Tuesday, 8 October 2013

China intervenes in the US shutdown

The current US shutdown has the potential to cause China a serious headache.

China currently holds something like £740 billion in US treasury bonds making it the largest holder of US debt.

The shutdown, if not resolved, could lead to the US defaulting on its debt obligations which would have a serious knock on effect on the global economy.

Zhu Guangyou is quoted as saying "the clock was ticking" for the US.

For BBC coverage see:

China tells US to avoid debt crisis for sake of global economy [outside link]

 A senior Chinese official has warned that the "clock is ticking" to avoid a US default that could hurt China's interests and the global economy.

China, the US's largest creditor, is "naturally concerned about developments in the US fiscal cliff", vice finance minister Zhu Guangyao said.

Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.
He asked that "the US earnestly take steps to resolve" the issue.



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