2013-10-30 What does the US debt Mean to China? 
    2013-10-29 17:18:49     CRIENGLISH.com         Web Editor: Chen Cong

China is the world's biggest holder of US sovereign debt. Part of the usefulness of holding US sovereign debt is its perceived reliability. However, despite promises from the US government, US government debt has grown constantly, and earlier this month we saw a US government shutdown during a fierce political debate over the US debt ceiling. Although the US government did not default on its debts, the incident was of great concern to the many countries who own US debt.

China owns at least 1.27 trillion dollars worth of US treasury securities, or government bonds. These are packages of US government debt, which can potentially be sold on to secondary buyers. The real value of the bonds therefore depends on the perceived level of likelihood that the US government will repay their debts.

Another reason why so many countries purchase US dollars is the dollar's status as the preeminent currency for world trade. As the RMB becomes more widely used internationally, China will have less of a need for US dollars, although experts agree that the RMB is many years away from the achieving the same level of international prominence as the US dollar.

So what do experts think are the economic implications of China owning so much US national debt? Will, or should, China's investment in US treasury securities change in the future?

Ni hao, you're listening to   People In the Know, bringing you insights into the headlines in China, and around the world, I'm Zheng Chenguang in Beijing.

Nathan Wakelin-King speaks to Professor Jeffrey Frankel, professor of Capital Formation and Growth at Harvard University's Kennedy School of Government, and Dr Jin Keyu, assistant professor in economics at the London School of Economics.


CRIENGLISH.com claims the copyright of all material and information produced originally by our staff. No person, organization and/or company shall reproduce, disseminate or broadcast the content in any manner whatsoever without the express written permission of CRIENGLISH.com.

CRIENGLISH.com holds neither liability nor responsibility for materials attributed to any other source. Such information is provided as reportage and dissemination of information but does not necessarily reflect the opinion of or endorsement by CRI.

Hourly News more

The Beijing Hour more
The Beijing Hour updated 20:00 2014/05/23
Micro-blog: weibo.com/beijinghour

Highlights more

People In The Know more
2016-04-11 China and Canada: Closer Bilateral Ties Expected 
In this edition of program, we are joined by a Chinese-Canadian senator and a Canadian professor to take a look at the ties between China and Canada.
2016-04-08 Energy Security in Asia 
In this edition of program, we are joined by a scholar and a businessman to take a look at energy security in Asia?

Talk to CRI

The Sound Stage
China Revealed
My Chinese Life
Photo Gallery
Learn Chinese
"In" Chinese
Chatting in Chinese
Pop Culture
Traditional Culture
Living Chinese
Chinese Studio
Chinese Class
Learn English
Special English
Pop Chart
Everyday English
Fabulous Snaps
CRI News
China.org.cn  | Xinhua  | People's Daily Online   |  CNTV.cn  | China Daily  |  Global Times  | China Job  |  China Tibet Online  | Taiwan.cn  | eBeijing  | Beijing Today  | China-Eurasia Expo  | APEC Yiwu Conference  | Chinese Embassy in S.Africa  | Chinese Embassy in Australia  | Chinese Embassy in NZ