Chapter 71 16. Public Debt and External Debt

While the figures yield different results depending on public versus foreign debt, the figures remain an important element in gauging the state of a country's economy. However, data is not the only criterion for evaluating a country's credibility and strength. These figures appear in different forms every year and change with changes in policies and international situations. Public debt is the sum of all financial guarantees owned by a country (issued by the state, issued by entrusted banks, issued by local administrative units, social security funds, etc.).Government debt is the result of government borrowing plus the government budget minus government taxes.

The overall trend is to meet the ever-increasing issuance of public bonds in order to meet fiscal expenditures. Between 2009 and 2010, we saw three countries outperform public debt in particular: France: From 77.50% in 2009 to 83.50% in 2010, an increase of 6 percentage points; United States: From 52.90% in 2009 to 58.90% in 2010, an increase of 6 percentage points; China: From 12.50% in 2009 to 17.60% in 2010, an increase of 4.7 percentage points. Foreign debt, the country's borrowing from foreign business people (country, enterprises and individuals). It is very important to distinguish between the concepts of gross external debt (borrowing from abroad) and net external debt (state lending and state borrowing are two different concepts).

Of these, net external debt is the most important.An excessively high amount will bring trouble to the economy, and the ratio of foreign debt will increase the burden of foreign debt. Foreign debt is also included in the crisis created by the rating agencies.Therefore, in order to avoid suspicion in the speculative field, China established a local rating agency.Moreover, other factors in the financial sphere are often forgotten when people talk about external debt. Especially the resources, potential and their reserves of countries, such as bonds: financial reserves (gold, bills, foreign bonds, foreign exchange, etc.), the ratio of foreign debt to GDP, cultural heritage, strong currency area support, Economic growth, implementation of reforms, domestic spending cuts, personal and national debt ratios, population, economic development potential, overseas investment, resources, etc.

The total foreign debt apportioned to each resident also appears less important in economic issues if a country has a large number of profitable and sound claims, and its current or future economic situation is good. Finally, another crisis-mitigating factor that should be taken into consideration is the national budget (including creditor's rights and debts). required social connections. Total external debt in 2010 (excluding claims) 1. United States 13980 12. Belgium 1241 2. EU 13720 13. Switzerland 1190 3. UK 8981 14. Australia 1169 4. Germany 4713 15. Canada 1009 5. France 4698 16. Sweden 853

6. Japan 2246 17. Austria 755 7. Norway 2232 18. Denmark 559 8. Italy 2223 19. Greece 532 9. Spain 2166 20. Portugal 497 10. Ireland 2131 21. Russia 480 11. Luxembourg 1892 22. China 406 Regardless of the US bonds held in hand (net foreign debt), according to the economic development of each country from 2009 to 2010, we can see the following five countries: United States: Total external debt increased from 9993 billion euros in 2009 to 10192 billion euros in 2010, and the per capita debt in 2009 was 32524 euros ↑ the world's first! France: Total external debt decreased from 3,728 billion euros in 2009 to 3,489 billion euros in 2010, and the per capita debt in 2009 dropped to 58,200 euros↓!

UK: The total foreign debt increased from 6,748 billion euros in 2009 to 1,0187 billion euros in 2010, and the per capita debt in 2009 was 110,443 ↑ up! Germany: Total external debt decreased from 3,867 billion euros in 2009 to 3,500 billion euros in 2010, and the per capita debt in 2009 was 46,989 euros ↓ down! China: The total foreign debt increased from 257 billion euros in 2009 to 301 billion euros in 2010, and the per capita debt in 2009 was 192 euros ↑ but the amount is still very small! Although China's foreign debt has increased slightly in one year, it bears a net foreign debt of 301 billion euros.But staggering reserves keep China's economy in good shape.

In addition, French and German debts have eased.The United Kingdom, especially the United States, has broken its own foreign debt record! However, these interesting data do not match the current standard of speculation in the interaction of financial markets! In fact, structural investment with strong competitiveness in the future, measures to promote consumption, encourage the improvement of education and medical care, etc.; these all play the role of propellers and buffers in the economy. In this way, it is necessary to control the amount of net external debt and total debt well.We must take into account the strength and national conditions of each country.

But one thing is for sure, China will comfortably lead the next few years and even into 2030 in a strong economic position, both in terms of its relatively small debts and its staggering reserves, development and growth.