That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. In fact, research firm Gartner revealed last year that a third of supply chain leaders had plans to move at least some of their manufacturing out of China before 2023. U.S. Department of the Treasury. Q5: What is the real threat to U.S. food security? China also is liberalizing its control of the yuan, also called the "renminbi." The AFIDA requires foreign entities to report transactions of farmland to the USDA and imposes steep penalties for failing to report (up to 25 percent of the fair market value of the land), although they are rarely enforcedthe last fine imposed under the act was in 2014. It is not only foreign companies who take advantage of this regulatory loophole, howevercompanies from other states and cities around the United States are also buying up land in Arizona to take advantage of the states loose water regulations, putting Arizonas long-term water resources at risk. That's when the U.S. Department of the Treasury changed how it measures the debt. China produces 97 percent of U.S. antibiotics and about 80 percent of active pharmaceutical ingredients used in American drugs, giving the Chinese Communist Party absolute control of. Although Congress has become increasingly concerned about Chinese land purchases, investors from China currently own only a small fraction of this land, at 191,652 acres (0.05 percent of the total). While some states have strict laws in place, others are more open to foreign investments. Indeed, there has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade. 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. A2: On a large scale, these acquisitions do not represent a substantial enough portion of food production in the United States to threaten national food security. If the Chinese suddenly decided to call in all of the federal government's obligations (which isn't possible, given the maturities of debt securities), others would likely step in to service the market. Other foreign holders included oil-exporting countries and Caribbean banking centers. The total has grown by an average 2.3 million acres per year since 2015, according to USDA data. 24 with 420,000 acres, which forms the site of his suborbital spaceflight company, Blue Origin. 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. In return, American consumers get cheap Chinese products and incoming investment capital. IOUs are formed and financed through joint efforts of the U.S. Department of the Treasury and the Federal Reserve. On a dollar-value basis, total manufacturing imports from Mexico to the U.S. increased 10% between 2017 and 2018, from $278 billion to . This material may not be published, broadcast, rewritten, Walmart does not own Dollar Tree as of 2022. Second, the Chinese rely on American markets to buy Chinese-produced goods. Does paying off all debt increase credit score? "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. Foreign-owned land accounts for about 2.7% of all U.S. farmland and forest land, which, according to the Department of Agriculture, is about 897 million acres. Continuing a trend that began early in 2021, China's portfolio of U.S. government debt in May dropped to $980.8 billion, according to Treasury Department data released Monday. White House National Security Advisor Jake Sullivan said in a statement that the United States welcomes the commitments of Israel and the Palestinian Authority to reduce tensions and prevent further violence. Last July, a Politico report, citing Agriculture Department statistics for 2020, said Chinese companies controlled about $1.9 billion worth of agricultural land. Stephen Gandel. The rest of the $29 trillion national debt is owned by either people in the U.S. or by the U.S. government itself. I would suggest that we sit down and we work through it so we can accomplish our objective, but do it in a way that is sensitive to all those who might be somewhat offended by the approach.. 2023 FOX News Network, LLC. 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. Demand for dollar-denominated bonds raises the dollar value compared to that of the yuan. Of the $30.5 trillion in government debts, more than $6 trillion is owned by the federal government in trust funds. Quotes displayed in real-time or delayed by at least 15 minutes. You need at least a Starter Account to use this feature. Its allowed the yuan to trade in a wider trading range around a basket of currencies that include the dollar. The Department of Agriculture requires foreign entities who buy U.S. agricultural land to file a report within 90 days disclosing what they bought. Market data provided by Factset. Chinese billionaire and businessman Wang. 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. However, the US government estimates that Chinese-owned entities own approximately 7,000 acres of land in the US, which is a small fraction of the 2. . This is just a small part of the 30 . These are accounts dedicated to Social Security, Medicare, and other entitlements. National Association of Realtors. A few states, including top agricultural centers like Iowa and Minnesota, already have varying restrictions on foreign ownership of their farmland. How do I know if my stimulus was deposited? Newt says China will 'dominate world' if tech theft isn't stopped, 'it's a matter of life and death', share data with Chinese communist spy agencies. 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. Learn more about how Statista can support your business. China's position as the largest foreign holder of U.S. debt gives it some political leverage. That data also shows that the. It's more of a novelty day like Valentine's Day, rather than a religious celebration. (ChinaOwnsUs campaign). China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. 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. Business Solutions including all features. That makes Chinese exports cheaper than American-made goods, increasing sales. 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. I'm a reporter for Forbes' explainers and trends team. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. That figure was$30.5trillion as of June 30, 2022. companies.". Though the magazine named him the largest private farmland owner in January 2021, the Microsoft founder came under fire in early 2022 when he was briefly barred from purchasing 2,100 acres of North Dakota farmland. Agricultural Land. ", The World Bank. Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. As a major function of its monetary policy, China's central bank, the Peoples Bank of China (PBOC), actively works to prevent this imbalance between the U.S. dollar and renminbi in local markets. As it is not known exactly how much US land is owned by China. According to the NYFC, young and aspiring farmers say access to land is their largest barrier to starting a successful farm business. And while the U.S. grants China permission to buy its companies, China does not allow U.S. companies to operate the same way on their soil. Each bill, bond, and note represents ownership in U.S. debt. Its economy grew more than 10% for the three decades before the 2008 recession. According to the U.S. Census Bureau, the U.S. has been suffering from a significant trade deficit with China since 1985, meaning that the U.S. buys more goods and services from China than China buys from the U.S. Chinese exporters receive U.S. dollars for their goods sold to the U.S. A3: The only federal law governing these transactions is the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978. Appliances (technology), IBMP.C. As economists point out, other creditors are likely to get in line to buy up Chinas share of the debt, including the Federal Reserve, already the owner of twice as much of the U.S. debt than China has ever owned. From May 2021 to May 2022, the debt to Japan and China decreased by 4% and 9%, respectively. That effort includes greater scrutiny of large meat processing companies like JBS and Smithfield, as well as plans to tighten the requirements for meat to be labeled a Product of the USA.. David Schlessinger and I founded Five Below 16 years ago with a promise to build an amazing store for teens and pre-teens that offers trend-right, high-quality merchandise all at $5 or less, said Tom Vellios . ", TreasuryDirect. How much of the U.S. land does China own? When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. Statista. You can learn more about the standards we follow in producing accurate, unbiased content in our. 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. While a large portion of Smithfield pork was already being exported to China prior to the acquisition, the Covid-19 crisis raised concerns about Chinese control of U.S. food supply chains. This amount is subject to market fluctuations. Arizona, for instance, has no rules on groundwater pumping as long as it is for a beneficial use, which includes agriculture even if the products are shipped elsewhere. Most states, like Texas and Maine, have no restrictions on foreign ownership of land, contributing to the large amount of farmland that is under foreign control in these states. China is taking steps to make its currency, the yuan, transition to a global currency. Quotes displayed in real-time or delayed by at least 15 minutes. Amanda Jackson has expertise in personal finance, investing, and social services. Defining Alibaba Alibaba is China's and by some measures, the world's biggest online commerce company. The Senate Bill is being reviewed by the Committee on Banking, Housing and Urban Affairs. Every year since 2010, China has held more than $1 trillion in U.S. debt. This might not sound like a lot, but Chinese ownership of American farmland has exploded dramatically over the last decade. In, National Association of Realtors. While foreign land ownership has been reported in all 50 states and Puerto Rico, the holdings are concentrated in particular states. Pressing Challenges to U.S. Army Acquisition: A Conversation with Hon. As of the end of November, China owned US$1.063 trillion of the total outstanding US government debt issued by the US Department of the Treasury. USDA reports that foreign land holdings have increased by an average of 2.2 million acres per year since 2015. In May 2018, one Chinese yuan was worth about $0.16 U.S. dollar. Accessed March 04, 2023. https://www.statista.com/statistics/611020/total-number-of-properties-purchased-by-chinese-buyers-in-the-us/. CNBC's Uptin Saiidi explores some of China's biggest assets in New York and explains how the tr. U.S.-based companies also own over nine million acres in other countries. China holds more than $1 trillion of the U.S. national debt. Is Americas Debt to China Really So Bad? 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. Total number of residential properties bought by Chinese buyers in the U.S. 2010-21. "In 2017, the United States produced zero rare earth minerals. Chinese firms have expanded their presence in American agriculture over the last decade by snapping up farmland and purchasing major agribusinesses, like pork processing giant Smithfield Foods. Definition and Analysis, What Is National Debt and Where It Fits Within the Economy, Alexander Hamilton and the National Economy, The History of US Government Financial Bailouts, What Was the Open Door Policy in China? Chart. "Major Foreign Holders of Treasury Securities.". Owning U.S. Treasury notes helps China's economy grow. Includes buyers from the People's Republic of China, Hong Kong and Taiwan. Foreign-owned land accounts for about 2.7% of all U.S. farmland and forest land, which, according to the Department of Agriculture, is about 897 million acres. U.S. Debt to China: How Much Is It, and Why? Robert Longley is a U.S. government and history expert with over 30 years of experience in municipal government and urban planning. Sign up to receive The Evening, a daily brief on the news, events, and people shaping the world of international affairs. First, because U.S. securities like Treasury bills come with varying maturity dates, it would be impossible for the Chinese to call them all in at the same time. When this land changes hands, theyre going to gobble it up, he said of foreign buyers. When the pandemic hit, Smithfield increased pork exports to China even as the United States experienced widespread meat shortages due to supply chain disruptions and Smithfield closed some of its plants due to poor working conditions. The resulting loss of export business would lead to a major unemployment crisis in China. Haier bought GE for $5.4 billion, a recording breaking sum at that time. Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics. That data also shows that the approximately 190,000 acres of farmland owned by Chinese interests has remained virtually unchanged since 2013. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. Missouri had formerly banned all foreign ownership of agricultural land in the state, but one week before Shuanghui took over Smithfield, that rule changed to allow foreign entities to own up to 1 percent of the states farmland. Foreign investors by the end of 2019 held an interest in more than 35 million acres an area bigger than New York State. How Much Is the Per Capita Money Supply in the U.S.? This Treasury-led change makes it difficult to make long-term comparisons. Instead, Dollar Tree is a self-owned company that itself has acquired numerous national and regional competitors over the years, including Family Dollar and Dollar Bill$. "How Much Money Does the World Owe China? The bill, which is yet to move through the House, would necessitate that "an issuer must make this certification if the Public Company Accounting Oversight Board is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the board. | Photo by Nathan Howard/Getty Images. China has steadily accumulated U.S. Treasury securities over the last few decades. This helps inflate the value of the dollar. Contractionary Monetary Policy. What is the highest credit limit for Chase Sapphire? Weak Oversight of Foreign Farmland Deals Sparks Concern Amid China Purchases (WSJ), North Dakota Turns Against Chinese Corn Mill Project (WSJ). Critics claim that the rule change was instrumental in allowing the deal to go through as written, and some members of Congress warned of Chinese government involvement in the purchase. China Daily, which is controlled by the Chinese Communist Party, has paid more than $4.6 million to The Washington Post and . Sean Rayford/Getty Images, America cannot allow China to control our food supply, Pence said Wednesday during a speech at the conservative Heritage Foundation, urging President Joe Biden and Congress to end all farm subsidies for land owned by foreign nationals.. The government now provides affordable housing by subsidizing commercial housing purchases or by offering low-rent public (social) housing to middle- and low-income families. The money flowing into agricultural real estate from other countries also makes it difficult for new farmers in the U.S. to afford land as outside buyers bid up prices. Longley, Robert. China could start this process only after it further expanded its exports to other Asian countries and increased domestic demand. Before June 2010, Treasury reports showed that China held about $843 billion in debt. While such purchases in low- and middle-income countries have been coveredextensively, they also happen here in the United States. It was revealed that just last year alone, China spent $6.1 billion dollars on housing in the U.S. making it America's top foreign buyer. The average American is made better off by foreigners providing inexpensive services and only demanding pieces of paper in return. As of 2019, a total of 191,000 acres of American land were owned by China. A repurchase agreement is a form of short-term borrowing for dealers in government securities. March 18, 2016, 2:10 PM. "Under President Trump, the U.S. was the first to recognize their nonstop deceits, and now the rest of the world has a clearer picture of China's ambition. All rights reserved. Is it better to pay off credit card or pay down? Can you rollover Roth 401k to Roth IRA while still employed? The first and most important is that China wants its currency, the yuan, pegged to the dollar. The US National Debt and How It Affects You. In 2019, Chinese nationals purchased 6,300 properties in the United States, generating about 4.5 billion U.S. dollars in sales. Japan consistently tops the list, owning about $1.3 trillion as of October 2021. statistic alerts) please log in with your personal account. "How Much U.S. Debt Does China Really Own?" Food insecurity among U.S. families is primarily driven by poverty, not a lack of food. 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. China has the second-greatest amount of U.S. debt held by a foreign country. Scrutiny of foreign-owned agricultural operations receiving taxpayer subsidies has also been rising in recent years after meatpacking conglomerates like the U.S. subsidiary of Brazilian-owned JBS received millions of dollars under the Trump administrations trade bailout starting in 2018. 2 Which Country Owes the Most Money to China? 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. Read our. 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. 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. Representative Grace Meng expressed concern that the amendment could fuel already rising anti-Asian hate, and the USDA and advocacy groups have pointed out that the USDA does not have the authority to intervene in private land deals. ), after gaining momentum seeded in farm states. China's economic growth has slowed over the years. China drew some headlines in 2013 and 2014 for buying up a lot of gold to store in its bank vaults, but the real safety net for the yuan is the worldwide belief in the dollar. Foreign-owned land accounts for about 2.7% of all U.S. farmland and forest land, which, according to the Department of Agriculture, is about 897 million acres. For these reasons, we'll likely see China remain one of the world's largest holders of U.S. national debt. The largest holder of U.S. debt is the United States government. In addition, the U.S. Treasury Department has a proven track record of being able to find new creditors very quickly when needed. For example, in water-scarce regions like the Southwest, outside use of freshwater resources can affect water availability for local farms and communities. It is responsible for lower interest rates and cheap consumer goods. It would perpetuate already rising anti-Asian hate, Meng warned at the markup. Even if these bills had passed, they would have strengthened oversight on purchases of U.S. companies, not agricultural land specifically, leaving most land acquisitions unregulated. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Profit from additional features with an Employee Account. This also reduces the purchasing power of Chinese earners. The quick answer is that as of January 2018, the Chinese owned $1.17 trillion of U.S. debt or about 19% of the total $6.26 trillion in Treasury bills, notes, and bonds held by foreign countries. "Debt Position and Activity Report, June 2022," Page 1.