A top Chinese official chided Washington on Monday about the government shutdown and the debt-ceiling impasse, fretting that the political gridlock could leave the economy of America’s top foreign creditor in a jam.
Vice Finance Minister Zhu Guangyao told reporters that he understands the White House is working to resolve the double-edged crisis, but expressed impatience with the lack of progress.
“We have to see that the clock is ticking,” Zhu said, according to Agence France Presse.
“The executive branch of the U.S. government has to take decisive and credible steps to avoid a default on its Treasury bonds,” he said.
China holds $1.2 trillion in U.S. Treasury bonds, more than any other country. It also wants to protect its U.S. investments — $54 billion last year alone, according to one estimate.
If Republicans and Democrats can’t come to an agreement to raise the U.S. debt ceiling by Oct. 17, the government will risk defaulting on its bills—a scenario that China warned would have consequences beyond America’s borders.
“As the world’s largest economy and the issuer of the major reserve currency in the world, it is important for the U.S. to maintain the creditworthiness of its Treasury bonds,” Zhu said, according to AFP.
“It is important for the U.S. economy as well as the global economy.
“We hope that before Oct. 17, the U.S. will take credible steps to address its disputes over the debt ceiling in a timely fashion, avoid a default and ensure the safety of Chinese investments in the U.S. and ensure the process of global economic recovery will not be seriously affected by this,” he said.
U.S. Treasury Secretary Jack Lew warned over the weekend that Congress was “playing with fire” as the deadline for raising the debt ceiling draws ever closer.
Stocks slumped in Monday’s opening, although they recovered somewhat later in the day with some investors confident that a deal to avoid default would be reached.