Preface

On July 30th, the United States Treasury bonds reached the significant milestone of $36 trillion, which has garnered widespread global attention. In response, numerous countries have been reducing their holdings of U.S. Treasury bonds to avoid unnecessary issues.

In contrast to the United States, our country has always maintained a reasonable scale in the planning of national debt. So, how much national debt does our country have?

The Importance of National Debt

When it comes to national debt, many people might perceive it as a distant and complex topic. However, national debt is actually closely related to our daily lives.

The most direct function of national debt is to quickly raise funds. When the country requires a substantial amount of capital to support significant strategies or key construction projects, issuing national debt becomes an efficient option.

The role of national debt extends beyond this; it is also a powerful tool for dealing with economic crises.

Do you remember the COVID-19 pandemic in 2020? At that time, the Chinese government decisively issued 1 trillion yuan in special national debt for pandemic control. This funding was like a strong stimulant, injecting new vitality into the economy affected by the pandemic.

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However, it is also important to understand that issuing national debt is not about quantity but quality, much like using a credit card, which requires careful planning and management.

When issuing national debt, the government will consider the scale, structure, and types of debt very cautiously. By reasonably arranging national debts with different terms and types, the overall debt structure can be optimized, and risks can be reduced.So, friends, when we look at the issue of national debt, we cannot only look at the absolute numbers, but also analyze them in conjunction with the overall development of the economy.

What is the scale of U.S. national debt? And how did the United States develop to its current situation?

The Development of U.S. National Debt

By the end of July this year, the scale of U.S. national debt has already exceeded 35 trillion U.S. dollars, and this number is still growing.

The accumulation of such a large scale of U.S. national debt is closely related to U.S. fiscal policy. For a long time, the U.S. government has been accustomed to supporting its huge fiscal expenditures through borrowing.

Whether it is dealing with financial crises, waging wars, or implementing large-scale economic stimulus plans, the U.S. government tends to issue more national debt.

Under long-term accumulation, the amount of U.S. national debt continues to increase, eventually reaching an astonishing number.

However, the large-scale U.S. national debt has also affected the pattern of the international financial market, and many countries have begun to reduce their holdings of U.S. national debt.

Such a high level of national debt also has an impact on the U.S. economy. Money that was originally used to improve people's livelihoods and develop the economy now has to be used to repay debts, which will undoubtedly affect the government's other expenditures.

Secondly, high national debt may also affect U.S. economic growth, as the government needs to borrow more money to repay old debts. This may crowd out investment opportunities in the private sector, thereby affecting the overall vitality of the economy.Facing such a massive national debt, the reaction within the United States has been quite intense. However, despite ongoing controversies, it seems that the scale of the U.S. national debt shows no signs of stopping.

Even after experiencing a series of challenges such as the COVID-19 pandemic and economic recession, the scale of U.S. national debt has still surpassed the 35 trillion U.S. dollars mark and continues to grow.

So, how does our country's national debt scale compare with that of the United States?

Scale of China's National Debt

After discussing the story of the U.S. as a "major debtor," let's take a look at the situation in China. Compared with the United States, our national debt scale can be considered quite "modest."

As of the end of 2023, the outstanding national debt of our country was 30.03 trillion yuan, with domestic debt accounting for the vast majority of this amount.

In other words, our national debt is mainly held by domestic investors, which is akin to borrowing money within the family rather than from outsiders. The issuance of such national debt is more controllable.

On October 11, 2024, the Ministry of Finance issued the sixth batch of national bonds. As of October 11, the scale of our country's national debt approached 30.78 trillion yuan (approximately 4.34 trillion U.S. dollars at the current exchange rate).

These national bonds are used to support the construction of major national strategies and key areas of security capabilities, which can enhance our industrial level and make our strategic construction faster and better.

You might worry at this point, will issuing so many national bonds burden our economy? Don't worry, the scale of our country's issuance of national bonds is within the reasonable range of the state.In general, the management of our country's national debt can be described as prudent and flexible. We do not over-rely on national debt like some countries, leading to a towering debt; nor do we completely reject the use of national debt. Instead, we use this financial tool reasonably and moderately according to actual needs. This balance is precisely where the ingenuity of our fiscal policy lies. So, how should our country develop in the future?

The development of China's national debt in the future

Reasonably controlling the scale of national debt will be an important task for us in the future. We need to scientifically determine the scale and structure of government debt, meeting the needs of economic development while keeping it within a safe range.

We should also give full play to the positive impact of national debt on the economy. National debt is not only a tool for raising funds but also an important means of macroeconomic regulation.

By using national debt reasonably, we can support economic and social development, drive the expansion of effective investment, and build the security capacity of national major strategies and key areas.

Furthermore, strengthening the management of the bond market will also be a focus for us in the future. We need to deepen the reform of national debt management and promote the national debt yield curve to better play a benchmark role.

Lastly, risk prevention and control, as well as supervision, are also an important part that we cannot ignore. We need to improve the whole chain and whole process supervision of local government debt, putting a "safety rope" on the national debt.

The issuance, use, and repayment of national debt should be strictly controlled. At the same time, we should also actively cooperate with the relevant work of the People's Congress to make the use of national debt more transparent and standardized.

In summary, the future development path of our country's national debt is to find a balance between "stability" and "progress".Only in this way can we maximize the utility of government bonds as a financial instrument, providing strong support for the high-quality development of our country's economy.

Conclusion

Looking ahead, the development path of Chinese government bonds is still full of challenges and opportunities. We need to work hard in various aspects such as reasonably controlling the scale, leveraging economic impact, strengthening market management, and preventing and controlling risks.

Only in this way can we make government bonds this "golden key" truly become a sharp tool to open the door to high-quality economic development.