Skip to content
Subscriber Only
Opinion
Matthew A. Winkler

Markets Conclude the U.S. Is Riskier Than China

Now the Treasury has to pay a premium over Chinese bonds to attract investors. They see four major red flags in U.S. debt.

Beijing is having its moment.

Beijing is having its moment.

Photographer: Lintao Zhang/Getty Images

Here’s another reason Donald Trump is “not at all happy with the Fed” and will continue to be frustrated by the world’s No. 2 economy. He is the first president to suffer the new normal of China becoming more creditworthy than the U.S. That’s right: America now pays more to borrow money than China does.

Since 2015, when the Federal Reserve began raising interest rates, the gap between the countries’ Treasury bills has narrowed and then reversed, so that now the U.S. must offer higher yields than China when it sells one-year paper. That happened for the first time in November, when the spread between Chinese and American 10-year notes also collapsed, according to data compiled by Bloomberg.