Monday, August 8, 2011

China Attacks U.S. on Debt Debate

The Chinese government’s official mouthpiece has published a commentary attacking the United States for its handling of the debt crisis.
The opinion piece published on Xinhua, the state-run news wire, chided the U.S. for its “debt addiction” and said it was “time for Washington to revisit the time-tested common sense that one should live within one’s means.”
The commentary went on to say that American politicians need to “conduct an in-depth self-examination” and decide how to “shake off electoral politics and get difficult jobs done more efficiently.”
The article also called the battle between Democrats and Republicans over how to resolve the debt ceiling crisis “dangerously irresponsible.”
The prospect of a U.S. debt default unnerved global investors because it would hobble the global economy and roil financial markets by raising bond yields and borrowing costs, a point stressed by Xinhua.
China is the largest foreign holder of U.S. government debt, with an estimated 60 to 70 percent of its $3.2 trillion foreign exchange reserves in American assets.
The Financial Times observed: “China has little choice but to continue investing in U.S. assets because no other market is big enough to support its purchases.”

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