China calls for a new world reserve currency.
As Republicans and Democrats in the US Congress are still negotiating to find a solution to end the government shutdown and avert a default, China, the US biggest creditor, has called on world economies to rely less on the United States.
“As US politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” said China state news agency Xinhua.
“Days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing,” the news agency said in an op-ed.
If the US Congress does not come to an agreement by Thursday™ deadline to extend Treasury™s borrowing authority the nation will default on debt for the first time in history. The current US debt ceiling is $16.7 trillion.
In reaction to the Xinhua™s editorial, the NBC News wrote that œdespite a desire to diversify its holdings, the Chinese government continues to buy US Treasury bonds out of political and economic necessity.”
China is the biggest investor in American public debt, with at least $1.3 trillion in holdings.
Also the New York Times wrote on Wednesday that China œdoes not have many options beyond wringing its hands.”
œDespite its efforts to steer its economy away from exports and toward domestic demand, China generates billions of dollars of excess cash that it needs to park somewhere. And for all the chaos in Washington, Treasury bonds remain a safer investment than most of the alternatives,” the Times wrote.
Xinhua had also repeated its call for a new reserve currency that would diversify China™s foreign exchange reserves in an attempt to avoid relying heavily on the US dollar.
ARA/ARA
Copyright: Press TV