Japan and China have 2.4 trillion reasons to be worried about the debt ceiling debate

BY newsdesk  October 9, 2013 at 12:55 PM EDT

A security guard patrols outside the headquarters of the Bank of China in the Xidan shopping area of Beijing

Together, China and Japan hold more than $2.4 trillion in U.S. debt–easily the largest credit card bill in world history (and second only to the debt obligations held by the Federal Reserve). And the two nations want to make sure the payments continue to arrive on time. “The US is clearly aware of China’s concerns about the financial stalemate [in Washington] and China’s request for the US to ensure the safety of Chinese investments.” Chinese vice-finance minister Zhu Guangyao told the Financial Times.

If a default happens, however unlikely, Chinese investors might shift from buying U.S. treasury bonds to buying U.S. companies, according to Xiang Songzuo, chief economist at the state-owned Agricultural Bank of China.

“America would have to open up more to Chinese investment,” Xiang told the Christian Science Monitor. “Even a temporary default could have quite a significant effect on US-China relations.”