China Lectures Obama as Shutdown Enters Week Two with No End in Sight

As the U.S. government moved into the second week of a shutdown on Monday with no end in sight, Chinese officials warned President Barack Obama and Congress Monday that the "clock is ticking" to avoid a U.S. default that could hurt China's interests and the global economy.

China, the United States' largest creditor, is "naturally concerned about developments in the US fiscal cliff," vice finance minister Zhu Guangyao told the BBC.

"The executive branch of the US government has to take decisive and credible steps to avoid a default on its Treasury bonds," he said, referring to President Obama.

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"It is important for the US economy as well as the global economy."

"We hope the United States fully understands the lessons of history," Mr Zhu said, referring to a similar deadlock in 2011 that led to a downgrade of the US "AAA" credit rating.

A deadlocked U.S. Congress, meanwhile, confronted an October 17 deadline to increase the nation's borrowing power or risk default.

But Republican House of Representatives Speaker John Boehner vowed not to raise the U.S. debt ceiling without a "serious conversation" about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default.

The last big confrontation over the debt ceiling, in August 2011, ended with an 11th-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if there was a default.

A similar last-minute resolution remains a distinct possibility this time.

Equities investors were unnerved by the apparent hardening of stances over the weekend. U.S. stocks opened sharply lower on Monday and European shares fell to a four-month low.

In comments on Sunday television political talk shows, neither Republicans nor Democrats offered any sign of impending agreement on either the shutdown or the debt ceiling, and both blamed the other side for the impasse.

Via: Newsmax

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