Chinese media attack US over debt battle
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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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