China's Holdings of U.S. Securities: Implications for the U.S. Economy (July 30, 2009)

摘要

Given its relatively low savings rate, the U.S. economy depends heavily on foreign capital inflows from countries with high savings rates (such as China) to help promote growth and to fund the federal budget deficit. China has intervened heavily in currency markets to limit the appreciation of its currency, especially against the dollar. As a result, China has become the worlds largest and fastest growing holder of foreign exchange reserves (FER). China has invested a large share of its FER in U.S. securities, which, as of June 2008, totaled $1.2 trillion, making China the second largest foreign holder of U.S. securities (after Japan). These securities include long-term (LT) Treasury debt, LT U.S. agency debt, LT U.S. corporate debt, LT U.S. equities, and short-term debt. It is likely that China became the largest foreign holder of U.S. securities by the end of 2008. From June 2002 to June 2008, Chinas holdings of U.S. securities increased by over $1 trillionfar more than that of any other nation.