{
  "id": "RL34314",
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      "id": 423449,
      "date": "2013-08-19",
      "retrieved": "2016-04-06T23:18:33.350969",
      "title": "China\u2019s Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "Given its relatively low savings rate, the U.S. economy depends heavily on foreign capital inflows from countries with high savings rates (such as China) to meet its domestic investment needs and to fund the federal budget deficit. The willingness of foreigners to invest in the U.S. economy and purchase U.S. public debt has helped keep U.S. real interest rates low. However, many economists contend that U.S. dependency on foreign savings exposes the U.S. economy to certain risks, and some argue that such low-cost capital inflows were a contributing factor to the U.S. housing bubble and subsequent global financial crisis that began in 2008. \nChina\u2019s policy of intervening in currency markets to limit the appreciation of its currency against the dollar (and other currencies) and large current account surpluses have made it the world\u2019s largest and fastest growing holder of foreign exchange reserves, especially dollar-denominated assets. China has invested a large share of these reserves in U.S. private and public securities, which include long-term (LT) Treasury debt, LT U.S. agency debt, LT U.S. corporate debt, LT U.S. equities, and short-term debt. As of June 2012, China was the second largest holder of U.S. securities (after Japan) at nearly $1.6 trillion (down from $1.7 trillion as of June 2011). U.S. Treasury securities constitute the largest category of China\u2019s holdings of U.S. securities\u2014these totaled nearly $1.3 trillion as of June 2013. \nChina\u2019s large holdings of U.S. securities have raised a number of concerns in both China and the United States. For example, in 2009, (then) Chinese Premier Wen Jiabao stated that he was \u201ca little worried\u201d about the \u201csafety\u201d of China\u2019s holdings of U.S. debt. The sharp debate in Congress over raising the public debt ceiling in the summer of 2011 and the subsequent downgrade of the U.S. long-term sovereign credit from AAA to AA + by Standard and Poor\u2019s in August 2011 appears to have intensified Chinese concerns. In addition, Chinese officials have criticized U.S. fiscal and monetary policies, such as quantitative easing by the U.S. Federal Reserve, arguing that they could lead to higher U.S. inflation and/or a significant weakening of the dollar, which could reduce the value of China\u2019s U.S. debt holdings in the future. Some Chinese analysts have urged the government to diversify its reserves away from U.S. dollar assets, while others have called for more rapid appreciation of China\u2019s currency, which could lessen the need to hold U.S. assets. \nSome U.S. policymakers have expressed concern over the size of China\u2019s holdings of U.S. government debt. For example, some contend that China might decide to sell a large share of its U.S. securities holdings, which could induce other foreign investors to sell off their U.S. holdings as well, which in turn could destabilize the U.S. economy. Others argue that China could use its large holdings of U.S. debt as a bargaining chip in its dealing with the United States. Other U.S. policymakers contend that China\u2019s holdings of U.S. debt give it little leverage over the United States, because as long as China continues to hold down the value of its currency to the U.S. dollar, it will have few options other than to keep investing in U.S. dollar assets. A Chinese attempt to sell a large portion of its dollar holdings could reduce the value of its remaining dollar holdings, and any subsequent negative shocks to the U.S. (and global) economy could dampen U.S. demand for Chinese exports. They contend that the main issue for U.S. policymakers is not China\u2019s large holdings of U.S. securities per se, but rather the high U.S. reliance on foreign capital in general, and whether such borrowing is sustainable. This report examines China\u2019s holdings of U.S. securities and its implications on the U.S. economy and U.S.-China relations.",
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      "source": "University of North Texas Libraries Government Documents Department",
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      "id": "RL34314_2012Dec06",
      "date": "2012-12-06",
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      "title": "China's Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China's investment in U.S. securities, as well as the policy implications of its holdings for both the United States and China.",
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          "id": "Foreign policy",
          "name": "Foreign policy"
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      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc810383/",
      "id": "RL34314_2011Sep26",
      "date": "2011-09-26",
      "retrieved": "2016-03-19T13:57:26",
      "title": "China\u2019s Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China\u2019s investment in U.S. securities, as well as the policy implications of its holdings for both the United States and China.",
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          "id": "Foreign relations -- U.S. -- China",
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      "id": "RL34314_2009Jul30",
      "date": "2009-07-30",
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      "title": "China's Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China's investment in U.S. securities, as well as U.S. concerns over the possibility that China might unload a large share of those holdings, the likelihood that this would occur, and the potential implications such action could have for the U.S. economy. The report concludes that a large sell-off of Chinese Treasury securities holdings could negatively affect the U.S. economy, at least in the short-run.",
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          "id": "International finance",
          "name": "International finance"
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      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc463389/",
      "id": "RL34314_2009Jan13",
      "date": "2009-01-13",
      "retrieved": "2014-12-05T09:57:41",
      "title": "China's Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China's investment in U.S. securities, as well as U.S. concerns over the possibility that China might unload a large share of those holdings, the likelihood that this would occur, and the potential implications such action could have for the U.S. economy. The report concludes that a large sell-off of Chinese Treasury securities holdings could negatively affect the U.S. economy, at least in the short-run. As a result, such a move could diminish U.S. demand for Chinese products and thus could lower China's economic growth as well.",
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      "source": "University of North Texas Libraries Government Documents Department",
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      "id": "RL34314_2008Nov20",
      "date": "2008-11-20",
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      "title": "China\u2019s Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China\u2019s investment in U.S. securities, as well as U.S. concerns over the possibility that China might unload a large share of those holdings, the likelihood that this would occur, and the potential implications such action could have for the U.S. economy. The report concludes that a large sell-off of Chinese Treasury securities holdings could negatively affect the U.S. economy, at least in the short-run. As a result, such a move could diminish U.S. demand for Chinese products and thus could lower China\u2019s economic growth as well. The issue of China\u2019s large holdings of U.S. securities is part of a broader question that has been raised by many economists: What are the implications of the heavy U.S. reliance on foreign investment to maintain healthy economic growth and to finance the budget deficit?",
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      "id": "RL34314_2008Oct02",
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      "title": "China's Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China's investment in U.S. securities, as well as U.S. concerns over the possibility that China might unload a large share of those holdings, including the likelihood that this would occur, and the potential implications such action could have for the U.S. economy. The report concludes that a large sell-off of Chinese Treasury securities holdings could negatively affect the U.S. economy, at least in the short-run. As a result, such a move could diminish U.S. demand for Chinese products and thus could lower China's economic growth as well.",
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      "id": "RL34314_2008Jan09",
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      "title": "China\u2019s Holdings of U.S. Securities: Implications for the U.S. Economy",
      "summary": "This report examines the importance to the U.S. economy of China\u2019s investment in U.S. securities, as well as U.S. concerns over the possibility that China might unload a large share of those holdings, the likelihood that this would occur, and the potential implications such action could have for the U.S. economy.",
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          "id": "Foreign economic relations -- U.S. -- China",
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          "id": "Global securities market",
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  "topics": [
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}