Chinese media attack US over debt battle

Last Updated: Saturday, July 30, 2011 - 00:36

Beijing: Chinese media attacked the
United States over its debt wrangling Friday, warning that
lawmakers could depress the value of the dollar, fuel global
inflation and plunge the world into another recession.

The United States must raise the USD 14.3 trillion
debt ceiling by August 2 or risk defaulting on its repayment
obligations, a move that would send seismic shocks through the
global economy.

Raising the debt ceiling could hurt the US dollar and
trigger a "torrential flood" of liquidity into the global
economy, fuelling inflation in emerging economies such as
China, the Communist Party mouthpiece People`s Daily said
today.

The report in the paper`s overseas edition followed a
stinging commentary by China`s official Xinhua news agency
accusing US lawmakers of being "dangerously irresponsible".

Taking an opposite line to the People`s Daily stand
against raising the debt ceiling, Xinhua warned that a debt
default ran the risk of "strangling the still fragile economic
recovery".

"It is unfortunate and disappointing that when
political leaders in Washington spar over who is doing good
for their country, they take little account of the world`s
economic soundness," Xinhua said yesterday.

The report underscores growing anxiety in China over
the health of the US economy, which is struggling to recover
from the global crisis and is now locked in a bitter battle to
raise the debt ceiling and avoid default.

PTI



First Published: Saturday, July 30, 2011 - 00:36

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