Table of Contents

5 Foreign Countries That Own the Most U.S. Debt

Foreign ownersh🔯ip of U.S. debt through T𒁏reasury holdings

By

澳洲幸运5官方开奖结果体彩网:Andrew Sebastian

Updated January 25, 2025

Reviewed by

Robert C. Kelly

Fact checked by

Yarilet Perez

The U.S. government incurs debt when it issues Treasury securities to fund the deficit between the amount of money that it receives in taxes and other revenues versus the amount of money that it spends on defense, welfare programs, interest, and more. As of Jan. 23, 2025, the government's total debt is $36.22 trillion. The foreign countries that hold the most U.S. debt are Japan, China, the U.K., the Cayman Islands, and Luxembourg as of the latest information from November 2024.

Key Takeaways

The Bureau of the Fiscal Service classifies national debt as intragovernmental debt and debt held by the public.
About four-fifths of the total national debt is public debt, which includes Treasury holdings by foreign countries.
Japan is the largest foreign holder of public U.S. government debt, owning $1.09 trillion in debt as of November 2024.
China ranks second in total U.S. debt owned by foreign countries, with the U.K., Luxembourg, and the Cayman Islands rounding out the top five.
The total national debt is $36.22 trillion as of Jan. 23, 2024.

Types of Debt

U.S. 澳洲幸运5官方开奖结果体彩网:national debt is categorized as intragovernmental debt and 澳洲幸运5官方开奖结果体彩网:public debt. Intragovernmental debt is debt held within the U.S. by federal agencies and entities. It makes up about a fifth of the total outstanding U.S. debt. This debt includes money owed to Social Security, military retirement funds, Medicare, and other retirement funds.

The remainder is public debt. Foreign governments hold a large portion of the public debt, while the rest is owned by U.S. banks and individual investors, the Federal Reserve, state and local governments, mutual funds, pensions funds, insurance companies, and holders of savings bonds.

As of Jan. 23, 2025, $28.88 trillion of the national debt is held by the public.

Important

Congress sets a ceiling on the debt that can be raised periodically. On Dec. 16, 2021, the debt ceiling was raised by $2.5 trillion to $31.4 trillion. This is the largest dollar amount increase in the national debt. In June 2023, the debt ceiling was suspended by Congress until 2025 as the national debt passed the $31.4 trillion mark.

1. Japan

Japan held $1.09 trillion in Treasury securities as of November 2024, beating out China as the largest foreign holder of U.S. debt.

2. China

China gets a lot of attention for holding a big chunk of the U.S. government's debt. Given that its economy expanded rapidly in the last decades, perhaps this shouldn't come as a surprise. China takes the second spot behind Japan among foreign holders of U.S. debt with $768.6 billion in Treasury holdings as of November 2024.

While Chinese-owned debt is frequently drummed up as a political talking point, there's nothing particularly sinister about an export-oriented economy investing in Treasury securities. Treasuries are a logical investment for a countrꦬy with high foreign currency reser꧂ves.

3. United Kingdom

British investors hold $765.6 billion of U.S. debt as of November 2024. The U.K.'s investment in U.S. debt may be linked to 澳洲幸运5官方开奖结果体彩网:its difficult economic situation.

Fast Fact

The largest owner of U.S. debt by far is actually the U.S. government, which holds Treasury securities in various government accounts and pension funds.

4. Luxembourg

Luxembourg is the fourth-largest holder of U.S. debt among foreign countries while having one of the highest GDP per capita—$128,678 as of 2023, the latest data available. This ranking may be due to Luxembourg's status as a 澳洲幸运5官方开奖结果体彩网:tax haven, where wealthy investors park their funds in local holding companies. Much of this wealth is then invested in various securities, including Treasuries.

As of November 2024, Luxembourg held $424.5 billion of U.S. Debt.

5. Cayman Islands

The Cayman Islands is a global tax haven. Additionally, many investment firms are headquartered in the Cayman Islands, holding much of the chunk of U.S. Treasuries. As of November 2024, the Cayman Islands holds $397 billion of U.S.

Who Owns U.S. Debt Besides Foreign Governments?

Other holders of U.S. national debt include U.S. banks and investors, state and local governments, mutual funds, pension funds, insurance companies, and investors in savings bonds. Various agencies and entities within the U.S. government also own debt, which is known as intragovernmental debt.

What Is the Current National Debt?

As of Jan. 23, 2025, the U.S. national debt is $36.22 trillion. At the end of 2019, before the COVID-19 pandemic, the national debt was $23 trillion. One year later, it rose to $27.7 trillion. Since then, it has steadily increased.

Why Is the National Debt So High?

The national debt is so high because the U.S. continues to spend more than it receives in revenue. Therefore, it must issue more debt to cover the difference. The national debt is an accumulation of federal budget deficits. Every spending program and tax cut adds to the debt, unless paid for by new appropriations.

Why Is the U.S. in Debt to China?

The U.S. doesn't restrict who may buy its securities. China invests in U.S. debt because of the positive effect these low-risk, stable investments can have on its economy. By investing in dollar-denominated securities, the value of the dollar increases relative to the value of China's currency, the yuan. This, in turn, makes Chinese goods cheaper and more attractive than U.S. goods to buyers. That increases sales and strengthens the economy.

The Bottom Line

U.S. Treasury securities are considered to be some of the most liquid and safest assets👍 in the world. For🔯 this reason, and because a majority of global trade is conducted in U.S. dollars, many countries hold U.S. debt as an investment.

Correction— June 2, 2025: This article has been corrected to reflect that Japan holds $1.09 trillion in Treasury securities.

Article Sources

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