Question

C. calculate the dollar value of us bonds held by the chinese government. explain how you determined your answer. identify the relationship between financial inflows and outflows for each country ( ____/5)

Answer 1

Japan and China are the largest foreign holders of US debt. By January 2018, China held $1.17 trillion of US debt, which is a lot of money. But it has decreased to $1.1 trillion by January 2020 (still is a lot of money).

Current American national debt is approximately $23.4 trillion, so China's share is almost 5%. Currently only Japan owns more national debt than China, with $1.17 trillion approximately.

What both countries have in common is that the US has a trade deficit with them. Logically we can assume that countries that have high trade surpluses with the US, will also have large amounts of US securities. Both China and Japan benefit from trading with the US and instead of taking money, they take home US securities. The financial outflow to those countries is larger than the financial inflow from those countries.

Answer 2

The Chinese government holds $200 of U.S. bonds.

Step-by-step explanation:

LThe Chinese government holds $200 of U.S. bonds. This is so because of payments must the same to each other and since the U.S spent a total of $2,100 and the Chinese as we can see also spent a total of $1,900 with the bonds not been included, getting the difference between them American and Chinese bond ($2,100-$1,900) which is $200.Financial Account for U.S =$200 and the Financial Account for Japan=$800 For the U.S., it is more money coming in than out so it has a $600 Financial account Surplus. China has a $600 outflow or money going out, for this reason China will be the one having a deficit in its financial account.