China Overtakes Japan as World’s Second-Largest Net Creditor

May 27, 2026 at 12:10 PM

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Lanka Leader

China has reportedly surpassed Japan to become the world’s second-largest net creditor nation in 2025, according to data released by Japan’s Finance Ministry and cited by international media reports.

The development marks another setback for Japan’s global financial ranking after it lost the top position to Germany in 2024. Japan now ranks third despite maintaining positive growth in its net external assets.

According to the latest figures, Japan’s net external assets reached 561.8 trillion yen (approximately $3.5 trillion) by the end of 2025. However, China moved ahead with net external assets totaling $4.0713 trillion, based on data from China’s State Administration of Foreign Exchange.

Germany retained the top position globally with net external assets valued at 675.5 trillion yen.

Net external assets measure the value of overseas assets owned by a country’s residents and institutions after subtracting liabilities owed to foreign entities. Economists view the indicator as a major reflection of a nation’s external financial strength, global investment capacity and resilience against international economic risks.

Analysts said China’s rise reflects long-term economic and financial trends rather than short-term market movements.

Yang Delong, chief economist at Shenzhen-based First Seafront Fund, stated that China’s growing overseas assets, diversified investment strategy and steady financial opening-up contributed to the country’s improved global standing.

He noted that China’s overseas physical assets and diversified financial investments continued to expand in 2025, while external liabilities remained stable and manageable.

Reports also noted that both China and Germany benefited from sustained trade surpluses and relatively stable currency exchange rates, which supported growth in their net external assets. In contrast, Japan’s gains were partly offset by rising external liabilities and fluctuations in the Japanese yen.

Analysts said the latest rankings demonstrate the growing global financial influence of China and the shifting balance of economic power in the international system.