The end of China’s financing of US deficits forces the United States to attract capital from emerging countries and the euro zone

Until 2013, China provided most of the financing for the United States’ deficits (external and fiscal). But since 2014, China has been losing foreign exchange reserves and no longer finances the United States. So there has been a change in t he financing of the United States’ deficits , which are now financed by attracting capital from emerging countries and the euro zone. This weakens the economies of emerging countries and the euro zone, whose savings finance the United States’ deficits. This was much less the case in the past with China , which had excess savings relative to its investment needs.