Amanda Jackson has expertise in personal finance, investing, and social services. Walmart Inc. is the largest retailer in the world and one of the five largest corporations in the world by sales. The Netherlands is the second largest foreign owner with 4.6 million acres. "He firmly believes that China, before the year [20]30, '35, is going to own America because autocracies can make quick decisions." The president did not elaborate on what was meant by "own. National Association of Realtors. The manufacturing of smartphones and other household items is heavily reliant on China, which controls most of the rare earth minerals that make those items work. Its three main sites Taobao, Tmall and Alibaba.com have hundreds of millions of users, and host millions of merchants and businesses. Dalian Wanda purchased a majority stake in AMC for $2.6 billion, making AMC the largest theater operator at the time, according to a report from Reuters. Use Ask Statista Research Service. These are accounts dedicated to Social Security, Medicare, and other entitlements. As a presidential candidate in 2019, Warren said she would support a national version of Iowas law along with safeguards against foreign investors using fake American buyers to circumvent the rules. Q3: What regulations are currently in place? Artificially suppressing the yuan has made it difficult for a growing Chinese middle class; so, exports are needed to keep businesses running. That data also shows that the approximately 190,000 acres of farmland owned by Chinese interests has remained virtually unchanged since 2013. The . Concern about Chinese purchases of U.S. agricultural land increased in late January when the China-based Fufeng Group Ltd. was prevented from building a cornmill on land close to a North Dakota Air Force base after officials called it a security risk. Along similar lines, climate-related efforts to increase biofuel production and expand afforestation and reforestation could reduce the amount of land available for food production in the future. Weak Oversight of Foreign Farmland Deals Sparks Concern Amid China Purchases (WSJ), North Dakota Turns Against Chinese Corn Mill Project (WSJ). "Chinese companies have been carrying out unchecked reverse mergers for years now, and the media (influence) has been going under the radar for years now," Murad added. Treasury securities are freely traded around the world. Photo: GUILLAUME SOUVANT/AFP via Getty Images, Critical Questions According to the data, the value of foreign-owned American assets climbed to $32.5 trillion in the second quarter, while total foreign assets held by. This drives China to accumulate U.S. dollars as foreign exchange (forex) reserves. China's low-cost competitive strategy seems to be working. Among all of those foreign creditors to which America owes money, China led the way at $1.17 trillion, followed by Japan, at $1.07 trillion as of January 2018. U.S . Times Square billboard endeavors to warn of creeping Chinese influence. Is Americas Debt to China Really So Bad? The Pentagon released a list of 20 companies that it says are owned or controlled by Communist China's military and operate in the US - including tech giant Huawei, according to a report. by Jamie Lutz Angela Huffman is a sixth-generation farmer in Wyandot County, which, along with Paulding County, has more than 41,000 acres of foreign-owned farmland. That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. Many Americans find the brand appealing because it has a "Made in America" stamp on its products, however, the company has been owned by Chinese company Haier since 2016. Does paying off all debt increase credit score? It could be bigger," he surmised. These are especially vital not only for high-technology products such as smartphones and electric vehicles but for U.S. frontline weapons including the F-35 fighter, which requires 920 pounds of rare earth minerals. No, China does not own Walmart. How Much U.S. Debt Does China Really Own? More than 200 foreign firms mostly Chinese with a combined market capitalization of almost $2 trillion are said to not be meeting this standard; so their stocks are traded, but U.S. investors have limited insight into what is going on internally with the companies. "Report on Foreign Portfolio Holdings of U.S. China Daily, which is controlled by the Chinese Communist Party, has paid more than $4.6 million to The Washington Post and . Jamie Lutzisaresearchassociatewiththe Global Food Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Caitlin Welsh is the director of the CSIS Global Food Security Program. On the state level, regulations vary. This intervention by the PBOC results in scarcity of U.S. dollars, which inflates their exchange rates. "In 2017, the United States produced zero rare earth minerals. Alibaba handles more business than any other e-commerce company. "Chinas Economic Rise: History, Trends, Challenges, and Implications for the United States.". We are new in this process, said Rep. Sanford Bishop (D-Ga.), chair of the agriculture appropriations subcommittee. TreasuryDirect. The real question is: How much of the totalU.S. debtdoes the U.S.federal governmentowe to Chinese lenders? Manuel Balce Ceneta/AP Photo. A repurchase agreement is a form of short-term borrowing for dealers in government securities. Chinese lenders snap up so much of the U.S. debt for one basic economic reason: protecting its dollar-pegged yuan. 18, far behind No. Read our. The ideal entry-level account for individual users. WH Groups shareholders include many large U.S.-based financial institutions.". TreasuryDirect. Gates is No. ThoughtCo, Sep. 2, 2021, thoughtco.com/how-much-debt-does-china-own-3321769. China's economic growth has slowed over the years. While foreign land ownership has been reported in all 50 states and Puerto Rico, the holdings are concentrated in particular states. While their market shares may be different percentages (Amazon owns 39% of all US ecommerce sales, while Alibaba owns 58.2% of all retail ecommerce shares in China), they each dominate their respective countries in which they began. Chinese purchases of U.S agricultural land sparked concern in Congress among a bipartisan group of lawmakersbut 18 other countries own more American agricultural acres than China. Billions of dollars flow into the U.S. from China every year. Nonagricultural land (such as homesteads and roads) accounted for 2%. In addition, the U.S. Treasury Department has a proven track record of being able to find new creditors very quickly when needed. Many large corporations, pension funds, and wealthy individuals are investing in agricultural land in the United States and abroad. However, there are some countriessuch as Niger, Cambodia, and Laoswhose debt to China is more than 20% of their GDP. The United States owes China approximately $980.8 billion as of May 2022. (Smithfield said in a later statement pertaining to their ownership structure that they are "a U.S. company that provides more than 40,000 American jobs and partners with thousands of American farmers. Chart. For example, Chinese pharmaceutical companies supply 70 percent of the world's acetaminophen, commonly used in Tylenol. This material may not be published, broadcast, rewritten, July 18, 2022. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. "Debt to the Penny. Whether you're an American retiree or a Chinese bank, American debt is considered a sound investment. Greed Is Good or Is It? As it is not known exactly how much US land is owned by China. As soon as this statistic is updated, you will immediately be notified via e-mail. Pallets of sod cover part of the 230 acre Kuenzi Turf & Nursery on June 2, 2021 in Salem, Oregon. Bipartisan pressure is building to stop foreign nationals from purchasing American farm operations and receiving taxpayer subsidies. The USDA could enforce the portion of the bill that bans Chinese-owned companies from participating in federal benefits programs, but constitutionally, land purchasing falls under states rights, and legislators have made no motions to change that. Ever since the establishment of theBretton Woods Systemin 1944, the value of Chinas currency, the yuan, has been connected or pegged to the value of the U.S. dollar. Definition and Impact. It is responsible for lower interest rates and cheap consumer goods. Smithfield is vertically integrated and owns all aspects of its supply chain, meaning that WH Group now controls a significant portion of U.S. pork production and revenue in addition to farmland. Missouri had formerly banned all foreign ownership of agricultural land in the state, but one week before Shuanghui took over Smithfield, that rule changed to allow foreign entities to own up to 1 percent of the states farmland. Is it better to pay off credit card or pay down? In August 2022, the Asian nation owned $971.8 billion in Treasurys, roughly 13% of the U.S. national debt. "GDP Growth (Annual %) - Japan, China.". I'm a reporter for Forbes' explainers and trends team. Furthermore, policymakers have signaled no efforts to improve state- or national-level information on foreign purchases of U.S. farmland, leaving the true picture obscured. That changed with the USMCA. While Japans 4.8% ownership of the U.S. debt is only slightly less than Chinas 5.3%, the Japanese-owned debt is rarely depicted in a negative light, as is Chinas. | It buys available excess U.S. dollars from the exporters and gives them the required renminbi. In 2019, 49 percent of reported foreign-held acreage in the United States was forest land, while 25 percent was crop land, 24 percent was for pasture and other agricultural uses, and 2 percent was for non-agricultural uses (such as homesteads and roads). (2021, September 2). By the start of 2020, Chinese owners controlled about 192,000 agricultural acres in the U.S., worth $1.9 billion, including land used for farming, ranching and forestry, according to the Agriculture Department. What US companies are now owned by China? This amount is subject to market fluctuations. Debt to the Penny., U.S. Department of the Treasury. Q2: What threats do foreign acquisitions of U.S. farmland pose? The reality is very different than the rhetoric. Control of 8,000-plus of American theater screens and other media platforms allows China to project "soft power" and block unflattering depictions of the Chinese government from being presented, both in terms of creative production and mass distribution. The extent of Chinese investment in recent years has also raised red flags around U.S. national security, particularly in the realm of rare earth minerals. SWINE FLU STRAIN WITH 'HUMAN PANDEMIC POTENTIAL' FOUND IN MORE CHINESE PIGS, SCIENTISTS SAY. Quotes displayed in real-time or delayed by at least 15 minutes. "The Chinese have a strong foothold here in the U.S., and Chinese firms have access to what seems like infinite government lending, and because the country's goal of world dominance is ingrained into the minds of their business leaders," explained Paul Murad, president of Nevada-based real estate firm Metroplex. What Would Happen if China Were to Call In Its Debt? Even at a slow pace, dollar demand would drop. Japancommands the top spot among foreign creditors with $1.2 trillion4% of total U.S. debtowed by the U.S. government. "Your Pension Is a Lie: There's $210 Trillion of Liabilities Our Government Can't Fulfill. All rights reserved. How do I know if my stimulus was deposited? The rest of the $29 trillion national debt is owned by either people in the U.S. or by the U.S. government itself. This might not sound like a lot, but Chinese ownership of American farmland has exploded dramatically over the last decade. Still, thats less than farmland owned by people from other nations like Canada and European countries, which account for millions of acres each. 5. "Frequently Asked Questions About the Public Debt. This helps inflate the value of the dollar. "Major Foreign Holders of Treasury Securities.". Since this strategy is dependent on exportsover $ 452.58 billion of which went to the U.S. in 2020China needs ever-more renminbi to continue to have a lower currency exchange rate than the U.S. dollar, and thus offer cheaper prices for the products it exports. March 18, 2016, 2:10 PM. Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed. As of the start of 2020, Chinese investors owned about 192,000 acres of U.S. agricultural land valued at about $1.9 billion, according to Politico. Smithfield was also in line to receive money from the program, which was created to help U.S. farmers strung by trade retaliation from China and other competitors. For example, critics say that should the Chinese government suddenly call indemand immediate repaymentof all of the U.S. governments obligations, the American economy would be hopelessly crippled. Land grabbingwhen a government, company, or other entity purchases large swathes of land in another countrycan affect local land rights and agricultural production, sometimes putting local food security at risk. The Senate Bill is being reviewed by the Committee on Banking, Housing and Urban Affairs. That made the yuan more attractive to forex traders in global markets. In 2011, the total U.S. debt stood at $14.3 trillion. This also reduces the purchasing power of Chinese earners. The NYFC also points to both urban and rural development as a threat to the future of U.S. farms, since converting farmland to other uses drives up prices and makes the land unaffordable for beginning farmers. The measure is expected to reach the House floor before the end of July, as part of a broader appropriations package, although the Senate has not yet drafted its own version of the spending bill. USDA reports that foreign land holdings have increased by an average of 2.2 million acres per year since 2015. In a vicious cycle, they sell the U.S. dollars they receive through exports to get renminbi, which increases the supply of U.S. dollars and raises the demand for renminbi, to the point that the renminbi ranked as the eighth most traded currency in the world as of 2019. companies.". https://www.thoughtco.com/how-much-debt-does-china-own-3321769 (accessed March 4, 2023). Legal Statement. This includes everyone from retirees who purchase individual U.S. Treasurys to the Chinese government. The deal meant that WH Group now owns the largest pork producer in the United States as well as over 146,000 acres of Missouri farmland. This is partly because Japan is seen as a much friendlier nation and because Japans economy has been growing more slowly than Chinas over the last several years. According to USDA data, foreign investors owned at least 35.2 million acres of U.S. agricultural land in 20192.7 percent of U.S. farmland, an area almost the size of Iowa. A government bond is issued by a government at the federal, state, or local level to raise debt capital. The FARMForeign Adversary Risk Managementact, introduced in the House of Representatives and the Senate on January 25, would trigger a Department of Agriculture and Government Accountability Office investigation into foreign influence on Americas agriculture industry. When this land changes hands, theyre going to gobble it up, he said of foreign buyers. At the same time, American consumers are assured of a steady flow of relatively inexpensive Chinese products and services. In late May, the Senate unanimously passed the bipartisan Holding Foreign Companies Accountable Act in a bid to force foreign companies with China at the likely forefront to adhere to U.S. securities law, and compel some to be removed from American stock exchanges. Near a 10,000-acre hay farm run by a Saudi subsidiary, local residents say their wells are going dry. Citing the nonpartisan economic think-tank Paulson Institute, the American Security Institutereport underscores that "Chinese firms and investors own a controlling majority in nearly 2,400 U.S.
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