China: US must stop derailing global economy

China: US must stop derailing global economy
Thu Oct 10, 2013 08:15:20

Chinese state media hit out at US lawmakers Thursday, a week ahead of a potential US default, urging them to "stop manufacturing crises" that threaten the global economy.

The China Daily newspaper wrote in an editorial that five years after the global financial crisis "it is pitiful that the US is now putting the fragile world recovery under renewed threat with its mind-boggling political infighting".

The paper, which is run by the Chinese government, added: "The astonishing failure of the US Congress to put national needs before their partisan interests has sparked fears among investors and governments around the world that maybe it is time to think about the unthinkable."

The newspaper's sternly-worded missive comes as Washington remains deadlocked ahead of the October 17 deadline by which time it must raise its $16.7 trillion borrowing ceiling or risk defaulting on its debt obligations.

The warning also comes two days after the International Monetary Fund cut its forecast for world economic growth for 2013 and 2014, citing both US political infighting and China's slowing growth as particularly worrisome factors.

"The prospect of dimmer global growth predicted by the International Monetary Fund should make it a matter of urgency for US politicians to stop manufacturing crises," the paper stated.

China is the largest foreign owner of US debt, holding $1.277 trillion in Treasury bills in July, according to the latest available US government figures.

Beijing has in recent days stepped up its calls for Washington to come to an agreement on raising the debt ceiling, highlighting the "inseparable" relationship between the two countries' economies.

On Monday, Chinese Vice Finance Minister Zhu Guangyao told reporters in Beijing that "the clock is ticking" and warned a potential US default would have global repercussions.

"We hope that before October 17, the US will take credible steps to address its disputes over the debt ceiling in a timely fashion, avoid a default and ensure the safety of Chinese investments in the US and ensure the process of global economic recovery will not be seriously affected by this," Zhu said.

In Washington, the White House was scrambling to hold meetings with members of both parties in the hope of forging a deal to resolve both the debt-ceiling debacle and the partial shutdown of the US federal government.

But Republicans have been hesitant to agree to any deal without concessions from Democrats on reforming federal spending and entitlement programs.


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