U.S . Discover the current debt ceiling and its economic impact. U.S. companies with Chinese shareholders more than doubled their acreage that year, accounting for 102,000 acres of the growth. 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. Other top investors are American-based companies, including Vanguard Group Inc. Apple Inc USA is an American Company that was founded in Cupertino, California. "China's Gold Market: Progress and Prospects," Page 2. With most forms of U.S. debt, like Treasury bills, redeemable in U.S. dollars, worldwide trust in the dollar and the U.S. economy, in general, remains Chinas main safeguard for the yuan. In simpler terms, the government wrote itself a really big IOU and bankrupted one account to finance another activity. However, the concept of foreign debt carries a negative connotation, especially when it concerns large amounts owed to nations embroiled in controversy. They hold 50% of total shares through Walton Enterprises LLC and Walton Family Holdings Trust. 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. Secondly, China needs American markets to buy their exported goods. Subsequently, China and other international players would be obligated to accede to an audit that can be reviewed by the nonprofit Public Company Accounting Oversight Board, which oversees audits of all U.S. companies that endeavor to raise money in public markets. The United States currently produces more than enough food per capita, even after adjusting for food waste. 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. The company was founded in Smithfield, Virginia, in 1936 and was acquired by Hong Kong-based WH Group in 2013. The Pentagon released a list of 20 companies that it says are owned or controlled by Communist China's military and operate in the US - including tech giant Huawei, according to a report. The USDA reports that the changes in pasture and crop land holdings since 2009 were mostly due to foreign-owned wind companies signing or terminating long-term leases. How many times does Coca Cola pay dividends? Federal Reserve Bank of St. Louis. The average American is made better off by foreigners providing inexpensive services and only demanding pieces of paper in return. China has become one of the largest economies in the world. All rights reserved. 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. How Did the U.S. National Debt Get So Big? What Would Happen if China Were to Call In Its Debt? The remaining 38 percent is held by entities from almost a hundred other countries. It allows the U.S. Treasury to borrow more at low rates. We are new in this process, said Rep. Sanford Bishop (D-Ga.), chair of the agriculture appropriations subcommittee. Are you interested in testing our business solutions? China, on the other hand, accounted for more than 80 percent of the world's supply," the report stated. 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 first and most important is that China wants its currency, the yuan, pegged to the dollar. Congressional Research Service. In a vicious cycle, they sell the U.S. dollars they receive through exports to get renminbi, which increases the supply of U.S. dollars and raises the demand for renminbi, to the point that the renminbi ranked as the eighth most traded currency in the world as of 2019. Its a massive undertaking to verify who really owns [the land], Maxwell said. "Total Number of Residential Properties Purchased by Chinese Buyers in The United States from 2010 to 2022. Focusing narrowly on land purchases by Chinese companies or other foreign entities will not address the full scope of this problem. In fact, research firm Gartner revealed last year that a third of supply chain leaders had plans to move at least some of their manufacturing out of China before 2023. 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. 2023 FOX News Network, LLC. ", National Association of Realtors, Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022 Statista, https://www.statista.com/statistics/611020/total-number-of-properties-purchased-by-chinese-buyers-in-the-us/ (last visited March 04, 2023), Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022 [Graph], National Association of Realtors, July 18, 2022. Show publisher information 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. How much of the USA is owned by China? That changed with the USMCA. A dollar-pegged yuan helps keep down the cost of Chinese exports, which the Chinese government believes makes it stronger in international markets. How much of Chinese industry is state-owned? Legal Statement. Chinese lenders snap up so much of the U.S. debt for one basic economic reason: protecting its dollar-pegged yuan. Historically, between 20,000 and 40,000 residential properties were bought by. The debt-to-GDP ratio measures the proportion of a country's national debt to its gross domestic product. Center for Strategic and International Studies Anyone anywhere can purchase shares of WH Group on the Hong Kong Stock Exchange. 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. And if you measure it by gross domestic product (GDP) and consider purchasing power parity (PPP), China is seen as the worlds largest economy. 18, far behind No. Representative Grace Meng expressed concern that the amendment could fuel already rising anti-Asian hate, and the USDA and advocacy groups have pointed out that the USDA does not have the authority to intervene in private land deals. The Department of Agriculture requires foreign entities who buy U.S. agricultural land to file a report within 90 days disclosing what they bought. Longley, Robert. "Total number of residential properties purchased by Chinese buyers in the United States from 2010 to 2022." This is just a small part of the 30 . In May 2018, one Chinese yuan was worth about $0.16 U.S. dollar. How Much U.S. Debt Does China Really Own? 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. ", Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox. While their market shares may be different percentages (Amazon owns 39% of all US ecommerce sales, while Alibaba owns 58.2% of all retail ecommerce shares in China), they each dominate their respective countries in which they began. The Chinese government's theft of intellectual property has been an open secret for decades. The Senate Bill is being reviewed by the Committee on Banking, Housing and Urban Affairs. According to the International Monetary Fund (IMF), the only nation with no national debt is Macao SAR. 2 This amounts to more than 13% of the U.S. debt held overseas and about 3.2% of the United States' total debt load. 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. While some states have strict laws in place, others are more open to foreign investments. The hardware brand is a publicly-traded company that does not have a majority shareholder. The Communist Party has actively supported investments in foreign agriculture as part of its One Belt One Road economic development plans, aiming to control a greater piece of Chinas food supply chain. | The money flowing into agricultural real estate from other countries also makes it difficult for new farmers in the U.S. to afford land as outside buyers bid up prices. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Profit from additional features with an Employee Account. Walmart owns no shares. 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. That data also shows that the approximately 190,000 acres of farmland owned by Chinese interests has remained virtually unchanged since 2013. The extent of Chinese investment in recent years has also raised red flags around U.S. national security, particularly in the realm of rare earth minerals. WH Group is a publicly-traded company with shareholders around the world. To use individual functions (e.g., mark statistics as favourites, set WH Groups shareholders include many large U.S.-based financial institutions.". Powered and implemented by FactSet Digital Solutions. It's politically popular to say that the Chinese "own the United States" because they are such a huge creditor. Individuals can buy and sell U.S. debt, as can central banks for countries like China. At the same time, American consumers are assured of a steady flow of relatively inexpensive Chinese products and services. ", International Monetary Fund. United States Treasury Fiscal Data. | Photo by Nathan Howard/Getty Images. This compensation may impact how and where listings appear. 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. Is Americas Debt to China Really So Bad? Coronavirus-related sales slumps and supply chain disruption, as well as rising production costs, have also hastened the exodus. Photo: GUILLAUME SOUVANT/AFP via Getty Images, Critical Questions And its findings may be surprising to some. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). ", United States Department of Treasury. 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. The Chinese Investor owns about 14% of Snapchat's shares. However, the full extent of the Chinese investment as it stands in the U.S. today is far from transparent. (2022). China has steadily accumulated U.S. Treasury securities over the last few decades. This is the second reason the Chinese want Treasurys; they are essentially redeemable in dollars. 2 Which Country Owes the Most Money to China? How much of the U.S. land does China own? These foreign interests are pretty smart. Foreign entities buy agricultural land for a variety of reasons, such as food production, wind farming, carbon offsets, or speculative investments. ", Harvard Business Review. As a Premium user you get access to background information and details about the release of this statistic. Before June 2010, Treasury reports showed that China held about $843 billion in debt. Whether you're an American retiree or a Chinese bank, American debt is considered a sound investment. China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. Owning U.S. Treasury notes helps China's economy grow. 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. Many large corporations, pension funds, and wealthy individuals are investing in agricultural land in the United States and abroad. For example, the huge amount of debt that the U.S. government owes Chinese lenders has been the subject of countless debates, headline news stories, and political platforms for decades. The Global Food Security Program would also like to thank Aliza Lauter for her research contributions to this publication. If it were to call in its debt, U.S. interest rates and prices could rise, slowing U.S. economic growth. Each bill, bond, and note represents ownership in U.S. debt. On the other hand, if China were to call in its debt, the demand for the dollar could plummet. In 2016, HNA Group, Chinese aviation and shipping giant, bought a 25% stake for $6.5 billion. This statistic is not included in your account. This helps inflate the value of the dollar. "China's Currency Policy," Page 1. This material may not be published, broadcast, rewritten, or redistributed. The source adds the following information: "estimates from 2010 thru 2015 include some commercial transactions. Quotes displayed in real-time or delayed by at least 15 minutes. March 18, 2016, 2:10 PM. China produces 97 percent of U.S. antibiotics and about 80 percent of active pharmaceutical ingredients used in American drugs, giving the Chinese Communist Party absolute control of. What Is the Public Debt, and When Is It Too High? 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. 1616 Rhode Island Avenue, NW 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 could start this process only after it further expanded its exports to other Asian countries and increased domestic demand. Forbes. Countries Who Own The Most Acres U.S. 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. I'm a reporter for Forbes' explainers and trends team. Popular cinema company AMC, short for American Multi-Cinema, has been around for over a century and is headquartered in Leawood, KS. Gates is No. The House Bill is being reviewed by the Committee on Financial Services and the Committee on Agriculture. U.S. Department of the Treasury. Please do not hesitate to contact me. On a dollar-value basis, total manufacturing imports from Mexico to the U.S. increased 10% between 2017 and 2018, from $278 billion to . Agricultural Land: Facts, Figures, and an Assessment of Real Threats, Brzezinski Chair in Global Security and Geostrategy, Diversity and Leadership in International Affairs Project, Energy Security and Climate Change Program, Media Relations Manager, External Relations. They use different business structures to further conceal it.. Demand for dollar-denominated bonds raises the dollar value compared to that of the yuan. Washington, DC 20036. and Caitlin Welsh. Manuel Balce Ceneta/AP Photo. Consider what the current arrangement means: The Chinese buy up dollar bills in the form of Treasurys. That sounds like a lot of moneybecause it isbut it is actually a little less than the $1.24 trillion China-owned in 2011. 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. National Association of Realtors. U.S. consumers benefit from low consumer prices. For its part, China owned 191,000 acres worth $1.9 billion as of 2019. The US National Debt and How It Affects You. The other 189,000 acres were worth $235 million when purchased and are owned by 62 U.S. corporations with Chinese shareholders. Access to this and all other statistics on 80,000 topics from, Show sources information That's when the U.S. Department of the Treasury changed how it measures the debt. 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. 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. Still, thats less than farmland owned by people from other nations like Canada and European countries, which account for millions of acres each. Q4: What federal solutions are being discussed? The United States owes China approximately $980.8 billion as of May 2022. The rest of the $29 trillion national debt is owned by either people in the U.S. or by the U.S. government itself. World Gold Council. Interest on the National Debt and How It Affects You, US Debt by President: By Dollar and Percentage, US Budget Deficit by Year Compared to GDP, the National Debt, and Events, Chinas Economic Slowdown and How It Affects You, China's Economy and Its Effect on the U.S. Economy, China's Currency, the Yuan, and How It Affects You, How the Yuan Could Become a Global Currency, Debt Ceiling Dictionary: Your Guide to the Jargon, Major Foreign Holders of Treasury Securities, Report on Foreign Portfolio Holdings of U.S. Securities, Major Foreign Holders of Treasury Securities [2000-2020], Chinas Economic Rise: History, Trends, Challenges, and Implications for the United States. 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. 2023 Center for Strategic & International Studies. The manufacturing of smartphones and other household items is heavily reliant on China, which controls most of the rare earth minerals that make those items work. The government itself actually holds just under one-third, about $5 trillion, of the $19.8 trillion government debt in the form of trust funds dedicated to legislatively-mandated programs like Social Security, Medicare, and Medicaid and veterans benefits. Scrutiny of foreign-owned agricultural operations receiving taxpayer subsidies has also been rising in recent years after meatpacking conglomerates like the U.S. subsidiary of Brazilian-owned JBS received millions of dollars under the Trump administrations trade bailout starting in 2018. US President Joe Biden, King of Jordan II, for the "historic meeting" between Palestinians and Israelis in Aqaba. 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. Well, really, the hallmark has been an almost otherworldly disconnection from the actual affairs of the United States. And key Senate lawmakers have already shown interest in efforts to keep American farms in American hands. Food insecurity among U.S. families is primarily driven by poverty, not a lack of food. China's low-cost competitive strategy seems to be working. You need at least a Starter Account to use this feature. How much do banks charge to manage a trust? You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. Rep. Grace Meng, D-N.Y. speaks during a news conference on Capitol Hill, on May 27, 2020, in Washington. Japancommands the top spot among foreign creditors with $1.2 trillion4% of total U.S. debtowed by the U.S. government. China's economic growth has slowed over the years. China does not publish the figures on its international lending. Even at a slow pace, dollar demand would drop. In 2011, the total U.S. debt stood at $14.3 trillion. From May 2021 to May 2022, the debt to Japan and China decreased by 4% and 9%, respectively. Chinese billionaire and businessman Wang. A repurchase agreement is a form of short-term borrowing for dealers in government securities. Land grabbingwhen a government, company, or other entity purchases large swathes of land in another countrycan affect local land rights and agricultural production, sometimes putting local food security at risk. 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. That's a large portion of the $7.6 trillion in Treasury bills, notes, and bonds held by foreign countries. From 2016, the estimates include only residential transactions. The renewed focus on curbing foreign farm purchases comes as Biden and Agriculture Secretary Tom Vilsack roll out a series of actions to bolster the food supply chain, following major disruptions caused by the pandemic. [U]nder Xi Jinping, the Communist party has returned to being the ultimate authority in business," writes The Guardian. "GDP Growth (Annual %) - Japan, China.". 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. 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. Smithfield was also in line to receive money from the program, which was created to help U.S. farmers strung by trade retaliation from China and other competitors. Citing staff shortages, the Department of Agriculture didnt penalize foreign parties for violating reporting rules from 2015 to 2018, prompting 28 lawmakers to criticize the departments complete lack of accountability and oversight Monday in a letter obtained by the Wall Street Journal. For example, Chinese pharmaceutical companies supply 70 percent of the world's acetaminophen, commonly used in Tylenol. For these reasons, we'll likely see China remain one of the world's largest holders of U.S. national debt. What's the Difference? National Association of Realtors. 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. 6 Modern U.S. Presidents Who Raised the Debt Ceiling, Expansionary vs. The FARMForeign Adversary Risk Managementact, introduced in the House of Representatives and the Senate on January 25, would trigger a Department of Agriculture and Government Accountability Office investigation into foreign influence on Americas agriculture industry. No, China does not own Walmart. A2: On a large scale, these acquisitions do not represent a substantial enough portion of food production in the United States to threaten national food security. Definition and Impact. Its also a small percentage of the nearly 900 million acres of total American farmland. Definition and Analysis, What Is National Debt and Where It Fits Within the Economy, Alexander Hamilton and the National Economy, The History of US Government Financial Bailouts, What Was the Open Door Policy in China? Most countries want their currency values to fall so they can win global currency wars. Foreign ownership of U.S. agricultural land doubled from 2009 to 2019, according to U.S. Department of Agriculture (USDA) records, and policymakers have become increasingly concerned about foreign control of the U.S. food supply. This Treasury-led change makes it difficult to make long-term comparisons. "Frequently Asked Questions About the Public Debt. 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 . 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. Nonagricultural land (such as homesteads and roads) accounted for 2%. Haier bought GE for $5.4 billion, a recording breaking sum at that time. Q1: Where and why are foreign entities purchasing farmland in the United States? Agricultural Land. As it is not known exactly how much US land is owned by China. Of the 109 countries that own U.S. agricultural land, China ranks No. Can you rollover Roth 401k to Roth IRA while still employed? As of the start of 2020, Chinese investors owned about 192,000 acres of U.S. agricultural land valued at about $1.9 billion, according to Politico. If you are an admin, please authenticate by logging in again. Read our.
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