4356 (117)) that would block any new agricultural purchases by companies that are wholly or partly controlled by the Chinese government and bar Chinese-owned farms from tapping federal support programs. 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. Gates continues to deny any plot, telling Reddit users in January that he owns less than one four-thousandths of U.S. farmland and invests in farms to improve their production and create jobs. China must maintain its export-led growth to generate the number of jobs needed to keep its massive population productively engaged. These include white papers, government data, original reporting, and interviews with industry experts. The reality is very different than the rhetoric. Outward FDI stock share of state-owned and private enterprises in China 2011-2021 FDI outflows from Chinese central enterprises in non-financial sectors 2011-2021 Value of Chinese FDI flows to the . If China ever did call in its debt, it slowly would begin selling off its Treasury holdings. On the other hand, if China were to call in its debt, the demand for the dollar could plummet. This might not sound like a lot, but Chinese ownership of American farmland has exploded dramatically over the last decade. This is just a small part of the 30 . https://www.thoughtco.com/how-much-debt-does-china-own-3321769 (accessed March 4, 2023). With the U.S. dollar considered one of the safest and most stable currencies in the world, dollar-pegging helps the Chinese government maintain the stability and value of the yuan. That's when the U.S. Department of the Treasury changed how it measures the debt. Of that, 195,000 acres, worth almost $2 billion when purchased, are owned by 85 Chinese investors, which could be individuals, companies or the government. That data also shows that the approximately 190,000 acres of farmland owned by Chinese interests has remained virtually unchanged since 2013. China has steadily accumulated U.S. Treasury securities over the last few decades. Crops beings harvested on an Iowa farm in 2018, Weak Oversight of Foreign Farmland Deals Sparks Concern Amid China Purchases, North Dakota Turns Against Chinese Corn Mill Project. Anyone anywhere can purchase shares of WH Group on the Hong Kong Stock Exchange. As a presidential candidate in 2019, Warren said she would support a national version of Iowas law along with safeguards against foreign investors using fake American buyers to circumvent the rules. Appliances (technology), IBMP.C. The US National Debt and How It Affects You. Chinese billionaire and businessman Wang. 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. If you are an admin, please authenticate by logging in again. Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics. A1: USDA records provide the best source of information on foreign-held agricultural land, although they are still incomplete and contain many errors (as explained in A3 below). A few states, including top agricultural centers like Iowa and Minnesota, already have varying restrictions on foreign ownership of their farmland. This drives China to accumulate U.S. dollars as foreign exchange (forex) reserves. As of 2019, a total of 191,000 acres of American land were owned by China. Register in seconds and access exclusive features. In the wake of Covid-19 supply chain disruptions and escalating tensions with China, U.S. lawmakers have specifically increased scrutiny of purchases by Chinese investors. You only have access to basic statistics. U.S. Department of the Treasury. This also reduces the purchasing power of Chinese earners. 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. 1 According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 7.03 trillion U.S. dollars in U.S. Treasury securities as of March 2021. Popular cinema company AMC, short for American Multi-Cinema, has been around for over a century and is headquartered in Leawood, KS. Mexico has gone from 38% to 42%. When this land changes hands, theyre going to gobble it up, he said of foreign buyers. Along similar lines, climate-related efforts to increase biofuel production and expand afforestation and reforestation could reduce the amount of land available for food production in the future. "The number is very difficult to gauge correctly due to complicated ownership structures that the Chinese sometimes employ. This amount is subject to market fluctuations. More recently, U.S. authorities have discovered China is funding American university researchers, who don't always disclose those contributions. July 20, 2021 Ryan Morgan U.S. lawmakers are acting with increased concern as Chinese purchasers are buying tens of thousands of acres of U.S. farmland. 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. Please create an employee account to be able to mark statistics as favorites. Douglas R. Bush, Deterring a Cross-Strait Conflict: Beijing's Assessment of Evolving U.S. Strategy, Rethinking Humanitarian Aid: A Conversation with Michelle Nunn, President and CEO of CARE USA, Foreign Purchases of U.S. 41 on The Land Reports 2022 list of Americans who own the most land. If it were to call in its debt, U.S. interest rates and prices could rise, slowing U.S. economic growth. | Photo by Nathan Howard/Getty Images. The buying gorge went from April 2021 to March 2022 and . 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. China acquired another 32,000 U.S. agricultural acres in 2021not as much as they scooped up in 2020, but 98% higher than their combined growth between 2015 and 2019. Debt to the Penny., U.S. Department of the Treasury. [Online]. But its the trend of increasing purchases and the buyers potential connections to the Chinese government that have lawmakers spooked. Does paying off all debt increase credit score? Investopedia does not include all offers available in the marketplace. 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. "How Much Money Does the World Owe China? In addition, the U.S. Treasury Department has a proven track record of being able to find new creditors very quickly when needed. "Debt Position and Activity Report, June 2017," Page 1. China has become one of the largest economies in the world. The average American is made better off by foreigners providing inexpensive services and only demanding pieces of paper in return. According to USDA data, foreign investors owned at least 35.2 million acres of U.S. agricultural land in 20192.7 percent of U.S. farmland, an area almost the size of Iowa. A Chinese firm has also purchased Smithfield, the world's largest pork processor and hog producer. The answer to that question seems to be a constant source of controversy among Americas political leaders and media commentators. The largest holder of U.S. debt is the United States government. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. National Association of Realtors. March 18, 2016, 2:10 PM. 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. Two bills introduced in the House of Representatives and the Senate argue foreign influence on American agricultural land could affect Americas economy, food supply, and national security. Retrieved from https://www.thoughtco.com/how-much-debt-does-china-own-3321769. You need a Statista Account for unlimited access. "We The source adds the following information: "estimates from 2010 thru 2015 include some commercial transactions. ", TreasuryDirect. That makes Chinese exports cheaper than American-made goods, increasing sales. What Would Happen if China Were to Call In Its Debt? From May 2021 to May 2022, the debt to Japan and China decreased by 4% and 9%, respectively. U.S . How Much Money Does the U.S. Of the $30.5 trillion in government debts, more than $6 trillion is owned by the federal government in trust funds. 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.. 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). What is the best way to liquidate stocks? But the company backed out of its contract with USDA after an outcry from lawmakers led by Sen. Chuck Grassley (R-Iowa). Canada is the biggest foreign owner of U.S. agricultural and timber land, and owns 4.7 million acres in the United States. A4: Since the 2013 purchase of Smithfield Foods, multiple bills have been proposed to provide more oversight of foreign investments in U.S. agricultural companies (including in 2017 and 2020), but until recently they each died in committee. Financing for these huge annual IOUs comes from the Department of the Treasury and the Federal Reserve. 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. "Major Foreign Holders of Treasury Securities. | Greed Is Good or Is It? ", International Monetary Fund. US President Joe Biden, King of Jordan II, for the "historic meeting" between Palestinians and Israelis in Aqaba. According to sources, Time Magazine received $700,000, the Financial Times $371,577, Foreign Policy Magazine $291,000, the Los Angeles Times $272,000, and other notable media outlets received more than $1 million. While lawmakers remain laser-focused on Chinese buyers, other nationals own much more agricultural property in the United States. As Chinese investors buy up U.S. Treasury products, they help increase the value of the dollar. companies.". Other top investors are American-based companies, including Vanguard Group Inc. Apple Inc USA is an American Company that was founded in Cupertino, California. "Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022." For long-term U.S. food security, perhaps the larger concern is why up-and-coming U.S. farmers are unable to buy the land they need. Foreign entities buy agricultural land for a variety of reasons, such as food production, wind farming, carbon offsets, or speculative investments. Chinese lenders snap up so much of the U.S. debt for one basic economic reason: protecting its dollar-pegged yuan. 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. However, there are some countriessuch as Niger, Cambodia, and Laoswhose debt to China is more than 20% of their GDP. Q1: Where and why are foreign entities purchasing farmland in the United States? "GDP Growth (Annual %) - Japan, China.". ", Harvard Business Review. Chinese purchases of U.S agricultural land sparked concern in Congress among a bipartisan group of lawmakersbut 18 other countries own more American agricultural acres than China. Photo: GUILLAUME SOUVANT/AFP via Getty Images, Critical Questions Investopedia requires writers to use primary sources to support their work. ), after gaining momentum seeded in farm states. Walmart is founded and owned by the Walton family. Includes buyers from the People's Republic of China, Hong Kong and Taiwan. to incorporate the statistic into your presentation at any time. China does not publish the. Please do not hesitate to contact me. You need at least a Starter Account to use this feature. 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. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. 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. Can you rollover Roth 401k to Roth IRA while still employed? A repurchase agreement is a form of short-term borrowing for dealers in government securities. (Smithfield said in a later statement pertaining to their ownership structure that they are "a U.S. company that provides more than 40,000 American jobs and partners with thousands of American farmers. 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. | United States Treasury Fiscal Data. See Media Page for more interview, contact, and citation details. 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. This material may not be published, broadcast, rewritten, or redistributed. A creditor nation has positive net investment after recording all of the financial transactions completed between it and the rest of the world. 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. Powered and implemented by FactSet Digital Solutions. "China's Currency Policy," Page 1. This includes the Federal Reserve, which already owns six times as much debt as China. "Chinas Economic Rise: History, Trends, Challenges, and Implications for the United States.". Its economy grew more than 10% for the three decades before the 2008 recession. The post, which has been shared over 256,000 times as of April 14, is headlined with "read this before buying meat." "The hogs will still be raised here, but slaughtered and packaged for . The American Security Institute recently released a report and launched a campaign, featuring a billboard in Times Square, to draw further attention to the extensive array of sectors the Chinese government and its partners have invested into.