Who is Holding US Debt and Why is it Important?

There is a total of $8.1 trillion of debt in Treasury bills, notes, and bonds that are currently held by other countries with Japan currently topping the list. The remaining of the total $31 trillion US national debt is held by the US population and US government.

Key Takeaways:

• China is the second largest holder of US debt currently holding around $870 million. 

• Before 2022, China held more than $1 trillion of US debt every year since 2010 until the US Department of Treasury changed how they measure debt.

• In recent times, China’s economic growth has slowed down which has caused them to invest less in the US Treasury as the number of their exports has decreased overtime.

• China’s position holding a significant amount of US debt gives them some political leverage. 

• US interest rates could skyrocket along with slowed economic growth if China were to call in its debt. 

To read more about China’s US debt strategy and what it means, check out this article.