Columbia International Affairs Online: Working Papers

CIAO DATE: 07/2009

China's $1.5 Trillion Bet: Understanding China's External Portfolio

Brad W. Setser, Arpana Pandey

May 2009

Council on Foreign Relations


China is now by far the United States' largest creditor. Its treasury portfolio recently surpassed that of Japan's, and it has long held more agency (Fannie Mae, Freddie Mac) bonds than any other country. Never before has a nation as poor as China provided so much financing to a country as rich as the United States. In this Center for Geoeconomic Studies Working Paper, Brad W. Setser and Arpana Pandey estimate the true scale of China's U.S. portfolio and examine how the pace of growth and composition of China's portfolio have evolved over time.