This content is from: Innovation

China Watching US Debt Ceiling Debate Closely

The Chinese government has said that it is watching the U.S. discussion over whether to raise the country’s debt ceiling, and increased pressure on the Obama administration to curb the deficit, according to Bloomberg.

The Chinese government has said that it is watching the U.S. discussion over whether to raise the country’s debt ceiling, and increased pressure on the Obama administration to curb the deficit, according to Bloomberg. On Friday, China’s vice-finance minister, Zhu Guangyao, told reporters that officials “are paying close attention to the domestic discussion in the U.S. on debts and deficits.” Zhu continued to say, “We hope the U.S. can take effective measures toward fiscal reorganization.” The increased attention comes with China holding a world-leading $1.15 trillion in Treasuries at the end of February.

Cliff Tan of Societe Generale highlighted China’s role as “probably the most important customer” for U.S. Treasuries, and said, “In the event of the unthinkable happening in Congress failing to raise the debt ceiling, you’re going to have a major earthquake in global fixed-income markets.” Zhu encouraged the U.S. to “build a solid fiscal foundation for the long-term sustainable growth of the U.S. economy,” and also offered his commitment to continue improving the currency system and exchange rate mechanism for the yuan.

Click here to read the story from Bloomberg News.


Related Content