News Column

China Warns U.S. to Pay Its Debt

October 8, 2013


Shanghai, China
Shanghai, China (file photo)

BEIJING: China urged the US yesterday to take decisive steps to avoid a debt crisis and ensure the safety of Chinese investments, as a deadlocked US Congress confronted a looming deadline to increase the nation's borrowing power or risk default.

China, the US government's largest creditor, was "naturally concerned about developments in the US fiscal cliff", Vice Finance Minister Zhu Guangyao said in the Chinese government's first public response to the October 17 deadline in the US for raising the debt ceiling.

"The US is totally clear about China's concerns about the fiscal cliff," Zhu told reporters in Beijing, adding that Washington and Beijing had been in touch over the issue.

"We ask that the US earnestly takes steps to resolve in a timely way before October 17 the political issues around the debt ceiling and prevent a US debt default to ensure safety of Chinese investments in the US and the global economic recovery," Zhu said.

"This is the US's responsibility."

The US government moved into the second week of a shutdown yesterday with no end in sight.

"We hope the US fully understands the lessons of history," Zhu said, referring to a deadlock in 2011 that led to a downgrade of the US credit rating to "AA+" from "AAA" by agency Standard & Poor's.

The last big confrontation over the debt ceiling, in August 2011, ended with an eleventh-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if a default were allowed to happen.

Republican House Speaker John Boehner vowed on Sunday that there was "no way" Republican politicians would agree to a measure to raise the debt ceiling unless it included conditions to rein in deficit spending.

The comment raised fears that the US Congress and President Barack Obama could fail to reach agreement on raising the debt ceiling by October 17, when the Treasury has estimated it will have run out of cash. - Reuters

Daily News

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Original headline: China tells US to pay its debt

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Source: (c) 2013 Independent Newspapers (Pty) Limited. All rights strictly reserved.

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