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China Welcomes Last-Minute US Debt Limit Deal

Foreign Ministry spokesman Hong Lei speaks during a press briefing in Beijing, China. (file photo)
China is welcoming a last-minute deal by Washington lawmakers to raise the debt limit and avoid a potentially catastrophic default.

Beijing's foreign ministry said on Thursday that the deal served U.S. interests and would also aid world economic stability and development.

Beijing's state media gave a more blunt assessment of the weeks-long fiscal standoff; an editorial in the Xinhua news agency accused U.S. lawmakers of "holding the whole world hostage" and warned that the impasse means "U.S. treasury bonds may no longer be a safe investment."

China is the largest foreign holder of U.S. government debt and has issued repeated warnings about the global impacts of a U.S. default.

Elsewhere, International Monetary Fund chief Christine LaGarde welcomed the deal, which allows the U.S. Treasury to borrow normally until February 7. However, she also urged U.S. lawmakers to "reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner."

Asian markets, which had been nervously awaiting the resolution of the U.S. crisis, showed little response on Thursday. Shares in Tokyo closed up .8 percent while Seoul added nearly .3 percent. Hong Kong, however, finished down .6 percent and Shanghai finished the day .2 percent lower.