The anti-China commercial by Michigan Republican Pete Hoekstra contained so many mistakes, it takes a row of experts to set the record straight. In The New Yorker financial expert Victor Shih looks at the suggestions China is running away with US money.
Evan Osnos at The New Yorker:
Chinese holdings of U.S. treasury bonds, in fact, declined from November of 2010 to November 2011. “China has not been a major buyer of U.S. treasury notes on the margin for a couple of years now,” Victor Shih, an expert on Chinese economics and politics at Northwestern University, told me…
When Hoekstra’s point collides with fact, he calls in the help of a large font: he describes China as “the largest foreign holder of U.S. Treasury securities”—which is true—but then describes China’s holdings as increasing from 9.6 per cent in 2002 to twenty-six per cent in 2010. A voter might blanch at the idea of a foreign country holding over a quarter of U.S. Treasury debt, except that it’s not true. The twenty-six per cent is China’s holdings among foreign holders, not overall debt, and “the overall share of treasury held by foreign entities declined in the past couple of years,” Shih told me. (“One thing that Americans have to realize is that China may be a net lender internationally, but the Chinese government and state-owned enterprises borrow a huge amount of money domestically,” Shih added. “The racist caricature of those thrifty Chinese who take advantage of debt-loving Americans is widely off the mark because China is one of the most indebted countries in the world.”)
Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
More on Victor Shih and China’s debts at Storify.
- Most sought-after speakers November 2011 (chinaspeakersbureau.info)
- If China helps Europe, only behind the scenes – Victor Shih (chinaherald.net)
- More land sales needed to repay debts – Victor Shih (chinaspeakersbureau.info)
- If China helps Europe, only behind the scenes – Victor Shih (chinaspeakersbureau.info)