Posted on 06/30/2005 5:53:22 AM PDT by snowsislander
FOR WIRE TRANSMISSION: 8:30 A.M. EDT, THURSDAY, June 30, 2005 Elena L. Nguyen: (202) 606-9555 BEA 05-31 Christopher A. Gohrband: (202) 606-9564
U.S. Net International Investment Position at Yearend 2004
The U.S. net international investment position at yearend 2004 was
-$2,484.2 billion (preliminary) with direct investment valued at current cost,
as the value of foreign investments in the United States exceeded the value of
U.S. investments abroad (table 1). At yearend 2003, the U.S. net international
investment position was -$2,156.7 billion (revised).
The -$327.5 billion change in the net investment position from yearend
2003 to yearend 2004 was largely due to substantial net foreign purchases of
U.S. Treasury securities and U.S. corporate bonds. The impact of these net
purchases was partly offset by appreciation of most foreign currencies against
the U.S. dollar, which raised the dollar value of U.S.-owned assets abroad,
especially of U.S.-owned foreign stocks. In addition, increases in stock
market prices raised the value of U.S. holdings of foreign stocks somewhat more
than they raised the value of foreign holdings of U.S. stocks.
With direct investment valued at the current stock market value of
owners’ equity, the net investment position was -$2,542.2 billion (preliminary)
at yearend 2004, compared with -$2,372.4 billion (revised) at yearend 2003.
The -$169.9 billion change in the net investment position on this basis
resulted from the same factors as above. Price and exchange-rate changes were
larger on this basis than with direct investment valued at current cost. Other
highlights include:
In regard to transactions, foreign acquisitions of assets in the United
States were a record $1,440.1 billion in 2004, up from $889.0 billion in
2003. Foreign official acquisitions of assets were a record $394.7
billion, following last year’s record $278.3 billion; acquisitions of U.S.
Treasury securities were a record. Increases in liabilities reported by
U.S. banks were a record $322.6 billion, more than triple last year’s
increase and more than double the previous record in 1997. Net foreign
purchases of U.S. securities other than U.S. Treasury securities were
$369.8 billion; net foreign purchases of U.S. bonds were a record $309.3
billion and net foreign purchases of U.S. stocks were $60.5 billion.
Foreign direct investment in the United States rebounded, liabilities
reported by U.S. nonbanks grew more strongly than in 2003, and net foreign
purchases of U.S. Treasury securities by private foreigners were slightly
higher.
Also in regard to transactions, U.S. acquisitions of assets abroad were a
record $855.5 billion in 2004, up from $328.4 billion in 2003. The
increase was mostly accounted for by record increases in claims reported by
U.S. banks and nonbanking concerns and a record increase in U.S. direct
investment abroad. U.S. banks’ claims increased $356.1 billion, compared
to a $9.6 billion increase in 2003; U.S. nonbanks’ claims increased $149.0
billion, compared to a $24.2 billion increase; and U.S. direct investment
abroad increased $252.0 billion, compared to $140.6 billion. In contrast,
net U.S. purchases of foreign securities decreased to $102.4 billion from
$156.1 billion in 2003, as net U.S. purchases of both foreign stocks and
bonds slowed.
Price appreciation in most world stock markets increased the value of
both foreign holdings of U.S. corporate stocks and U.S. holdings of foreign
corporate stocks. Price appreciation of stocks also increased the value of
owners’ equity of foreign direct investment in the United States and of
U.S. direct investment abroad on a market-value basis.
Appreciation of most foreign currencies against the U.S. dollar from
yearend 2003 to yearend 2004 raised the dollar value of all foreign-
currency-denominated assets and liabilities, especially the value of U.S.-
owned foreign corporate stocks and U.S. direct investment abroad.
____________________________________________________________________________________
Valuation Methods for Direct Investment
The current-cost method values the U.S. and foreign parents’ share of their
affiliates’ investment in plant and equipment using the current cost of capital
equipment, in land using general price indexes, and in inventories using
estimates of their replacement cost.
The market-value method values the owners’ equity component of the direct
investment position using indexes of stock market prices.
The historical-cost method values all assets and liabilities at their book
value. Country and industry detail can be shown only under this method. Data
on this basis are not presented in this release.
____________________________________________________________________________________
U.S.-owned assets abroad increased $1,411.8 billion to $9,052.8 billion
with U.S. direct investment abroad valued at current cost, and they increased
$1,676.1 billion to $9,972.8 billion with U.S. direct investment abroad valued
at market value.
U.S. holdings of foreign securities increased $482.9 billion to $3,436.7
billion. Holdings of foreign stocks increased as a result of large price
appreciation, exchange-rate appreciation of foreign currencies against the U.S.
dollar, and net U.S. purchases. Holdings of foreign bonds increased as a
result of exchange-rate appreciation, net U.S. purchases, and small price
appreciation.
U.S. direct investment abroad valued at current cost increased $304.8
billion to $2,367.4 billion, mostly as a result of large financial outflows of
$252.0 billion. At market value, U.S. direct investment abroad increased
$569.2 billion to $3,287.4 billion, reflecting large financial outflows, strong
price appreciation of owners’ equity resulting from an increase in foreign
stock prices, and exchange-rate appreciation of foreign currencies against the
U.S. dollar.
Claims on foreigners reported by U.S. banks increased $414.7 billion to
$2,174.0 billion, mostly as a result of financial outflows of $356.1 billion.
Claims on unaffiliated foreigners reported by U.S. nonbanking concerns
increased $204.6 billion to $801.5 billion, mostly as a result of financial
outflows of $149.0 billion.
U.S. official reserve assets increased $6.0 billion to $189.6 billion.
Foreign-owned assets in the United States increased $1,739.3 billion to
$11,537.0 billion with foreign direct investment in the United States valued at
current cost, and they increased $1,846.0 billion to $12,515.0 billion with
foreign direct investment in the United States valued at market value.
Foreign official assets in the United States increased $414.9 billion to
$1,982.0 billion. The increase was largely attributable to net purchases of
U.S. Treasury securities.
Foreign holdings of U.S. securities other than U.S. Treasury securities,
excluding official holdings, increased $579.7 billion to $3,987.8 billion.
Foreign holdings of U.S. stocks increased as a result of large price
appreciation and modest net foreign purchases. Foreign holdings of U.S. bonds
increased mostly as a result of net foreign purchases.
Foreign holdings of U.S. Treasury securities, excluding official
holdings, increased $96.5 billion to $639.7 billion, mostly as a result of
sizable net foreign purchases.
U.S. liabilities to private foreigners and international financial
institutions reported by U.S. banks increased $383.5 billion, to $2,304.6
billion, mostly as a result of financial inflows of $322.6 billion.
Liabilities to unaffiliated foreigners reported by U.S. nonbanking
concerns increased $126.9 billion to $581.3 billion, mostly as a result of
financial inflows of $124.4 billion.
Foreign direct investment in the United States valued at current cost
increased $123.0 billion to $1,708.9 billion, mostly as a result of net
financial inflows. At market value, foreign direct investment in the United
States increased $229.7 billion to $2,686.9 billion, as a result of net
financial inflows and price appreciation of owners’ equity resulting from an
increase in U.S. stock prices.
U.S. currency held by foreigners increased $14.8 billion to $332.7
billion.
* * *
Revisions
The previously published net international investment position in 2003
was -$2,430.7 billion with direct investment at current cost and -$2,651.0
billion with direct investment at market value.
This year, the estimates of U.S. holdings of foreign securities for
2002-2003 were revised to incorporate results from the U.S. Treasury
Department’s Annual Survey of U.S. Portfolio Investment Abroad as of December
31, 2003. In addition, the estimates of U.S. holdings of foreign bonds for
1998-2001 were revised to incorporate revised data from the U.S. Treasury
Department’s Benchmark Survey of U.S. Portfolio Investment Abroad as of
December 31, 2001. The estimates of foreign holdings of U.S. securities for
2002-2003 were revised to incorporate results from the U.S. Treasury
Department’s Benchmark Survey of Foreign Portfolio Investment in the United
States as of June 30, 2004. The estimates of foreign holdings of U.S.
corporate bonds and stocks for 2002-2003 also include the incorporation of
results from the U.S. Treasury Department’s Annual Survey of Foreign Portfolio
Investment in the United States as of June 30, 2003. The estimates of
short-term U.S. Treasury obligations and other short-term instruments reported
by U.S. banks for 2001-2003 were revised to incorporate results from the U.S.
Treasury Department’s Benchmark Survey of Foreign Portfolio Investment in the
United States as of June 30, 2004, as well as results from the annual surveys
as of June 30, 2002 and June 30, 2003. The estimates of U.S. claims reported
by U.S. banks for 1998-2003 were revised to incorporate new information on
foreign commercial paper issued in the United States.
In addition to the above improvements, all estimates are revised as a
result of newly available or revised quarterly source data. Revisions
attributable to these updated source data are for 2001-2003. The net result of
revisions from all sources raised the value of U.S. assets abroad relative to
the value of foreign assets in the United States for recent years.
A more detailed discussion of the U.S. net international investment
position in 2004 and revised historical data will appear in the July issue of
the Survey of Current Business. That issue will also contain an article about
historical-cost direct investment positions, with detail by country and industry,
and revised direct investment historical data.
* * *
BEA’s major national, regional, international, and industry estimates;
the Survey of Current Business; and BEA news releases are available on BEA’s
Web site at www.bea.gov. By visiting the site, you can also subscribe to
receive free e-mail summaries of BEA releases and announcements.
Table 1.--International Investment Position of the United States at Yearend, 2003 and 2004
[millions of dollars]
Changes in position in 2004 (decrease (-), increase (+))
Attributable to:
Valuation adjustments
Line Type of investment
Position, Position,
2003/r/ Exchange- 2004/p/
Financial Price rate Other
flows changes changes/1/ changes/2/ Total
(a) (b) (c) (d) (a+b+c+d)
Net international investment position of the United States:
1 With direct investment positions at current cost (line 3 less line 24)................-2,156,703 -584,597 57,253 190,726 9,102 -327,516 -2,484,219
2 With direct investment positions at market value (line 4 less line 25)................-2,372,370 -584,597 146,514 272,278 -4,070 -169,875 -2,542,245
U.S.-owned assets abroad:
3 With direct investment positions at current cost (lines 5+10+15).................... 7,640,986 855,508 227,413 228,630 100,259 1,411,810 9,052,796
4 With direct investment positions at market value (lines 5+10+16).................... 8,296,638 855,508 430,698 308,239 81,700 1,676,145 9,972,783
5 U.S. official reserve assets.......................................................... 183,577 -2,805 5,061 3,738 20 6,014 189,591
6 Gold................................................................................ 108,866 .... /3/5,061 .... /4/20 5,081 113,947
7 Special drawing rights.............................................................. 12,638 398 .... 592 .... 990 13,628
8 Reserve position in the International Monetary Fund................................. 22,535 -3,826 .... 835 .... -2,991 19,544
9 Foreign currencies.................................................................. 39,538 623 .... 2,311 .... 2,934 42,472
10 U.S. Government assets, other than official reserve assets............................ 84,772 -1,216 .... .... .... -1,216 83,556
11 U.S. credits and other long-term assets /5/......................................... 81,980 -1,177 .... .... .... -1,177 80,803
12 Repayable in dollars.............................................................. 81,706 -1,176 .... .... .... -1,176 80,530
13 Other /6/......................................................................... 274 -1 .... .... .... -1 273
14 U.S. foreign currency holdings and U.S. short-term assets........................... 2,792 -39 .... .... .... -39 2,753
U.S. private assets:
15 With direct investment at current cost (lines 17+19+22+23)........................ 7,372,637 859,529 222,352 224,892 100,239 1,407,012 8,779,649
16 With direct investment at market value (lines 18+19+22+23)........................ 8,028,289 859,529 425,637 304,501 81,680 1,671,347 9,699,636
Direct investment abroad:
17 At current cost................................................................... 2,062,551 252,012 10,195 36,787 5,841 304,835 2,367,386
18 At market value................................................................... 2,718,203 252,012 213,480 116,396 -12,718 569,170 3,287,373
19 Foreign securities.................................................................. 2,953,778 102,383 212,157 168,400 .... 482,940 3,436,718
20 Bonds............................................................................. 874,356 19,180 2,088 21,031 .... 42,299 916,655
21 Corporate stocks.................................................................. 2,079,422 83,203 210,069 147,369 .... 440,641 2,520,063
22 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns......... 596,961 149,001 .... 10,575 44,999 204,575 801,536
23 U.S. claims reported by U.S. banks, not included elsewhere.......................... 1,759,347 356,133 .... 9,130 49,399 414,662 2,174,009
Foreign-owned assets in the United States:
24 With direct investment at current cost (lines 26+33)................................ 9,797,689 1,440,105 170,160 37,904 91,157 1,739,326 11,537,015
25 With direct investment at market value (lines 26+34)................................10,669,008 1,440,105 284,184 35,961 85,770 1,846,020 12,515,028
26 Foreign official assets in the United States.......................................... 1,567,124 394,710 -7,342 .... 27,500 414,868 1,981,992
27 U.S. Government securities.......................................................... 1,192,242 311,133 -19,456 .... 15,658 307,335 1,499,577
28 U.S. Treasury securities.......................................................... 990,411 272,648 -16,010 .... 13,453 270,091 1,260,502
29 Other............................................................................. 201,831 38,485 -3,446 .... 2,205 37,244 239,075
30 Other U.S. Government liabilities /7/............................................... 16,627 488 .... .... .... 488 17,115
31 U.S. liabilities reported by U.S. banks, not included elsewhere..................... 201,054 70,329 .... .... 88 70,417 271,471
32 Other foreign official assets....................................................... 157,201 12,760 12,114 .... 11,754 36,628 193,829
Other foreign assets:
33 With direct investment at current cost (lines 35+37+38+41+42+43).................. 8,230,565 1,045,395 177,502 37,904 63,657 1,324,458 9,555,023
34 With direct investment at market value (lines 36+37+38+41+42+43).................. 9,101,884 1,045,395 291,526 35,961 58,270 1,431,152 10,533,036
Direct investment in the United States:
35 At current cost................................................................... 1,585,898 106,832 3,000 1,943 11,204 122,979 1,708,877
36 At market value................................................................... 2,457,217 106,832 117,024 .... 5,817 229,673 2,686,890
37 U.S. Treasury securities............................................................ 543,209 106,958 -5,078 .... -5,373 96,507 639,716
38 U.S. securities other than U.S. Treasury securities................................. 3,408,113 369,793 179,580 24,171 6,140 579,684 3,987,797
39 Corporate and other bonds......................................................... 1,707,206 309,258 12,475 24,171 6,140 352,044 2,059,250
40 Corporate stocks.................................................................. 1,700,907 60,535 167,105 .... .... 227,640 1,928,547
41 U.S. currency....................................................................... 317,908 14,827 .... .... .... 14,827 332,735
42 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns.... 454,317 124,358 .... 5,848 -3,265 126,941 581,258
43 U.S. liabilities reported by U.S. banks, not included elsewhere..................... 1,921,120 322,627 .... 5,942 54,951 383,520 2,304,640
p Preliminary.
r Revised.
1. Represents gains or losses on foreign-currency-denominated assets and liabilities due to their revaluation at current exchange rates.
2. Includes changes in coverage, capital gains and losses of direct investment affiliates, and other adjustments to the value of assets and liabilities.
3. Reflects changes in the value of the official gold stock due to fluctuations in the market price of gold.
4. Reflects changes in gold stock from U.S. Treasury sales of gold medallions and commemorative and bullion coins; also reflects replenishment through open market purchases.
These demonetizations/monetizations are not included in international transactions financial flows.
5. Also includes paid-in capital subscriptions to international financial institutions and resources provided to foreigners under foreign assistance programs requiring
repayment over several years. Excludes World War I debts that are not being serviced.
6. Includes indebtedness that the borrower may contractually, or at its option, repay with its currency, with a third country's currency, or by delivery of materials or transfer
of services.
7. Primarily U.S. Government liabilities associated with military sales contracts and other transactions arranged with or through foreign official agencies.
Source: Bureau of Economic Analysis
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Foreign-owned assets in the United States increased $1,739.3 billion to $11,537.0 billion with foreign direct investment in the United States valued at current cost, and they increased $1,846.0 billion to $12,515.0 billion with foreign direct investment in the United States valued at market value. Foreign official assets in the United States increased $414.9 billion to $1,982.0 billion. The increase was largely attributable to net purchases of U.S. Treasury securities.
Roughly 12 trillion dollars worth of assets in the United States are owned by foreigners. To give some comparable numbers, that's not much less than the total capitalization of all of the stock issues traded on the NYSE as of May 31. It's roughly the same number as our annual GDP. It's roughly three times our total shipped value of manufacturing in the U.S. in 2004. It's almost twice all of the wages paid in the U.S. in 2004. It's roughly 2/3's of the total net financial assets in the personal sector in the U.S. It's more than the total financial assets of non-farm, non-financial business corporations in the U.S.
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD
2005 2005 2005 2005 2004 2004 2004 2004 2004 2004 2004
Apr Mar Feb Jan Dec Nov Oct Sept Aug July June 2/
COUNTRY Series V Series IV
Japan 685.2 679.5 680.3 679.3 689.4 692.5 691.8 696.8 698.9 674.9 666.6 688.3
Mainland China 230.4 223.5 224.9 223.5 222.9 220.2 214.8 209.4 201.6 196.4 194.3 165.9
United Kingdom 3/ 125.2 122.2 111.6 101.1 101.0 89.8 72.0 67.6 67.2 63.0 59.6 119.9
Caribbean Banking Centers 4/ 124.6 137.2 104.7 94.2 71.4 75.7 96.9 98.8 94.9 93.8 98.5 100.3
Taiwan 70.6 71.1 68.5 68.3 67.9 67.1 66.6 66.5 65.5 66.8 67.0 57.6
Germany 60.8 56.0 53.0 53.8 50.2 52.6 49.2 47.9 45.1 45.9 44.9 51.4
OPEC 60.6 62.2 67.6 67.0 62.1 63.0 62.1 57.4 51.6 56.9 53.9 51.5
Korea 55.9 57.1 53.1 53.6 55.0 55.3 49.6 50.5 47.3 45.4 44.5 58.6
Hong Kong 47.2 45.2 45.2 45.3 45.1 42.4 43.3 42.9 42.8 43.8 45.8 53.4
Luxembourg 45.3 42.2 42.9 41.7 41.6 40.6 40.4 39.7 39.7 39.6 39.7 27.2
Switzerland 43.3 44.1 44.3 40.8 42.1 41.9 42.3 40.1 40.4 39.6 41.2 49.9
Canada 42.1 38.4 38.0 35.4 33.3 32.2 26.6 26.1 25.7 25.9 23.2 31.2
Mexico 31.6 32.5 33.0 33.5 32.8 33.5 33.2 34.0 36.0 34.6 38.3 45.9
Singapore 30.0 30.7 29.2 29.9 30.3 30.4 28.4 26.1 28.2 28.4 29.3 27.1
Norway 29.8 16.9 33.8 35.1 30.4 32.6 33.0 24.2 21.2 18.6 14.9 4.2
France 22.3 25.1 27.2 21.2 20.0 19.5 19.8 22.0 22.1 23.8 23.1 11.1
India 18.0 18.4 18.1 15.9 15.0 15.5 16.0 14.9 16.3 17.2 18.2 16.1
Netherlands 17.0 18.1 16.5 16.8 17.8 16.3 16.7 18.0 15.2 22.5 22.5 14.4
Sweden 16.8 16.9 16.3 15.8 16.9 16.0 15.6 14.6 14.4 13.7 14.1 9.9
Brazil 16.2 14.7 13.6 13.8 15.1 15.3 15.6 16.3 16.8 16.7 13.8 12.1
Belgium 15.7 15.3 16.7 16.8 17.0 16.8 16.0 15.9 15.8 16.0 16.4 16.1
Italy 14.6 14.5 13.7 13.0 12.8 12.8 12.3 12.4 12.4 13.3 13.5 15.5
Ireland 13.1 17.2 17.8 15.6 16.3 16.9 15.0 14.5 15.5 14.7 12.7 17.5
Poland 11.9 11.4 10.6 10.2 10.8 10.8 10.6 10.3 9.4 9.4 9.4 10.6
Israel 11.6 14.6 14.3 14.9 13.7 13.2 10.6 12.5 11.6 12.8 17.1 18.1
Thailand 11.1 12.1 13.0 13.3 12.5 12.8 12.1 11.1 12.2 11.2 8.8 11.4
Turkey 10.7 11.4 10.4 12.9 12.0 14.5 16.1 16.9 16.5 15.1 15.1 15.0
All Other 128.5 128.0 128.0 125.8 128.8 127.4 117.4 116.5 116.4 123.1 121.1 120.5
Grand Total 1990.1 1976.5 1946.3 1908.6 1883.9 1877.6 1843.7 1824.1 1800.6 1783.2 1767.5 1820.8
Of which
Foreign Official 1236.1 1227.9 1242.5 1238.3 1232.7 1237.1 1219.5 1204.3 1187.6 1169.7 1161.0 1099.3
Treasury Bills 230.1 235.8 235.5 242.6 244.6 256.0 259.5 259.9 254.1 251.8 249.0 249.0
Treasury Bonds&Notes 1006.0 992.0 1007.0 995.7 988.1 981.1 960.0 944.4 933.5 918.0 912.0 850.3
Department of the Treasury/Federal Reserve Board
June 15, 2005
1/ Estimated foreign holdings of U.S. Treasury marketable and nonmarketable bills, bonds and notes
reported under the Treasury International Capital (TIC) reporting system are based on annual
Surveys of Foreign Holdings of U.S. Securities and on monthly data.
2/ Denotes series break: Series IV positions data for this month and prior periods to June 2003 are based on the
end-June 2003 annual Survey; Series V positions data for this month and subsequent periods are based on preliminary
results from the end-June 2004 annual Survey.
3/ Includes Channel Islands and Isle of Man.
4/ Includes Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, and Panama.
It appears the U.K. and Caribbean banking centers have been fairly quickly increasing their treasury holdings since the beginning of the year.
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