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Taiwan

A jumble of street signs in a Taiwan street. Taiwan gets most of its income from trade and as a hedge against the hard times, it invests in U.S. securities.

Ingram Publishing/Thinkstock

Creditor Name: Taiwan

Amount of U.S. Debt Owned (January 2013): $196.6 billion

Percent of U.S. Public Debt (January 2013): 1.7 percent

This small island nation makes nearly all of its money exporting goods to Europe, the U.S. and China. So, when the world economy is good, the Taiwanese economy is very good [source: Shapiro]. But to hedge for the bad times, Taiwanese investors put their money in the safest securities in the world: U.S. debt.

Taiwan is a democracy with a constitution and a freely elected president. After World War II, the Communist party wrested control of the government from the Nationalist party and created the People's Republic of China. But many Nationalist leaders and sympathizers relocated to Taiwan, officially called the Republic of China [source: Bloomberg]. In essence, there were two Chinas. And the crazy thing is, there still are!

Both mainland China and Taiwan considered themselves the "one China," and the U.S. finds itself in awkward diplomatic territory. On one hand, America recognizes Mainland China as the "real" China, but it sells fighter jets to Taiwan. (Taiwan is also the fourth largest buyer of U.S.-made arms). In recent years, the relationship between Taiwan and China has warmed over the two nation's shared economic success. Money from Taiwanese investors has helped fuel the economic boom on the Mainland [source: CIA World Fact Book].

We should mention that the U.S. Treasury ranks "Caribbean Banking Centers" as No. 5 on its list, but since the position is held by six islands that hold almost exclusively offshore accounts, we're giving the spot to Taiwan.

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