Foreign debt provides the opportunity for countries to secure the financing they ordinarily wouldn't have access to and to stimulate their economy. Office of the Historian. The PBOC can print renminbi as needed. 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.. China could start this process only after it further expanded its exports to other Asian countries and increased domestic demand. If China called in all of its U.S. holdings, the U.S. dollar would depreciate, whereas the yuan would appreciate, making Chinese goods more expensive. That sounds like a lot of moneybecause it isbut it is actually a little less than the $1.24 trillion China-owned in 2011. To do that, China had to loosen its peg to the dollar. [U]nder Xi Jinping, the Communist party has returned to being the ultimate authority in business," writes The Guardian. So, in part, Chinese demand for American property is a sign of their desire to give their children the best opportunities to have a successful future.. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. The call for tighter limits on who owns Americas farms has come from a wide range of political leaders, from former Vice President Mike Pence to Sen. Elizabeth Warren (D-Mass. The Global Food Security Program would also like to thank Aliza Lauter for her research contributions to this publication. Control of 8,000-plus of American theater screens and other media platforms allows China to project "soft power" and block unflattering depictions of the Chinese government from being presented, both in terms of creative production and mass distribution. Anyone can buy U.S. debt. These are accounts dedicated to Social Security, Medicare, and other entitlements. By artificially keeping the value of the yuan down, the government reduces the buying power of the Chinese middle class, thus making the sale of exports vital keeping the countrys economy moving. ", United States Department of Treasury. While foreign land ownership has been reported in all 50 states and Puerto Rico, the holdings are concentrated in particular states. Some U.S. lawmakers are pushing back amid the coronavirus fallout, which ignited an initial panic over concerns of critical medical shortages and Beijing's threats to withhold the needed goods. National Debt or Federal Deficit? China Daily, which is controlled by the Chinese Communist Party, has paid more than $4.6 million to The Washington Post and . The Chinese government's theft of intellectual property has been an open secret for decades. The products are still made in the USA, but the decisions are made in China. The other 189,000 acres were worth $235 million when purchased and are owned by 62 U.S. corporations with Chinese shareholders. China and investors tied to the CCP own just shy of 200,000 acres of various types of land in the United States. The debate over farm ownership comes amid broader efforts by Congress and the Biden administration to curb the nations economic reliance on China, especially in key industries like food, semiconductors and minerals deemed crucial to the supply chain. of all foreign-owned land, cropland accounted for 29%, and pasture and other agricultural land for 22%. Securities. or redistributed. 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. 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. With an aging U.S. farmer population and not enough new farmers able to enter the industry, more land will inevitably be converted to other uses or sold to foreign and domestic investors unless policies are put in place to support the next generation of farmers. | Photo by Nathan Howard/Getty Images. As its exports decline, China is less able to invest in U.S. Treasurys. 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. 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. Should the PBOC stop interfering, most economists agree that the renminbi would self-correct and appreciate in value, thus making Chinese exports more expensive. China must maintain its export-led growth to generate the number of jobs needed to keep its massive population productively engaged. How can I increase my credit score by 25 points? "GDP Growth (Annual %) - China. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. Times Square billboard endeavors to warn of creeping Chinese influence. CLICK HERE FOR COMPLETE CORONAVIRUS COVERAGE, Times Square billboard endeavors to warn of creeping Chinese influence. China's economy would suffer along with everyone else's. In late May, the Senate unanimously passed the bipartisan Holding Foreign Companies Accountable Act in a bid to force foreign companies with China at the likely forefront to adhere to U.S. securities law, and compel some to be removed from American stock exchanges. If it were to call in its debt, U.S. interest rates and prices could rise, slowing U.S. economic growth. Chinas demand for Treasurys helps keep U.S. interest rates low. In August 2022, the Asian nation owned $971.8 billion in Treasurys, roughly 13% of the U.S. national debt. That's a decline of. 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. . WH Groups shareholders include many large U.S.-based financial institutions.". 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. A Chinese firm has also purchased Smithfield, the world's largest pork processor and hog producer. The reality is very different than the rhetoric. Amazon founder Jeff Bezos comes in at No. "China's Currency Policy," Page 1. ", Harvard Business Review. Texas has the largest amount of foreign-held agricultural land, at 4.4 million acres, followed by Maine and Alabama, according to USDA. Smithfield is vertically integrated and owns all aspects of its supply chain, meaning that WH Group now controls a significant portion of U.S. pork production and revenue in addition to farmland. 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. 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. What is the highest credit limit for Chase Sapphire? Treasury securities are freely traded around the world. U.S. Debt to China: How Much Is It, and Why? Its economy grew more than 10% for the three decades before the 2008 recession. Furthermore, policymakers have signaled no efforts to improve state- or national-level information on foreign purchases of U.S. farmland, leaving the true picture obscured. Second, the Chinese rely on American markets to buy Chinese-produced goods. Investopedia requires writers to use primary sources to support their work. No, China does not own Walmart. 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. CSIS does not take specific policy positions. 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. The answer to that question seems to be a constant source of controversy among Americas political leaders and media commentators. This statistic is not included in your account. Even so, large land purchases present various localized concerns in the places where they occur. Legal Statement. 2023 FOX News Network, LLC. But you'll still see the malls and streets of the big cities filled with Christmas decorations, fir trees, Santa Claus and carols. She is a library professional, transcriptionist, editor, and fact-checker. At the same time, American consumers are assured of a steady flow of relatively inexpensive Chinese products and services. 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 U.S. Debt Does China Really Own?" The Chinese Investor owns about 14% of Snapchat's shares. Owning U.S. Treasury notes helps China's economy grow. I'm a reporter for Forbes' explainers and trends team. 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. The rest of the $29 trillion national debt is owned by either people in the U.S. or by the U.S. government itself. While some states have strict laws in place, others are more open to foreign investments. This has been common practice for many countries ever since the Bretton Woods Conference in 1944. 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. 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. WH Group is a publicly-traded company with shareholders around the world. "Under China's Communist Party dictatorship, private companies are forced to bend to the government's will," the report states. China has become one of the largest economies in the world. And its findings may be surprising to some. 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. "Frequently Asked Questions About the Public Debt. According to the data, the value of foreign-owned American assets climbed to $32.5 trillion in the second quarter, while total foreign assets held by. "Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022." By June 2017, the debt had grown to $19.8 trillion and was projected to top $20 trillion by January 2018. Is it better to pay off credit card or pay down? (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. ThoughtCo, Sep. 2, 2021, thoughtco.com/how-much-debt-does-china-own-3321769. If China ever did call in its debt, it slowly would begin selling off its Treasury holdings. China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. What is the best way to liquidate stocks? companies.". Maxwell said that poses a big risk with an older generation of farmers set to exit the industry. Most countries want their currency values to fall so they can win global currency wars. Over 40 percent of the additional 3.4 million acres acquired by foreign investors in 2019 was located in Texas, Oklahoma, and Colorado. U.S. Department of the Treasury. 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. "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. What Would Happen if China Were to Call In Its Debt? Total number of residential properties bought by Chinese buyers in the U.S. 2010-21. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. Q2: What threats do foreign acquisitions of U.S. farmland pose? Walmart Inc. is the largest retailer in the world and one of the five largest corporations in the world by sales. Mutual Fund and ETF data provided by Refinitiv Lipper. On a dollar-value basis, total manufacturing imports from Mexico to the U.S. increased 10% between 2017 and 2018, from $278 billion to . Of the 109 countries that own U.S. agricultural land, China ranks No. It is responsible for lower interest rates and cheap consumer goods. "Debt Position and Activity Report, June 2022," Page 1. "In 2017, the United States produced zero rare earth minerals. Accessed March 04, 2023. https://www.statista.com/statistics/611020/total-number-of-properties-purchased-by-chinese-buyers-in-the-us/. This helps China hold down the cost of its exported goods, which tends to make China, like any nation, a stronger performer in international trade. Dalian Wanda purchased a majority stake in AMC for $2.6 billion, making AMC the largest theater operator at the time, according to a report from Reuters. However, the items are Manufactured and Assembled in China, with Foxconn, a Taiwanese-based firm, producing the majority of Apple's products. The coronavirus pandemicmay have shed light on China'sinfluence in America over the supply chain,including life-saving medicines, technologyand equipment. Christmas in Mainland China is not a public holiday and is not related to religion at all. The total has grown by an average 2.3 million acres per year since 2015, according to USDA data. These investments artificially increase the value of that land, which then denies young and beginning farmers opportunities to farm.. China also became the world's biggest exporter in 2009. As a result, the public does not have a complete picture of which foreign entities own how much U.S. farmland or what the land is being used for. Japanese-owned debt doesn't receive nearly as much negative attention as Chinese-owned debt, ostensibly because Japan is seen as a friendlier nation and the Japanese economy hasn't grown as fast as China's year after year. 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. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. Mutual Fund and ETF data provided by Refinitiv Lipper. 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. Because of varying maturities dates, China would be unable to call in all its Treasury holdings at once. That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. China is taking steps to make its currency, the yuan, transition to a global currency. "Debt Position and Activity Report, June 2017," Page 1. Additionally, China is seeking to build 5G networks in the United States and other Western countries, which could potentially feed personal information and sensitive data to the Chinese Communist Party. Currently, you are using a shared account. What Is the Public Debt, and When Is It Too High? In 2019, 49 percent of reported foreign-held acreage in the United States was forest land, while 25 percent was crop land, 24 percent was for pasture and other agricultural uses, and 2 percent was for non-agricultural uses (such as homesteads and roads). (July 18, 2022). For example, in water-scarce regions like the Southwest, outside use of freshwater resources can affect water availability for local farms and communities. Why China Buys U.S. Debt With Treasury Bonds, A Look at National Debt and Government Bonds, National Debt: Definition, Impact, Key Drivers, Current U.S. Debt, 2020 Election: The Key Economic Issues Explained. In 2011, the total U.S. debt stood at $14.3 trillion. Congress can then increase the federal spending that spurs U.S. economic growth. This amount is subject to market fluctuations. The economy of China is driven by manufacturing and exporting. Advocacy groups like the National Family Farm Coalition argue that the larger threat to national security is corporate capture of U.S. land resources, whether those corporations are U.S.- or foreign-owned. US PHARMACEUTICAL INDUSTRY AIMS TO WREST SOME DRUG PRODUCTION BACK FROM CHINA. On Friday, Starwood Hotels agreed to be acquired by Anbang, a Chinese insurance company that is rapidly buying up U.S. hotels, for over $13 billion . (ChinaOwnsUs campaign). Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). Research Associate, Global Food Security Program. While many politicians like to angrily proclaim that China owns the United States because it owns so much of the U.S. debt, economists say that claim is far more rhetoric than fact. While such purchases in low- and middle-income countries have been coveredextensively, they also happen here in the United States. 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. RT @lillybug000: How much more does any American have to see to realize our government is owned by China. 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. Milos Maricic, an international affairs expert and World Economic Forum contributor, concurred that while China owns close to $150 billion in U.S. companies not particularly huge in comparison to the U.S. economy there is a lot about the available figure that we simply do not know. Stephen Gandel. Pallets of sod cover part of the 230 acre Kuenzi Turf & Nursery on June 2, 2021 in Salem, Oregon. 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. It's politically popular to say that the Chinese "own the United States" because they are such a huge creditor. 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. Countries Who Own The Most Acres U.S. What US companies are now owned by China? In Texas, a Chinese based energy company purchased more than 130,000 acres of land near Laughlin Air Force Base and is now attempting to build a wind farm to access the U.S. power grid. The 2011 U.S. Debt Ceiling Crisis was a contentious debate on the borrowing limit of the United States government in July 2011. That data also shows that the. "The Chinese have a strong foothold here in the U.S., and Chinese firms have access to what seems like infinite government lending, and because the country's goal of world dominance is ingrained into the minds of their business leaders," explained Paul Murad, president of Nevada-based real estate firm Metroplex. Robert Longley is a U.S. government and history expert with over 30 years of experience in municipal government and urban planning. Congressional Research Service. The Chinese government uses U.S. dollars it has on hand to buy Treasurys. The other countries that hold the most U.S. debt include the U.K., with $634 billion owed; Switzerland, holding $294.1 billion in debt securities; and the Cayman Islands, slightly behind Switzerland with $293.2 billion of the United States' debt. and Caitlin Welsh. TreasuryDirect. From 2016, the estimates include only residential transactions. But, exactly how much does the nation own? Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. When this land changes hands, theyre going to gobble it up, he said of foreign buyers. The current trend in the U.S. is leading us toward the creation of a Chinese-owned agricultural land monopoly, Rep. Dan Newhouse (R-Wash.) warned during a recent House Appropriations hearing. The company was founded in Smithfield, Virginia, in 1936 and was acquired by Hong Kong-based WH Group in 2013. The Senate Bill is being reviewed by the Committee on Banking, Housing and Urban Affairs. Chinese buyers comprise one of the largest groups of foreign buyers of residential property in the United States. The remaining 38 percent is held by entities from almost a hundred other countries. Longley, Robert. In 2021, Chinese buyers bought 6,300 U.S. properties worth 4.5 billion U.S. dollars. 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.. Discover the current debt ceiling and its economic impact. Every year since 2010, China has held more than $1 trillion in U.S. debt. 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. The resulting loss of export business would lead to a major unemployment crisis in China.
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