United States Creditors
Reading the article titled Debt Burden Now Rests More on U.S. Shoulders in the Jan. 22 edition of the New York Times, it states that China, while still the States' largest creditor, significantly decreased its investment in the U.S. China held $728 billion of Treasury securities at the end of 2008, and invested $62 billion through Nov. 2009, which accounts for less than five percent of the money borrowed this past year by the U.S. treasury. What is interesting is that in 2008, China bought 20.2 percent of the U.S. debt. However, in 2009, they were projected to invest only 4.6 percent in U.S. treasuries. Why is there such a large change in spending? Has China found an alternative investment option, or are they worried about the massive U.S. spending increases? ITG chief economist Robert Barbera says that China is focused on keeping their currency value low compared to the U.S. dollar, and they needed to buy fewer treasuries to do so. It is possible that is the case, but there could be more appealing options for the Chinese.