Beijing concerns grow over US debt woes

In a frank editorial, China's official state news agency, Xinhua, yesterday launched a fierce broadside against the United States, saying its current fiscal woes signalled the need for "a de-Americanised world".

"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-Americanised world," ran the editorial, which was carried in English in the Global Times, but widely reported in the Chinese-language media.

"Instead of honouring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies," it read.

Political capital
It's the clearest sign yet that China is quite prepared to make political capital out of Washington's woes.

Some of the spiky commentary comes out of China’s fears that its debt holdings in American government bonds could be under threat.

Premier Li Keqiang told US secretary of state John Kerry last week that Beijing was "highly concerned" about Washington's debt ceiling problem and its failure to resolve its debt crisis.

China is the largest overseas holder of US government debt and has issued many warnings about the danger of a US default. The US treasury says Beijing holds nearly €1 trillion in Treasuries, and it also has US agency debt.

The commentary went on to say how the world was still crawling its way out of an economic disaster “thanks to the voracious Wall Street elites” and bemoaned Washington’s failure to embrace financial reforms. It also called for a reserve currency that will reduce reliance on the dollar.

“The US government has gone to all lengths to appear before the world as the one that claims the moral high ground, yet covertly doing things that are as audacious as torturing prisoners of war, slaying civilians in drone attacks, and spying on world leaders,” it continued.

Much of the editorial was political in tone and echoes some of the sentiments that were commonly expressed in the days before China truly emerged as a world power.