China's economic muscle and the U.S. debt are common worries in Congress these days. Republican Congressman Allen West, who represents parts of Broward and Palm Beach counties, weighed in during an interview about China on Fox News June 2.
Anchor Jenna Lee asked: "How would you deal with China, especially with our economic ties right now? I mean, what's the way forward?"
West replied: "Well, I think that that is one of the key things that we need to be talking about, when we look at the debt that we have and China owns about 29 percent of that debt."
West linked to the interview on his website.
Is West's figure right -- does China own about 29 percent of the U.S. debt?
We asked spokeswoman Angela Sachitano for an explanation. She sent us back a link to a March 25, 2011, report from the Congressional Research Service titled "Foreign Holdings of Federal Debt." Note the word "foreign." Table 2 shows the top 10 "foreign holders" of federal debt, and Mainland China is at the top, with about $1.16 trillion or 26.1 percent (Japan is No. 2). This means China holds about 26 percent of "foreign investment in U.S. privately held federal debt," the report states.
Our colleagues at PolitiFact Georgia weighed in on a similar claim by Herman Cain, a Republican presidential candidate, who spoke about China's share of the U.S. debt at a tea party event in Iowa on April 16. We rated Cain's claim False.
"If we don't begin to grow with the potential that we have in this country, we will have another national security crisis, and that national security crisis is that China will be as big as we are," Cain said. "They'll start to develop a military as big and as good as ours, and they've got a billion more people and they're holding 26 percent of our debt. And you think we're going to be able to sing Kumbaya with them?"
After examining a U.S. Treasury Department report of foreign holders of treasury securities as of March, PolitiFact concluded:
"According to the report, as of February of this year, China held $1.15 trillion worth of U.S. Treasury securities. Together, all foreign holders came to $4.47 trillion. So China's share of that comes to about 26 percent. China, incidentally, tops the list of foreign holders of U.S. debt, followed by Japan and then, with a much smaller share, countries such as the United Kingdom and Brazil.
"But that's just the foreign holders of Treasury securities. More than two-thirds of the debt is held by U.S. residents and institutions. When you look at everyone who holds U.S. Treasury securities, China's share drops to 8.1 percent ($1.15 trillion out of $14 trillion)."
(For the West fact-check, we contacted the U.S. Treasury to ask whether that report had been updated since March and were told that it was the most recent data available.)
PolitiFact National continued:
"Of course, there are lots of ways to slice debt statistics. For example, instead of gross federal debt (the figure cited above), some people prefer to use a figure for 'debt held by the public.' That's the gross federal debt minus the share of the debt held by the U.S. government itself. That was $9.4 trillion at the end of 2010. Which would put the portion held by China at about 12.3 percent. There are also Chinese holdings of debt outside of Treasuries, said Derek Scissors of the conservative Heritage Foundation. But that doesn't get Cain anywhere near his 26 percent figure.
"Even stretching, you can't get past 15.6 percent of our debt as held by China and I would not use that number," Scissors said.
The number cited by Cain is "misleadingly large," Scissors said. "He's not talking about our debt, he's talking about the foreign share of our debt. If you are going to use that number, you really have to explain it."
We told Sachitano that West's figure was close to China's share of the foreign-held U.S. debt. She replied by e-mail: "No misrepresentation." She also referred us to slides on West's website, which he uses at town-hall meetings. On his slide show, however, West's pie charts correctly show China's share of the U.S. debt held by foreigners, a distinction he didn't make on Fox News.
The 29 percent figure that West mentioned on Fox is even higher than what Cain had cited, and we've already labeled that too high. The number West used is also wrong. Although on TV he left out only a couple words, those words matter because they make a big difference here. He could have explained that he was referring to foreign holders of U.S. debt -- but he didn't. So his statement makes it appear that China owns a much larger chunk of the federal debt than it does. We rate this claim False.