America's Top Ten Creditors

world | Mar 01, 2011 | By Martin Barillas

Despite any efforts by President Barack Obama and Congress to stimulate the economy and bring about a balance of payments not seen since 2001, the U.S. will continue to run deficits for the next decade, and the national debt will keep growing every. America is awash in debt to some of the greatest of the earthly powers. Most of the $14 trillion debt is held by private banks in the U.S., but the Treasury Department and the Federal Reserve Board estimate that, as of December 2010, about $4.4 trillion of it was held by foreign governments that purchase our treasury securities and therefore own a chunk of the action. 

Let's go to the top ten creditors. Three of the top 10 spots are held by China, Hong Kong, and Taiwan, and while two of our biggest creditors are fellow English-speaking democracies, a considerable share of our debt is held by oil exporters - such as Venezuela and Saudi Arabia - that tend to be decidedly less friendly. 

The list shows the top 10 foreign holders of U.S. debt, comparing each creditor's holdings with the equivalent chunk of the United States they possess, represented by the latest (2009)  gross domestic product data for American states as released by the U.S. Bureau of Economic Analysis. 

1. People's Republic of China

Amount of U.S. debt: $891.6 billion

Share of total foreign debt: 20.4%

China is the undisputed largest holder of U.S. foreign debt in the world and accounts for 20.4% of the total. Communist China's $891.6 billion in U.S. treasury securities is almost equal to the combined 2009 GDP of the states of Illinois ($630.4 billion) and Indiana ($262.6 billion) in 2009, a shade higher at a combined $893 billion.

2. Japan

Amount of U.S. debt: $883.6 billion

Share of total foreign debt: 20.2%

The runner-up on the list of our most significant international creditors goes to Japan, which accounts for over a fifth of our foreign debt holdings with $883.6 billion in U.S. treasury securities. That is just short of the GDP of an impressive part of America: Minnesota ($260.7 billion), Wisconsin ($244.4 billion), Iowa ($142.3 billion) and Missouri ($239.8 billion) produced a combined output of $887.2 billion in 2009.

3. United Kingdom

Amount of U.S. debt: $541.3 billion

Share of total foreign debt: 12.4%

At number three on the list is perhaps our closest ally on the world stage, the United Kingdom holds $541.3 billion in U.S. foreign debt, which is 12.4% of our total external debt. That amount is equivalent to the combined GDP of two East Coast manufacturing hubs: Delaware ($60.6 billion) and New Jersey ($483 billion). The two states' combined output in 2009 came to $543.6 billion.

4. Oil Exporters

Amount of U.S. debt: $218 billion

Share of total foreign debt: 5% 

The group includes  Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. As a group they hold 5% of all American foreign debt, with a combined $218 billion of U.S. treasury securities in their own treasuries. This is close to the combined 2009 GDP of Nebraska ($86.4 billion) and Kansas ($124.9 billion).

5. Brazil

Amount of U.S. debt: $180.8 billion

Share of total foreign debt: 4.1%

Brazil is heavily invested in the US, holding $180.8 billion in debt up by December 2010. That's almost equal to the $180.5 billion combined GDP of Idaho ($54 billion) and Nevada ($126.5 billion).

6. Caribbean Banking Centers

Amount of U.S. debt: $155.6 billion

Share of total foreign debt: 3.6%

The US Treasury Department counts the Bahamas, Bermuda, the Cayman Islands, the Netherlands Antilles, Panama and the British Virgin Islands as among these island refuges of lucre. Together, they hold $155.6 billion in U.S. treasury securities. That' is equal to the GDP of  Kentucky: $156.6 billion.

7. Hong Kong

Amount of U.S. debt: $138.2 billion

Share of total foreign debt: 3.2% 

With $138.2 billion in U.S. treasury securities, Hong Kong's interest in US debt is equivalent to the GDP of Wyoming ($37.5 billion) and Washington D.C. ($99.1 billion).

8. Canada

Amount of U.S. debt: $134.6 billion
Share of total foreign debt: 3.1%

Canada holds about 3.1% of our foreign debt, or $134.6 billion. The combined GDP of Maine ($51.3 billion), New Hampshire ($59.4 billion) and Vermont ($25.4 billion) comes close to Canada's debt holdings at $136.1 billion. 

9. Taiwan

Amount of U.S. debt: $131.9 billion
Share of total foreign debt: 3.0%

An independent island country, Taiwan, continues to be claimed by China and is a bone of contention between the US and the communist mainland. A story goes that a communist Chinese diplomat once asked, rhetorically, how many of its citizens would the US be willing to lose in a nuclear exchange with China in order to save Taiwan from communist invasion. The diplomat said that China is willing to lose 200 million and yet still conquer the island that it has claimed since Mao tse-Tung's successful revolution. The relationship between Taiwan and the US, besides being strategic and military, is also financial. The island holds $131.9 billion of U.S. debt, roughly equivalent to the combined GDP of West Virginia ($63.3 billion) and Hawaii ($66.4 billion). 

10. Russia

Amount of U.S. debt: $106.2 billion
Share of total foreign debt: 2.4% 

Russia continues to be an adversary of the US despite the supposed fall of communism in 1980s. Led by that dynamic duo, Vladimir Putin and Dmitri Medevdev. Russia is investing in its military and petroleum assets, but also US debt. Currently, it hold about 2.4% of the U.S. debt burden. Its $106.2 billion in treasury securities is equivalent to the 2009 GDP of the sparsely populated states of the Great American Plains. The combined output of North Dakota ($31.9 billion), South Dakota ($38.3 billion) and Montana ($36 billion) matches up nicely with the Russia's holdings. 

It is no wonder that President Obama bows in gratitude to our foreign creditors.



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Spero News editor Martin Barillas is a former US diplomat, who also worked as a democracy advocate and election observer in Latin America. His first novel 'Shaken Earth', is available at Amazon.

The views and opinions expressed herein are those of the author only, not of Spero News.

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