BEIJING – China's premier didn't say it in so many words, but the implied warning to Washington was blunt: Don't devalue the dollar through reckless spending.
Premier Wen Jiabao's message is unlikely to be misunderstood at the White House. It is counting on Beijing to help pay for its stimulus package by buying U.S. bonds. China already is Washington's biggest foreign creditor, with an estimated $1 trillion in U.S. government debt. A weaker dollar would erode the value of those assets.
"Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said at a news conference Friday after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."
The appeal suggested the outlines of Chinese President Hu Jintao's stance when he meets with President Barack Obama at an April 2 summit in London of the Group of 20 major economies on possible remedies for the global crisis.
Wen gave no indication whether Beijing wants changes in U.S. policy. But economists said his comments reflect fears that higher U.S. budget deficits from Washington's $787 billion stimulus package could drive down the dollar and the value of China's Treasury notes.
"China is telling the U.S. to be careful, not to overspend and keep an eye on the dollar," said Kelvin Lau, regional economist at Standard Chartered in Hong Kong. "There are risks that China cannot control, so they're depending on the U.S. to maintain fiscal prudence and keep the dollar reasonably stable."
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China should but out.
ReplyDeleteWe should take this advice and watch our deficit spending, better yet eliminate it and make an all out effort to pay off the national debt, foremost that of China so we cannot be threatened by their economic policies. Think about it: we borrow from foreign countries to keep our military afloat in some 160 countries, yet the deficit spending we engage in to enable this military spending is provided by foreign countries.
ReplyDeleteUh huh...You mean that Amero you'll have to trade your useless US dollar for 10-20 cents on the dollar for...that Amero...yes...good luck with that...China will be sure to buy up all those depressed public/private assets with there war chest of cash while Americans scurry for change in their couch..
ReplyDeleteThe gov will ban chinese investment. Duh
ReplyDeleteuh... this country is running off chinese investments.
ReplyDeleteIf the Amero flies, China already holds billions of Amero's that was let out a couple of months ago. If the Amero doesn't fly, then they have some memorabilia.
ReplyDeleteMaybe you Americans should be focused on feeding your fat asses instead of worrying about China since you outsourced that as well...
ReplyDeleteNever write off america
ReplyDeleteYa..You're right..You'll just go to war with China and start WWIII..That's your answer to everything.
ReplyDeleteWe won't deny it!
ReplyDeleteNever write off America? You better read the book "When Giants Fall". America is OVER.
ReplyDeleteLink
Oh geez if America is over then so is the rest of the world just like the fall of the Roman Empire. Another dark ages anyone?
ReplyDeleteThe rest of the world is not over because the US falls. The US is not the only country on the planet. There will be a transfer of wealth. Like an olympic runner you can't be #1 forever. EVERYTHING ENDS.
ReplyDeletethe US is planning to default. Either China will watch their investment evaporate or choose to go to war with US. of course China is "worried".
ReplyDelete