Infographic: The Countries Most in Debt to China (2024)

FAQs

Which countries have the most debt to China? ›

[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).

Debt as a share of GDP has risen to about the same level as in the United States, while in dollar terms China's total debt ($47.5 trillion) is still markedly below that of the United States (close to $70 trillion). As for non-financial corporate debt, China's 28 percent share is the largest in the world.

Consequences of Owing Debt to the Chinese

If China called in all of its U.S. holdings, the U.S. dollar would depreciate, whereas the yuan would appreciate, making Chinese goods more expensive.

India takes the top spot. The world's most populous country owed $38.3bn to the WB at the end of 2022, down by almost $1.5bn from a year earlier. India's outstanding balance is almost double that of the next biggest debtor, Indonesia, with $20.6bn.

In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.

Who owns most U.S. debt? ›

The largest holder of U.S. debt is the U.S government. Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.

China focuses on export-led growth to help generate jobs. To keep its export prices low, China must keep the renminbi low compared to the U.S. dollar. U.S. debt to China comes in the form of U.S. Treasuries, largely due to their safety and stability.

Data from top financial institutions like the World Bank show the gap between the two largest economies widened further last year. China's economy was just two-thirds the size of its geopolitical rival, down from 70 percent in 2022 and 76 percent in 2021.

But most of Japan's debt is owned by domestic investors. The country's external position is bolstered by a large current account surplus and foreign exchange reserves worth more than $1 trillion. At the end of last year, Japan's overseas assets were around 84% of its annual economic output.

Unlike the World Bank, China does not finance its credits by borrowing on the international markets itself. As stated earlier, it uses part of its huge reserves of dollars to grant loans.

The nation's debt, currently over $34 trillion, is rampantly growing as U.S. lawmakers have been unable to agree to long-term budget reforms that could tame it.