Preface

Economy, undoubtedly, is the best reflection of a country's strength. The rapid development of a nation consumes an immense amount of economic resources. Under high-speed development, the difficulties brought about by the economy are always inevitable, and at such times, loans are undoubtedly the fastest way to solve problems. Recently, the debt situation of the world's three major economies has caused a global uproar. No one expected that the United States, China, and Japan, these three countries, would be carrying such a huge amount of debt!

The "Flabby" United States

"The United States," as the world's largest economy, not only ranks at the forefront in terms of total GDP but also has a significant international influence. The United States, based on its strong industrial foundation, advanced technology, and globalized financial markets, has been able to play the role of a leader in the global economy.And this once "superpower" is now facing a debt crisis.

In July of this year, the debt shouldered by the United States has astonishingly reached $35 trillion, a height that is unimaginable.

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The US dollar has always held a hegemonic position in the world economy, which is difficult to be affected, and this naturally brings about rapid economic development. However, under such circumstances, the United States' debt still reaches such an astonishing amount.

Even this is just the official announcement, in reality, the actual debt of the United States is much higher than this, due to the existence of hidden liabilities.

Such a high level of debt naturally corresponds to "high interest rates". The interest the United States has to pay in 2024 is as high as $1 trillion, and the interest will continue to increase with the debt.

Although the US dollar still holds a hegemonic position, the seemingly huge US economy is just "bloated". The status of the US dollar in the international arena has already begun to waver.

Now, almost 100% of Russia's foreign exchange transactions are settled in "yuan"!

When Putin visited Vietnam, the two countries reached a common desire for "de-dollarization".

In the past, the hegemonic status of the US dollar was unshakable, and many countries had no choice but to use the US dollar for settlement in import and export economic trade, and some countries could not even use their own currency!

Now, Russia has gone further and further on the path of "de-dollarization", on the contrary, the proportion of the yuan in Russia's foreign trade market is getting higher and higher.Although the United States' debt continues to rise, the most headache-inducing issue still belongs to the American people. As the debt increases, the U.S. will inevitably issue a large amount of "national debt" securities. The interest rates on these bonds are quite high, making them highly sought after and earning them the nickname "gold-edged bonds." However, American citizens at this time cannot help but wonder about the downsides. With the U.S. owing more and more debt, although the interest rates on these bonds are high, when will the money be repaid? What if they need to urgently use money for some unforeseen event—can they demand the money back? It's not feasible to constantly pressure the country to repay the debt or to sue the nation in court.

Additionally, on the surface, to save money, the government has begun to continuously reduce the salaries and benefits of its employees in order to alleviate the national burden. There are also measures such as cutting welfare institutions, educational subsidies, and aid to impoverished families, as well as increasing taxes—all of these actions are aimed at plugging the "hole" in the budget.

Undoubtedly, this has led the international market to question "whether the United States can repay its debt," causing the status of the U.S. dollar to seemingly not be as strong as it once was.

In contrast, Japan's current economy is different from that of the United States. Japan can be said to exemplify a "chronic disease" in a very thorough manner!

Japan's "Chronic Disease"Japan holds a world-leading position in high technology, automobile manufacturing, and robotics, and is also a significant global financial and trade hub. However, its economic development reveals a sluggish growth rate, which is not the most severe issue.

The most critical problem for Japan is its debt-to-GDP ratio, which exceeds twice its GDP, amounting to $8.6 trillion. This implies that Japan's annual earnings are not even sufficient to repay its debts, leading to an ever-increasing debt burden with no fundamental ability to repay.

Perhaps statistical data can more vividly illustrate Japan's current economic situation. According to statistics, from March 2023 to April 2023, there were a staggering 9,053 corporate bankruptcies, a 31.58% increase from the 6,880 cases in the previous fiscal year, setting a new record.

There are many reasons for this, but the depreciation of the yen is undoubtedly the most serious issue. Due to the United States' suppression of Japan, the yen's international status is facing an unprecedented crisis.

The current situation within Japan is akin to a chronic disease, where one can only watch it worsen without knowing where to start.

The economic conditions of the United States and Japan are clear, but China's economy remains enigmatic. The Chinese economy is a "puzzle."By the end of March 2024, China's external debt balance reached 2.5 trillion US dollars, but this figure alone does not provide a clear picture of China's debt situation. A significant part of China's debt is actually comprised of corporate and government debt. Regardless of the state of the economy, the benefits for government personnel and subsidies for the poor remain unchanged.

Moreover, Chinese government bonds are still considered "gold-edged bonds," which are always in high demand and short supply. The development speed of China in recent years is evident to all, leading many to worry whether China's debt issues could become unsustainable.

Indeed, China's debt is higher than Japan's but lower than the United States', yet China's debt-to-GDP ratio is the lowest among the three countries. Economic development inevitably brings in more revenue; it is not a situation where the more you develop, the more you fall behind.

The complexity of China's debt, with its many intertwined factors, means there is no specific statistical outcome. However, promoting high-quality development is undoubtedly a top priority for China.