Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

China airs fears on US debt, dollar: lawmaker

Posted by on Jun. 9, 2009 at 2:23 AM
  • 2 Replies

Senior Chinese leaders have privately voiced fear over the soaring US budget deficit and are increasingly looking to diversify from the dollar, a Republican congressman said.

"We heard across the board -- in private -- substantial, continuing and rising concern," Representative Mark Kirk said after a trip to China that included talks with government officials and central bank chief Zhou Xiaochuan.

"It's clear that China would like to diversify from its dollar investments," the lawmaker said at the Center for Strategic and International Studies, a Washington think-tank.

Kirk's assessment differed with that of Treasury Secretary Timothy Geithner, who said last week on a separate visit that Chinese leaders had expressed "justifiable confidence" on the future of the recession-hit US economy.

Kirk traveled with Representative Rick Larsen, a member of President Barack Obama's Democratic Party, who also painted a less gloomy picture of Chinese officials' views.

China is the largest creditor to the United States with some 700 billion dollars invested in Treasury bonds. Zhou earlier this year floated the idea of replacing the dollar with a basket of currencies as the benchmark global unit.

Kirk said that Chinese leaders were sharply critical in private of the US Federal Reserve's policy of "quantitative easing" -- a form of flooding the financial system with cash, which critics deride as printing imaginary money.

The United States has been running large budget shortfalls since the tenure of president George W. Bush.

Government officials estimate a deficit of 1.841 trillion dollars for the 2009 budget.

Kirk, a former diplomat who remains an active reservist in the US Navy, is seen as a rising star in the Republican Party and is eyeing a run next year for Obama's former US Senate seat in Illinois.

He said he told the Chinese that the budget deficit could be even bigger than predicted, due in part to the rising costs to the US economy of health care.

"One of the messages I had -- because we need to build trust and confidence in our number one creditor -- is that the budget numbers that the US government has put forward should not be believed," Kirk said.

"Congress is actually going to spend quite a bit more," he said.

Larsen, a Democrat from Washington state who co-chairs the congressional US-China Working Group with Kirk, agreed that Chinese leaders were seeking a signal from the United States on taming the giant deficit.

But Larsen said the major lesson he took home was that China, contrary to some US critics' views, was not trying to dethrone the United States as a major world power.

"The Chinese leaders that we met with were very interested in seeing the United States be successful," Larsen said.

"They were not looking to themselves to lead the global economic recovery; they were looking to the United States to lead that recovery," he said.

Larsen and Kirk's trip was one of a series of high-profile US visits to China.

House Speaker Nancy Pelosi led a separate congressional delegation that discussed cooperation on climate change between the world's two biggest greenhouse gas emitters.

Pelosi, a longtime advocate of human rights, said she also pressed China to release human rights activists from prison.

http://www.france24.com/en/20090609-china-airs-fears-us-debt-dollar-lawmaker


by on Jun. 9, 2009 at 2:23 AM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-2):
resamerie
by Platinum Member on Jun. 9, 2009 at 2:38 AM

I bet that China is afraid for the value of the American dollar. We are so indebted to them right now it's not even funny. I heard another aspect of this tonight. Since our new government owns 60% of GM/Chrysler, and we owe China, ummmm....hello? Does that mean that the more the government takes over privatized business the more that those businesses are going to be foreign owned for the debt that we owe? I said it before and will say it again....SOME PEOPLE NEED TO WAKE THE F**CK UP because all of this is happening at such an alarming rate that our heads are spinning.   





  • angel-1-1-1-2.jpg picture by kfpep
stormcris
by Christy on Jun. 9, 2009 at 2:47 AM

Well outside of that my main concern is the fact that faith in our dollar is keeping it afloat we are going to be SOL if they go over to another currency. Where China goes atm the world might follow. The US keeps boasting we make the money and it will be hard for people to find a different currency. Not really, not with the entire world losing faith in it all at once. The Euro is primed to take over so is the Yen.

Quoting resamerie:

I bet that China is afraid for the value of the American dollar. We are so indebted to them right now it's not even funny. I heard another aspect of this tonight. Since our new government owns 60% of GM/Chrysler, and we owe China, ummmm....hello? Does that mean that the more the government takes over privatized business the more that those businesses are going to be foreign owned for the debt that we owe? I said it before and will say it again....SOME PEOPLE NEED TO WAKE THE F**CK UP because all of this is happening at such an alarming rate that our heads are spinning.   


Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)