The debt limit ceiling showdown has led to a lot of questions about who’s buying our debt. China’s role in U.S. bond purchases, in particular, is a cause of confusion.
Holding about $1.1 trillion of the $9.6 trillion U.S debt held by the public, China is the largest foreign owner of U.S. debt (it’s also possible that China holds more U.S. debt through intermediaries, but how much more is not known). Foreign purchases of U.S. bonds, though, are only about half of all purchases.
This chart shows the composition, as of September 2010 (the most recent Treasury Department release of such information) of the ownership of U.S. Treasury securities (total public debt outstanding):
As the chart shows, the Fed and other branches of the U.S. government — the blue bars –own more of the debt than any other entity — almost 40 percent, more than all foreigner creditors combined — the red bars — including China.
Veronique de Rugy created a similar chart, excluding intragovernmental debt:
This wikimedia chart breaks down the foreign owners of the debt, showing how much China is responsible for: