China finds vindication in U.S. debt crisis

(CBS News) 

While Americans may be breathing a sigh of relief over news of a debt deal, our country's biggest creditor may not.

So far there's been no formal reaction from the Chinese government to the agreement reached by lawmakers, reports CBS News correspondent Celia Hatton, but don't expect sighs of relief from Beijing.

Hatton says officials are more likely to repeat complaints that Washington's infighting over the debt ceiling was "irresponsible" and "immoral".

President Obama: Deal reached on debt crisis
Americans unimpressed, but glad to see debt deal
Debt deal likely to put hurt on states, poor

Ordinary Chinese people seem to agree. Chinese websites have been flooded with comments criticizing Washington for seemingly ignoring the interests of its single largest investor, China, and thus putting more than $1.2 trillion dollars in Chinese debt holdings at risk.

Not surprisingly, the idea that their government is investing Chinese money in assets that are losing value creates a great deal of concern for a lot of Chinese, and a great deal of anger, explains Peking University finance professor Michael Pettis.

The whole episode has greatly boosted Chinese awareness of the interdependence of the two nations' economies. Beijing funds U.S. government debt by its purchase of U.S. Treasurys, propping up the American economy so U.S. consumers will continue buying products manufactured in China, keeping China's economy growing too.

Chinese officials are trying to get some political mileage out of the U.S. debt debacle. They've publicly criticized Washington's growing financial problems, though few believe the Chinese government was ever truly worried its U.S. debt holdings would go belly-up.

"All they really care about is will the U.S. eventually pay all its debt," says Pettis. "I don't think anyone doubts the U.S. will, so again I think this is really for domestic political reasons more than for real concerns about the value of their portfolio."

China's state-controlled media is also highlighting the supposed dangers of the U.S. democratic system - painting a picture that shows the high-stakes political infighting in Washington holding the global economy hostage.

[KnowerseekerReturns]

"China's state-controlled media is also highlighting the supposed dangers of the U.S. democratic system...." -- More like the dangers of the U.S. *plutocratic* system.

[samXXkiley]

coucou,
""""Hatton says officials are more likely to repeat complaints that Washington's infighting over the debt ceiling was "irresponsible" and "immoral". """"
=================
pendant quelques jours, l'Amérique a paralysé le monde
Son message est clair "économies du monde", vous dépendez de moi., Parce que je suis première économie du monde

..............
in a few days, America has crippled the world
His message is clear, " world's economies", you depend on me., Because I'm the world's largest economy
"au revoir"

[KnowerseekerReturns]

Hm. Haven't thought of it that way before.

[Bojax39]

"China's state-controlled media is also highlighting the supposed dangers of the U.S. democratic system - painting a picture that shows the high-stakes political infighting in Washington holding the global economy hostage."

Very well. China seems to want out, let her out.

NO MORE CHINESE IMPORTS! We could stop buying all that unsafe, toxic Chinese made garbage merchandise and force our traitorous, human rights hating big manufacturing businesses to bring all those jobs home. And while we're at it, kill NAFTA too.

Forcing those thieves to hire American workers for American wages so we can have American made quality again ought to boost our economy enough to pay back China in fairly short order and buy back all Chinese investments here. After which we'll no longer need to deal with China. EVER.

Yeah, I know. Simplistic solution. But sometimes starting places are simple by nature. Besides, this corrects the bad mistake American business made by climbing in bed with the Red Chinese in the first fuggin place, no?

[rabauldevil]

@Bojax

First of all, stopping Chinese imports will not alleviate the US debt crisis. That particular problem was all home grown and had nothing to do with the Communist Chinese government (remember the sub-prime loan fiasco and Bush's disasterous forays into Iraq and Afghanistan?). So please don't bring up the canard of cheap Chinese imports.

Like it or not the position of most Chinese on America being fiscally irresponsible holds water. The recent shenanigans in Congress (and it's the Congress' fault, not the POTUS since Congress is charged with arraning the federal budget) doesn't help but reinforce this view.

The very fact that these very correct opinions comes from Mainland China (who are guilty of all those sins that people love to point out in these posts) should give one a sense about how urgent the fiscal problems of the US are for the nation and for the world in general. And to fling insults at China instead of addressing the problem just makes all accusations against the US that much more relevant; and certainly more relevant than any whining about cheap impots.

[KnowerseekerReturns]

rabauldevil, true, though there is one caveat: Our tech jobs that have been off-shored to China (and India) aren't bringing in any U.S. taxes to help with the deficit (or providing jobs to Americans). Whose fault is that? U.S. corporations and U.S. Congress. (On the other hand, it's understandable for other nations, such as China and India, to look out for themselves.)

[usadvisor101]

the most unfair nation in the world is going to complain about the USA after all that they have gained from the robber barons here??? the most unfair capitalist robber barons in the world, china is complaining??? what a joke.you cant import nothing into china. they are the worst country for free trade. no free speech. the majority work in slave labor compounds. they are the worlds largest counterfieters. the only reason they are willing to take on the USA debt is, teh big fat leech would die without the USA. the only reason they are doing well is because the lobbyist and lawmakers are controled by home depot,target and walmart. the modern day robber barrons are using china to max out profit and watch the morons wreck their environment so we can get a cheap flat screen, and they make out on the slave labor.

[rabauldevil]

Bottom line is that America is fiscally irresponsible and that irresponsibility affects the whole world. Bringing up the faults of China won't mitigate such a situation.

[stopoil]

How can any of those we want to believe in democracy be convinced of our system when we cannot govern and the system is obviously broken? Idiots! You have to pay your debts so raising the debt limit should not be the issue now. Make it an issue for the next election. This debacle only hurts USA credit, credibility, will raise interest rates, puts us in a recession, make deficit larger because of higher interest costs.... stupid, stupid stupid!

[myth1958]

Sooo. The People's Republic thinks Americans are "irresponsible and immoral" with this rancorous debate over raising the debt ceiling, Celia Hatton reports, allowing the Chinese to act all superior to the ways of the West. Compared to what, exactly? China's 'laudable' history of government-civilian relations? The way a handful of mostly male 'communists' dominate the economy, culture and even birth rate of a billion people? Can the U.S. really learn something here: we should convert to 'communism' and shed our profligate capitalist system? Don't make me laugh. Our prisons might be full but they don't hold very many political prisoners whose only fault was to criticize our government. Can the Peking regime say the same? And if we DID go communist would there be any consumer spending to waste on cheap plastic junk from PRC? Our citizens might be a little too busy getting sent to prison for shooting our mouths off, shooting our guns off and other offenses to buy the next Game Boy. Whenever the pot calls the kettle black it is always funny to watch.

[KnowerseekerReturns]

Capitalism is good... when it doesn't *run our government* like it does now. (That is called "plutocracy", BTW.) Democracy and capitalism don't mix.

[rightbehind]

Of course they do. They don't have the elite over there and they certainly don't allow corporations to dictate policy. What neocons like about them is they are communist. Neocons are alright with communism so long as they control it. What they don't like is socialism which mean the people control it.

[thetruthwillout]

Bravo! Great post!