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Get your fiscal house in order: China warns US as Asia's expresses concern for $1.3tn of investments
'Clock is ticking', says Chinese minister, as US fails to break deadlock over government shutdown and fast-approaching ‘debt ceiling’ deadline
BEN CHU Author Biography ECONOMICS EDITOR TUESDAY 08 OCTOBER 2013
China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.
The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking†and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.
“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,†Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,†he added.
The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling†deadline. Yet rather than indicating a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight†over the budget. He added that a default was “the path we’re onâ€. American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.
In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.
Independent
'Clock is ticking', says Chinese minister, as US fails to break deadlock over government shutdown and fast-approaching ‘debt ceiling’ deadline
BEN CHU Author Biography ECONOMICS EDITOR TUESDAY 08 OCTOBER 2013
China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.
The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking†and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.
“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,†Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,†he added.
The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling†deadline. Yet rather than indicating a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight†over the budget. He added that a default was “the path we’re onâ€. American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.
In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.
Independent
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