Thanks Barack… China Expresses Fear Over Massive US Deficit
A GOP Representative told reporters that Chinese leaders expressed fear over the rising US budget deficit under President Barack Obama and the Democratic Congress.
Democrats this year have insisted that the US can spend its way out of debt.
Obama will quadruple the US budget deficit his first year in office.
Senior Chinese leaders have privately voiced fear over the soaring US budget deficit and are increasingly looking to diversify from the dollar, a Republican congressman said.
“We heard across the board — in private — substantial, continuing and rising concern,” Representative Mark Kirk said after a trip to China that included talks with government officials and central bank chief Zhou Xiaochuan.
“It’s clear that China would like to diversify from its dollar investments,” the lawmaker said at the Center for Strategic and International Studies, a Washington think-tank.
Kirk’s assessment differed with that of Treasury Secretary Timothy Geithner, who said last week on a separate visit that Chinese leaders had expressed “justifiable confidence” on the future of the recession-hit US economy.
Kirk traveled with Representative Rick Larsen, a member of President Barack Obama’s Democratic Party, who also painted a less gloomy picture of Chinese officials’ views.
China is the largest creditor to the United States with some 700 billion dollars invested in Treasury bonds. Zhou earlier this year floated the idea of replacing the dollar with a basket of currencies as the benchmark global unit.