US debt crisis infuriates China
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China's Foreign Ministry has welcomed America's action to lift its debt ceiling, although the country's state-controlled media say the damage the crisis has done to the US dollar's standing cannot be undone. Foreign Ministry spokeswoman Hua Chunyuan spoke to reporters hours after the US Congress passed legislation to end its standoff and the threat of government default. China's state-controlled media, however, were less forgiving than the Foreign Ministry. They continued calls for the dollar's replacement as the world's premier unit of exchange that they had started at the beginning of the standoff. The People's Daily, for example, said US dollar hegemony has been universally condemned since the 2008 global financial crisis. Recent currency swap deals to bypass its use, it added, were spurring the emergence of the Euro and the yuan as alternatives. The Nan Fang Daily, meanwhile, said the Chinese government's strategy of currency internationalization was advancing steadily. The dollar's abuse, it said, was making the yuan more attractive. China holds about $1.3 trillion in US treasuries and that makes it America's biggest creditor. Rather than a sober look at reality, experts say it is anger at the shameful way America has been treating the country it owes so much money to that is prompting predictions of the dollar's replacement. The EU's debt crisis, they point out, means the Euro still has huge confidence issues of its own. And the renminbi's share of global trade and reserves is still miniscule. If the analysts are right, then, still America may be able to push itself to the brink of default several times more, before China really starts looking for other countries to lend its huge reserves to.