The $1.53 Trillion Question

The perils of even a modest lead-time: when my article in the latest Atlantic about China's holdings of foreign assets went to press, the best and safest estimate we could find of the size of these holdings was $1.4 trillion. Thus the title: "The $1.4 Trillion Question."

This weekend the People's Bank of China, China's equivalent of the Federal Reserve, announced that the holdings had now reached $1.53 trillion. They went up by more than $460 billion in 2007, and they're still rising by more than $1 billion per day.

In any case, the forces explained in that article still apply -- and maybe we'll have to update the title for the web version of the piece (which is free, outside the normal firewall), to reflect the mounting total month by month. By the end of the year: "The Almost-$2 Trillion Question"? Which would mean that, on average, each American would not have borrowed about $4,000 from China; the figure would be closing in on $6,000.

Passage from the original, days-of-innocence article:

This is the real meaning of the vast trade surplus-$1.4 trillion and counting, going up by about $1 billion per day-that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China.