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China’s $1.5 Trillion Bet: Understanding China’s External Portfolio

Brad W. Setser

China’s $1.5 Trillion Bet: Understanding China’s External Portfolio

China is now by far the United States’ largest creditor. Its treasury portfolio recently surpassed that of Japan’s, and it has long held more agency (Fannie Mae, Freddie Mac) bonds than any other country. Never before has a nation as poor as China provided so much financing to a country as rich as...