Senior China official urges cut in US debt holding

[inchhigh]

Senior China official urges cut in US debt holding
Tue Apr 4, 2006 5:26 AM ET
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By Kevin Yao and Benjamin Kang Lim

BEIJING (Reuters) - China should trim its holdings of U.S. debt, a senior Chinese official said, rattling markets on Tuesday in the run-up to a visit by President Hu Jintao to Washington this month.

As China is a leading financier of the U.S. current account deficit and holds the world's largest foreign exchange reserves, the comments from Cheng Siwei, a vice chief of the national parliament, sent the dollar and U.S. government bonds lower.

The comments could add to the contentious issues that will come up during Hu's visit, notably what some U.S. politicians and companies see as currency manipulation by China, accused of holding down the yuan to gain an unfair trade advantage.

Hong Kong's Beijing-funded Wen Wei Po newspaper carried Cheng's comments, made in Hong Kong on Monday.

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-04T092648Z_01_PEK195586_RTRIDST_0_BUSINESSPRO-ECONOMY-CHINA-USA-DC.XML

[rodeodance]

1. well, this will shut up any critics!

[inchhigh]

2. I think this DU post relates well

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2205784

[Broadslidin]

3. The Sooner, The Better In Putting An End To The Debt Crazed Petro-.....

Imperial United States and its global military
oil-protection occupation forces.

[leftchick]

4. ruh

roh!

[stop the bleeding]

5. ruh roh is right raggy

This should be interesting to say the least.

[leftchick]

6. yeah

interesting in a bad way. :(

[EVDebs]

7. Combine this with Chavez's $50 bbl oil and voila ! W's economy collapses

That is W as in World.

[Canuckistanian]

8. Ha! How does it feel, Shrub?

To have a government that makes decisions about your money - and you have absolutely no say in it?

You can't threaten, lobby, smear or bribe them.

And it looks they're holding all the cards.

[AndyA]

9. Folks, this could be ominous. It bears watching.

Unfortunately, the Bush economy is our economy as well. It's not our fault that there's a fool at the helm.

Kicked and recommended.

[4_TN_TITANS]

10. Now this is getting scary....

China begins the steady push down to bring the US to it's knees.

[flyarm]

11. and don't think * and snow don't know it..snow is wanting to bail out

anf * just had 2 trillion minted that we basically don't have and no one can look into it...i am not too keen on this stuff..but i will say this..

my dad fought in WWII..and if he knew how much we have now borrowed from a communistic country..well i will put it this way..dad is rolling over in his grave..so is my father in law..

and for those who fought in Vietnam..against the proliferation of communism..well i wonder how they are feeling right now..about being the biggest debtor nation in the world and most of the debt to a communistic country

most of my life we were in the cold war trying to defeat communism..it is so foreign to me that we now owe most of our debt to communist china..

its appalling to me..

makes my blood boil..

fly

[maseman]

12. One problem

China is in a pinch also. So they bring down the US debt load. Of course that will have very bad repercussions for the US economy. But it will also very potentially shatter the Chinese economy. The US buys more of their cheap crap per capita then any other nation in the world. If we buy less widgets and gizmos that they are cranking out, then that obviously hurts their economy. In order to export lots of "stuff," you have to have a country willing to import the "stuff." China is enjoying unprecedented growth but that would come to a halt if our economy tanks.

They know that and I am sure it is a major reason they have been very cautious to not make any bold moves.

[cliss]

14. Yes, the currency "game" is a classic example

of the game called "Prisoner's Dilemma". China wants the US to be more responsible fiscally. The US owes China about $860 billion. We are now the world's largest debtor nation.

All countries who hold US currency are upset about their holdings, not just China. But what can they do? If even ONE country dumps its dollar holdings, it could set of a chain event that could cause a worldwide depression.

None of them want that. It's a gigantic game of Chicken, and the US is daring them to do something about it.

So what can be done about this deadbeat?

Unfortunately, China doesn't have many options.

[gasperc]

13. well we are officially fucked

don't even have to read the headline before knowing we're fucked

Thanks Georgie, but I guess it'll be up to the next president to figure out this turd on top of the Iraq fuck-up