News / Asia

China Expresses Disgust Over US Debt Deal

America's biggest creditor -- China -- is signaling deep unhappiness over this week's deal to raise the U.S. debt ceiling and the way it was accomplished.

A Chinese credit rating agency Wednesday downgraded U.S. debt, saying the deal does nothing to address the underlying problem. And the official Xinhua news agency dismissed the negotiating process that produced the deal as "a madcap farce of brinksmanship."

Zhou Xiaochuan, the governor of China's central bank, used more measured language but issued a similar message. He called for Washington to take concrete and responsible steps to rebuild confidence in U.S. Treasury bonds, saying uncertainties are a threat to the global economic recovery.

Zhou welcomed Tuesday's deal, but said he will be watching closely to see how it is implemented. He also said China will continue seeking to diversify its investments.

China's Dagong credit rating agency said it was downgrading U.S. debt from A-plus to A because the deal does nothing to improve the United States' ability to repay its debts.

Analysts said the downgrade was unlikely to affect interest rates since better-known American agencies like Moody's and Fitch have decided to leave the United States with its top AAA rating. But Dagong's analysis closely tracked a commentary published a day earlier by the People's Daily newspaper, which speaks for the leaders of China's ruling Communist Party.

Patrick Chanovec, an associate professor at Tsinghua University's school of economics in Beijing, told VOA that Dagong has always been highly critical of U.S. debt. But he said that the "messy" process that led to the debt deal has shaken a lot of nerves among major investors.

Xinhua on Wednesday said the United States has a "runaway debt addiction" which has tarnished its credibility and remains as a ticking time bomb. It said Tuesday's debt deal had served only to make the fuse an inch longer.

The agency said the "world rattling" debt fight had exposed a willingness of American politicians to "politicize the economics while trivializing the politics." In their fight for political advantage, it said, Washington politicians are threatening to detonate a "bomb of mass destruction" that will create shock waves around the world.

China holds the world's largest foreign exchange reserves at $3.2 trillion, with about two-thirds of that believed to be invested in dollars.

Despite the central bank's desire to diversify into other currencies, analysts said China has few viable alternatives for its massive earnings. The People's Daily acknowledged the same point in its commentary Tuesday.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid