posted on Sep, 1 2010 @ 12:08 AM
I really don't understand the economics of this either, but I thought China was carrying the US debt load and Japan too.
Of course China is worried.
Ho-fung Hung, author of China and the Transformation of Global Capitalism, said it was hard to tell whether China had a long-term strategy for selling
US debt. "I think decision-makers know very well that any large-scale selling of US treasuries won't do any good to the Chinese economy, which
still needs a sustained recovery of the US economy to pull up its export sector. Such selling will also devalue China's existing holdings of
treasuries," he said.
Mr. Johnson, a former chief economist for the International Monetary Fund, estimated that China owns about $1 trillion in U.S. Treasury securities, or
nearly half the $2.37 trillion stock of Treasury debt held by "foreign official" owners.
The amount of U.S. debt held by China is even higher than that, said Eswar Prasad, an economist at Cornell University.