More than $6 trillion of U.S. government debt is now owned by foreign interests, according to the most recent Treasury Department report on major foreign holders of the debt.
As of the end of June, foreign owners held $6,013,200,000,000 in U.S. Treasury securities, up from $5,976,500,000,000 as of the end of May, CNSNews.com reported.
Although the foreign-held U.S. government debt was $983,300,000,000 thirteen years ago and going through a downward trend for four consecutive months, it has grown more than six-fold since then. Out of the $6,013,200,000,000 held by foreign interests in U.S. government debt, $4,108,200,000,000 has been categorized by the Treasury as "foreign official" debt holdings---meaning it was owned by institutions controlled by foreign governments.
"Foreign official institutions," said the Treasury, "include the following: 1. Treasuries, including ministries of finance, or corresponding departments of national governments; central banks, including all departments thereof; stabilization funds, including official exchange control offices or other government exchange authorities; and diplomatic and consular establishments and other departments and agencies of national governments. 2. International and regional organizations. 3. Banks, corporations, or other agencies (including development banks and other institutions that are majority-owned by central governments) that are fiscal agents of national governments and perform activities similar to those of a treasury, central bank, stabilization fund, or exchange control authority."
As of the end of June, Mainland China ($1,268,400,000,000) held the largest share of the foreign-owned U.S. government debt through interests in U.S. Treasury securities. Japan (1,219,500,000,000), Belgium ($364,100,000,000), and "Caribbean Banking Centers" (Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, Panama, and the British Virgin Islands - $308,300,000,000) took the next three spots in holding U.S. interests.
"As of the end of June, the Federal Reserve owned $2,396,972,000,000 in U.S. Treasury securities. Together, the $6,013,200,000,000 in U.S. Treasury securities owned by foreign interests and the $2,396,972,000,000 owned by the Federal Reserve equaled $8,410,172,000,000 in U.S. government debt," according to CNSNews.com "That was about 67 percent of the $12,572,219,622,017.57 in U.S. government debt 'held by the public,' which includes debt borrowed from individuals, corporations and foreign and domestic government entities outside of the federal government itself."
Meanwhile, the U.S. government has repeatedly made efforts to reassure the government of the People's Republic of China that Chinese holdings on U.S. government debt is a good investment, according to a 2013 Congressional Research Service report.
"Since the beginning of the global financial crisis in 2008, U.S. government officials have increasingly sought to offer assurances to Chinese officials regarding the safety of China's holdings of U.S. government debt securities and to encourage China to continue to purchase U.S. securities," said the CRS report. "For example, during her first visit to China on February 21, 2009, (then) Secretary of State Hillary Rodham Clinton was quoted as saying that she appreciated 'greatly the Chinese government's continuing confidence in the United States Treasuries,' and she urged the government to continue to buy U.S. debt."
"However on March 13, 2009, (then) Chinese Premier Wen Jiabao at a news conference stated: 'We've lent a huge amount of capital to the United States, and of course we're concerned about the security of our assets. And to speak truthfully, I am a little bit worried. I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets," the CRS report continued.
"The U.S. debt issue was a major topic during Vice President Joe Biden's trip to China in August 2011," said the CRS report. "At a meeting with Chinese Premier Wen Jiabao on August 19, 2011, Vice President Biden stated that 'we appreciate and welcome your concluding that the United States is such a safe haven because we appreciate your investment in U.S. treasuries. And very sincerely, I want to make clear that you have nothing to worry about in terms of their-their viability.'"
