, more than any other foreign entity save Japan as of October 2021.
What enterprises in the United States does China own?
Chinese Investors Owned American Businesses You Didn’t Know About
- AMC. AMC, or American Multi-Cinema, is a popular movie theater chain based in Leawood, Kansas, that has been active for over a century.