Currently, China's total debt stands at around $47.5 trillion, which is less than the US's near $70 trillion. Notably, China holds the largest share of non-financial corporate debt globally, at 28%. Both China and the U.S. are among the countries with the highest debt-to-GDP ratios.
This year, U.S. government debt is expected to reach 121 percent of GDP, compared to 90.1 percent of GDP in China and 82.7 percent of GDP in the EU.
The Federal Reserve System was the largest domestic holder of U.S. public debt, with holdings of $5.24 trillion. Debt held by the public represents the amount borrowed by the U.S. Treasury from external lenders via financial markets to fund government operations.
Investors in Japan and China hold significant shares of U.S. public debt. Together, as of December 2023, they accounted for nearly $2 trillion, or about 7 percent of DHBP. While China's holdings of U.S. debt have declined over the past decade, Japan's purchases of U.S. Treasury securities remain comparable.
Given the significance of oil in today's world, Saudi Arabia produces enough oil and earns enough revenue to maintain a high GDP and additionally refrain from incurring debt.
Who owns the most U.S. debt? Around 70 percent of U.S. debt is held by domestic financial actors and institutions in the United States. U.S. Treasuries represent a convenient, liquid, low-risk store of value.
Which country owes the most debt to China? Pakistan owes the most debt to China, totaling $26.6 billion. This debt primarily funds infrastructure and energy projects, making repayment particularly challenging due to commercial interest rates.
Federal Borrowing
The federal government borrows money from the public by issuing securities—bills, notes, and bonds—through the Treasury. Treasury securities are attractive to investors because they are: Backed by the full faith and credit of the United States government.
Eliminating the U.S. government's debt is a Herculean task that could take decades. In addition to obvious steps, such as hiking taxes and slashing spending, the government could take a number of other approaches, some of them unorthodox and even controversial.
On the other hand, Mexico holds about $34B of US debt. So if we were to make a balance, Mexico owes the US $134B, more or less, or about 8% of what it makes in a year.
Luxembourg is the world's wealthiest country, with a GDP per capita of $143,742 thousand, according to the IMF.
Today, our deficits are caused mainly by predictable structural factors: our aging baby-boom generation, rising healthcare costs, and a tax system that does not bring in enough money to pay for what the government has promised its citizens. And the more we borrow, the more we pay in interest on that debt.
It held more than $1.146 billion in U.S. Treasuries, almost 20 per cent of the amount held by all foreign governments. Beijing is now the second-largest foreign holder of U.S. debt, with a claim of around $816 billion.
As a result, Japan retained its position as the world's top creditor, followed by Germany with 454.8 trillion of net external assets and China with 412.7 trillion yen as of the end of 2023, according to the ministry.
In 1952, the London Agreement on German External Debts assessed the final reparation figure at $3 billion. Germany has yet to pay off its debts for World War II. At this point, it's difficult to determine how much money they still owe after years of inflation and interest.
If China (or any other nation that has a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.
Annual totals are based on data from April of each year. Inflation adjusted to the 2023 calendar year. As of April 2024, the five countries owning the most US debt are Japan ($1.1 trillion), China ($749.0 billion), the United Kingdom ($690.2 billion), Luxembourg ($373.5 billion), and Canada ($328.7 billion).
U.S. companies make up 60.13% of the $10.8 trillion owed by the top 100 global companies in debt. Toyota holds the title of the world's most indebted company outside the financial industries, with a debt of $221.13 billion.