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Which Countries Own the Most U.S. Debt?

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Foreign Countries Holding the Most U.S. Debt

The Foreign Countries Holding the Most U.S. Debt

In the international finance system, U.S. debt can be bought and held by virtually anyone.

In fact, if you hold a U.S. Treasury bond or a T-Bill in your portfolio right now, you are already a creditor to the United States government.

And as you can see in today’s chart from HowMuch.net, foreign countries like China and Japan can also accumulate large positions in U.S. Treasurys, making them significant players in the overall United States debt pie.

U.S. Debt: The Big Picture

The United States federal debt currently sits at $22 trillion, and it’s held by a range of domestic and foreign investors.

EntityDebt HoldingsShare of Total
Total$21.97 trillion100.0%
U.S. Government and Federal Reserve$8.1 trillion36.8%
Foreign and international$6.3 trillion28.5%
Mutual funds$2.06 trillion9.4%
Pension funds$0.92 trillion4.2%
Banks$0.77 trillion3.5%
State and local governments$0.69 trillion3.1%
Other investors$3.18 trillion14.5%

As you can see, about $8.1 trillion of debt is held by departments of the U.S. government or the Federal Reserve. This number would include securities sitting in retirement accounts of federal employees, social security trust funds, or any of the Treasurys sitting on the Fed’s balance sheet.

Next, another $7.6 trillion of debt is held by domestic investors. These are marketable securities held by banks, mutual funds, pension funds, insurance companies, and other investors.

While debt held domestically is mostly uninteresting, a bigger question mark is the $6.3 trillion of debt that is owned by foreign countries. After all, couldn’t a country like China “weaponize” its large holdings of Treasury securities as a form of retaliation in the ongoing trade war?

Foreign Owners of the Debt

Internationally, the biggest owners of debt include China and Japan, each with over $1 trillion.

RankCountryU.S. Debt HoldingsPercentage of Foreign U.S. Debt Held (%)
#1๐Ÿ‡จ๐Ÿ‡ณ China$1.11 trillion17.3%
#2๐Ÿ‡ฏ๐Ÿ‡ต Japan$1.06 trillion16.5%
#3๐Ÿ‡ง๐Ÿ‡ท Brazil$307 billion4.8%
#4๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$301 billion4.7%
#5๐Ÿ‡ฎ๐Ÿ‡ช Ireland$270 billion4.2%
#6๐Ÿ‡จ๐Ÿ‡ญ Switzerland$227 billion3.5%
#7๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg$224 billion3.5%
#8๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands$217 billion3.4%
#9๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$206 billion3.2%
#10๐Ÿ‡ง๐Ÿ‡ช Belgium$180 billion2.8%
#11๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia$177 billion2.8%
#12๐Ÿ‡น๐Ÿ‡ผ Taiwan$171 billion2.7%

Why does China hold so much of the foreign-owned U.S. debt?

China has accumulated Treasury securities over decades, as part of its strategy to keep its domestic currency from strengthening. Interestingly, the export-heavy nation has reduced its swath of Treasurys in recent months, selling off close to $200 billion of them.

Treasury Holdings China vs. Japan

Although China has $1.11 trillion of Treasurys left in reserve, the general consensus is that dumping all of them at once would destabilize the global financial system, having an equally negative effect on China as well.

That said, with foreign nations holding U.S. debt, such a risk will always exist.

Gimme Shelter

While it’s not surprising to see countries like China, Japan, or Brazil on the list of top foreign debt holders, what are places like the Cayman Islands, Luxembourg, or Ireland doing on the list?

Two simple facts help to explain these anomalies.

Firstly, despite having a population of just 60,000 people, the Cayman Islands is a hedge fund capital with over 10,000 funds domiciled there. Luxembourg makes the list for similar reasons, given that it is the European-based tax shelter equivalent.

Ireland, on the other hand, is the overseas headquarters for many U.S.-based tech giants like Facebook or Alphabet. Apparently, these corporations like to hold their overseas profits in highly-liquid Treasurys, rather than paying a repatriation tax to bring the cash back to American soil.

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Markets

The World’s 20 Most Profitable Companies

Saudi Aramco, the state oil producer in Saudi Arabia, rakes in $304 million of profit per day – putting it atop the list of the world’s most profitable companies.

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The World’s 20 Most Profitable Companies

The biggest chunk of the earnings pie is increasingly split by fewer and fewer companies.

In the U.S. for example, about 50% of all profit generated by public companies goes to just 30 companies โ€” back in 1975, it took 109 companies to accomplish the same feat:

YearNumber of Firms Generating 50% of EarningsTotal Public Companies (U.S.)Portion (%)
19751094,8192.2%
2015303,7660.8%

This power-law dynamic also manifests itself at a global level โ€” and perhaps it’s little surprise that the world’s most profitable companies generate mind-bending returns that would make any accountant blush.

Which Company Makes the Most Per Day?

Today’s infographic comes to us from HowMuch.net, and it uses data from Fortune to illustrate how much profit top global companies actually rake in on a daily basis.

The 20 most profitable companies in the world are listed below in order, and we’ve also broken the same data down per second:

RankCompanyCountryProfit per DayProfit Per Second
#1Saudi Aramco๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia$304,039,726$3,519
#2Apple๐Ÿ‡บ๐Ÿ‡ธ United States$163,098,630$1,888
#3Industrial & Commercial Bank of China๐Ÿ‡จ๐Ÿ‡ณ China$123,293,973$1,427
#4Samsung Electronics๐Ÿ‡ฐ๐Ÿ‡ท South Korea$109,301,918$1,265
#5China Construction Bank๐Ÿ‡จ๐Ÿ‡ณ China$105,475,068$1,221
#6JPMorgan Chase & Co.๐Ÿ‡บ๐Ÿ‡ธ United States$88,969,863$1,030
#7Alphabet๐Ÿ‡บ๐Ÿ‡ธ United States$84,208,219$975
#8Agricultural Bank of China๐Ÿ‡จ๐Ÿ‡ณ China$83,990,411$972
#9Bank of America Corp.๐Ÿ‡บ๐Ÿ‡ธ United States$77,115,068$893
#10Bank of China๐Ÿ‡จ๐Ÿ‡ณ China$74,589,589$863
#11Royal Dutch Shell๐Ÿ‡ฌ๐Ÿ‡ง ๐Ÿ‡ณ๐Ÿ‡ฑ UK/Netherlands$63,978,082$740
#12Gazprom๐Ÿ‡ท๐Ÿ‡บ Russia$63,559,178$736
#13Wells Fargo๐Ÿ‡บ๐Ÿ‡ธ United States$61,350,685$710
#14Facebook๐Ÿ‡บ๐Ÿ‡ธ United States$60,580,822$701
#15Intel๐Ÿ‡บ๐Ÿ‡ธ United States$57,679,452$668
#16Exxon Mobil๐Ÿ‡บ๐Ÿ‡ธ United States$57,095,890$661
#17AT&T๐Ÿ‡บ๐Ÿ‡ธ United States$53,068,493$614
#18Citigroup๐Ÿ‡บ๐Ÿ‡ธ United States$49,438,356$572
#19Toyota Motor๐Ÿ‡ฏ๐Ÿ‡ต Japan$46,526,027$538
#20China Development Bank๐Ÿ‡จ๐Ÿ‡ณ China$45,874,795$531

The Saudi Arabian Oil Company, known to most as Saudi Aramco, is by far the world’s most profitable company, raking in a stunning $304 million of profits every day. When translated to a more micro scale, that works out to $3,519 per second.

You’ve likely seen Saudi Aramco in the news lately, though for other reasons.

The giant state-owned company has been rearing to go public at an aggressive $2 trillion valuation, but it’s since delayed that IPO multiple times, most recently stating the listing will take place in December 2019 or January 2020. Company-owned refineries were also the subject of drone attacks last month, which took offline 5.7 million bpd of oil production temporarily.

Despite these challenges, Saudi Aramco still stands pretty tall โ€” after all, such blows are softened when you churn out the same amount of profit as Apple, Alphabet, and Facebook combined.

Numbers on an Annual Basis

Bringing in over $300 million per day of profit is pretty hard to comprehend, but the numbers are even more unfathomable when they are annualized.

RankCompanyCountryProfit
#1Saudi Aramco๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia$110,974,500,000
#2Apple๐Ÿ‡บ๐Ÿ‡ธ United States$59,531,000,000
#3Industrial & Commercial Bank of China๐Ÿ‡จ๐Ÿ‡ณ China$45,002,300,000
#4Samsung Electronics๐Ÿ‡ฐ๐Ÿ‡ท South Korea$39,895,200,000
#5China Construction Bank๐Ÿ‡จ๐Ÿ‡ณ China$38,498,400,000
#6JPMorgan Chase & Co.๐Ÿ‡บ๐Ÿ‡ธ United States$32,474,000,000
#7Alphabet๐Ÿ‡บ๐Ÿ‡ธ United States$30,736,000,000
#8Agricultural Bank of China๐Ÿ‡จ๐Ÿ‡ณ China$30,656,500,000
#9Bank of America Corp.๐Ÿ‡บ๐Ÿ‡ธ United States$28,147,000,000
#10Bank of China๐Ÿ‡จ๐Ÿ‡ณ China$27,225,200,000
#11Royal Dutch Shell๐Ÿ‡ฌ๐Ÿ‡ง ๐Ÿ‡ณ๐Ÿ‡ฑ UK/Netherlands$23,352,000,000
#12Gazprom๐Ÿ‡ท๐Ÿ‡บ Russia$23,199,100,000
#13Wells Fargo๐Ÿ‡บ๐Ÿ‡ธ United States$22,393,000,000
#14Facebook๐Ÿ‡บ๐Ÿ‡ธ United States$22,112,000,000
#15Intel๐Ÿ‡บ๐Ÿ‡ธ United States$21,053,000,000
#16Exxon Mobil๐Ÿ‡บ๐Ÿ‡ธ United States$20,840,000,000
#17AT&T๐Ÿ‡บ๐Ÿ‡ธ United States$19,370,000,000
#18Citigroup๐Ÿ‡บ๐Ÿ‡ธ United States$18,045,000,000
#19Toyota Motor๐Ÿ‡ฏ๐Ÿ‡ต Japan$16,982,000,000
#20China Development Bank๐Ÿ‡จ๐Ÿ‡ณ China$16,744,300,000

On an annual basis, Saudi Aramco is raking in $111 billion of profit per year, and that’s with oil prices sitting in the $50-$70 per barrel range.

To put this number in perspective, take a look at Chevron. The American oil giant is one of the 20 biggest companies on the S&P 500, but it generated just $15 billion in profit in 2018 and currently sits at a $221 billion market capitalization.

That puts Chevron’s profits at roughly 10% of Aramco’s โ€” and if Aramco does IPO at a $2 trillion valuation, that would put Chevron at roughly 10% of its market cap, as well.

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Cities

Mapped: The World’s Top 10 Cities in 2035

Cities are heavy hitters in the global economy. Where will the top 10 cities be in 2035โ€”based on GDP, population, and annual growth?

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Mapped: Where Will The Top 10 Cities Be in 2035?

Cities are the engines of the modern economy. Over half of the world now lives in urban areas, and urbanization continues to shape the trajectory of global growth in unprecedented ways.

However, the most important cities of today may be quite different than those leading the charge in the future. This week’s chart looks forward to 2035, using a report by Oxford Economics to forecast the top 10 cities by measures of economic size, population, and GDP growth rate.

Each map is categorized by one of these metricsโ€”and depending on which one you look at, the leaders vary greatly.

Top 10 Cities by Projected GDP

The top 10 cities by gross domestic product (GDP) in 2035 will be fairly widespread. Three cities are expected to be in the U.S.โ€”New York, Los Angeles, and Chicago. The Big Appleโ€™s forecasted $2.5 trillion GDP likely stems from its strong banking and finance sectors.

RankCityCountry2035 GDP
#1New York๐Ÿ‡บ๐Ÿ‡ธ United States$2.5T
#2Tokyo๐Ÿ‡ฏ๐Ÿ‡ต Japan$1.9T
#3Los Angeles๐Ÿ‡บ๐Ÿ‡ธ United States$1.5T
#4London๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$1.3T
#5Shanghai๐Ÿ‡จ๐Ÿ‡ณ China$1.3T
#6Beijing๐Ÿ‡จ๐Ÿ‡ณ China$1.1T
#7Paris๐Ÿ‡ซ๐Ÿ‡ท France$1.1T
#8Chicago๐Ÿ‡บ๐Ÿ‡ธ United States$1.0T
#9Guangzhou๐Ÿ‡จ๐Ÿ‡ณ China$0.9T
#10Shenzhen๐Ÿ‡จ๐Ÿ‡ณ China$0.9T

Four cities will be found in China, while London, Paris, and Tokyo are set to round out the last three. Interestingly, Tokyo is the #1 city today, with an estimated $1.6 trillion GDP in 2019.

Altogether, these top 10 cities will contribute an impressive $13.5 trillion in GDP by 2035. Clusters of such metropolitan areas are typically considered megaregionsโ€”which account for a large share of global economic activity.

Top 10 Cities by Future Population

Next, it’s clear that top cities by population will follow a distinct global distribution. By 2035, the most highly-populated cities will shift towards the East, with seven cities located in Asia.

RankCityCountry2035 Population
#1Jakarta๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia38 million
#2Tokyo๐Ÿ‡ฏ๐Ÿ‡ต Japan37.8 million
#3Chongqing๐Ÿ‡จ๐Ÿ‡ณ China32.2 million
#4Dhaka๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh31.2 million
#5Shanghai๐Ÿ‡จ๐Ÿ‡ณ China25.3 million
#6Karachi๐Ÿ‡ต๐Ÿ‡ฐ Pakistan24.8 million
#7Kinshasa๐Ÿ‡จ๐Ÿ‡ฉ DR Congo24.7 million
#8Lagos๐Ÿ‡ณ๐Ÿ‡ฌ Nigeria24.2 million
#9Mexico City๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico23.5 million
#10Mumbai๐Ÿ‡ฎ๐Ÿ‡ณ India23.1 million

While Jakartaโ€™s 38 million-strong population is expected to emerge in first place, the city may not retain its status as Indonesiaโ€™s capital for much longer. Rising sea levels and poor water infrastructure management mean that Jakarta is rapidly sinkingโ€”and the government now plans to pivot the capital to Borneo island.

On the African continent, Kinshasa and Lagos are already among the worldโ€™s largest megacities (home to over 10 million people), and will hold top spots by the turn of the century.

Population and demographics can be major assets to a countryโ€™s growth. For example, Indiaโ€™s burgeoning working-age demographics will present a unique advantageโ€”and the country is projected to contain several of the fastest growing cities in the coming years.

Top 10 Cities By Estimated Annual GDP Growth

When comparing cities based on their pace of economic growth, there are some clear standouts. Average annual GDP growth across cities is 2.6%, but the top 10 surpass this by a fair amount.

The kicker? All of 2035’s major players will be found in Asia: four of the fastest-growing cities will be in mainland China, another four in India, and the last two in Southeast Asia.

RankCityCountryAnnual Growth
#1Bengaluru๐Ÿ‡ฎ๐Ÿ‡ณ India8.5%
#2Dhaka๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh7.6%
#3Mumbai๐Ÿ‡ฎ๐Ÿ‡ณ India6.6%
#4Delhi๐Ÿ‡ฎ๐Ÿ‡ณ India6.5%
#5Shenzhen๐Ÿ‡จ๐Ÿ‡ณ China5.3%
#6Jakarta๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia5.2%
#7Manila๐Ÿ‡ต๐Ÿ‡ญ Philippines5.2%
#8Tianjin๐Ÿ‡จ๐Ÿ‡ณ China5.1%
#9Shanghai๐Ÿ‡จ๐Ÿ‡ณ China5.0%
#10Chongqing๐Ÿ‡จ๐Ÿ‡ณ China4.9%

At #1 by 2035 is Bangalore with an expected 8.5% annual growth forecastโ€”its high-quality talent pool makes the city a breeding ground for tech startups. Jakarta makes another appearance, with its projected 5.2% growth at double the city average.

Shanghai finds its way onto all three lists. The commercial capital hosts the worldโ€™s busiest port, and one of Chinaโ€™s two major stock exchanges. These sectors could help boost Shanghaiโ€™s annual GDP growth to 5% in 2035.

Looking to the Future

Of course, any number of variables could impact these 2035 projections, from financial recessions and political uncertainty, to rapid urbanization and technological advances.

But one thingโ€™s certainโ€”in the coming decades, cities are where many of these factors will converge and play out.

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