Fact Check: The U.S. has borrowed billions of dollars from China.

The Claim: "The U.S. has borrowed billions of dollars from China."

Introduction

The assertion that "The U.S. has borrowed billions of dollars from China" refers to the significant amount of U.S. Treasury securities held by China, which positions it as one of the largest foreign holders of U.S. debt. This claim raises questions about the nature of international borrowing and the implications of such debt on U.S.-China relations.

What We Know

1. U.S. National Debt Overview: As of 2023, the total U.S. national debt is approximately $31.4 trillion, with a significant portion held by foreign investors, including China 17.

2. China's Holdings: Reports indicate that China holds around $859.4 billion in U.S. debt 9. This makes China one of the largest foreign creditors to the U.S., although Japan currently holds a larger share, approximately $1.1 trillion 6.

3. Foreign Borrowing Trends: The total amount of U.S. debt held by foreign entities was about $832 billion in 2023, a decrease from a peak of $976 billion in 2022 2.

4. Historical Context: The U.S. has engaged in borrowing since its inception, with foreign borrowing being a common practice throughout its history 1.

5. China's Recent Actions: Reports indicate that China has been reducing its holdings of U.S. debt, selling off approximately $600 billion worth between 2016 and 2023 8.

Analysis

The claim that the U.S. has borrowed billions from China is supported by various sources, but the context and implications of this borrowing require careful examination.

• Source Credibility:

  • The U.S. Treasury and Congressional Research Service (CRS) are authoritative sources for financial data, providing reliable statistics on national debt and foreign holdings 12.
  • Wikipedia, while often a good starting point, should be approached with caution as it can be edited by anyone and may not always reflect the most current or accurate information 4.
  • USAFacts and Marketplace provide accessible summaries of complex financial topics, but their interpretations should be cross-referenced with primary data sources 67.

• Potential Bias:

  • The Conversation article discusses the implications of U.S. debt on international relations, which may introduce a bias depending on the author's perspective on U.S.-China relations 8.
  • Investopedia is generally reliable for financial topics but may present information in a way that aligns with specific investment narratives 9.

• Methodological Considerations:

  • The figures regarding China's holdings of U.S. debt vary slightly across sources, which could be due to different reporting periods or methodologies. For instance, the $859.4 billion figure from Investopedia may differ from other estimates due to timing or data collection methods 9.
  • It would be beneficial to have a clearer understanding of how these figures are calculated and reported, particularly regarding the timing of sales and purchases of U.S. debt by China.

• Contextual Implications:

  • The relationship between U.S. debt and foreign ownership is complex. While borrowing from China can be seen as a financial strategy, it also raises concerns about economic dependency and geopolitical leverage 8.
  • The recent trend of China selling off U.S. debt could indicate a shift in economic strategy or a response to broader geopolitical tensions.

Conclusion

Verdict: True

The claim that "The U.S. has borrowed billions of dollars from China" is substantiated by evidence indicating that China holds approximately $859.4 billion in U.S. Treasury securities, making it one of the largest foreign creditors to the United States. This borrowing is a significant aspect of the broader context of U.S. national debt, which totals around $31.4 trillion.

However, it is important to recognize the nuances surrounding this claim. While the figure is substantial, it represents a portion of a much larger national debt landscape, and China's holdings have been decreasing in recent years. This trend may reflect changing economic strategies or geopolitical considerations.

Moreover, the data on foreign holdings of U.S. debt can vary slightly depending on the source and the timing of reports, which introduces some limitations in the precision of the figures. Readers should approach this information with a critical mindset, considering the broader implications of U.S. debt and the dynamics of international finance.

As always, it is advisable for readers to evaluate information independently and seek out multiple sources to gain a comprehensive understanding of complex financial topics.

Sources

1. Understanding the National Debt | U.S. Treasury Fiscal Data. Link
2. Foreign Holdings of Federal Debt. Link
3. Debt to the Penny | U.S. Treasury Fiscal Data. Link
4. National debt of the United States - Wikipedia. Link
5. National debt of China - Wikipedia. Link
6. Which countries own the most US debt? | USAFacts. Link
7. Who does the U.S. owe $31.4 trillion? - Marketplace. Link
8. U.S. national debt is its Achilles’ heel, but China sees it as an opportunity. Link
9. How Much U.S. Debt Does China Own? Link
10. The Federal Government Has Borrowed Trillions. Who Owns All that Debt? Link