According to Reuters, the U.S. consulting firm Rong Ding published a report on Jan. 26 stating that the overall scale of investment between the U.S. and China is much larger than the official figures.
The report was released by the National Committee on U.S.-China Relations, a Washington-based non-governmental organization of influential leaders in business and diplomacy.
According to the report, U.S. investors hold a total of $1.2 trillion in equity and debt securities of Chinese entities through the end of 2020, five times more than the U.S. Treasury Department’s figures. The reason for the discrepancy in the data is mainly that Chinese companies take advantage of a complex legal tax system to issue shares from tax havens and trade them in the United States.
At the same Time, China also holds $2.1 trillion in U.S. bonds, 36 percent more than the official figure. The reason for the data gap is the lack of accurate standards for official statistics.
The head of Rongding said it would be a great loss to humanity to divide the world’s two largest economies that invest so much in each other. Reuters reported, on the other hand, that this trend shows that the Biden team, which has just taken office, faces a big challenge in handling the relations between the U.S. and China.
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