china urges us to protect investors
Last Updated : GMT 09:07:40
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Egypt Today, egypt today
Last Updated : GMT 09:07:40
Egypt Today, egypt today

China urges US to protect investors

Egypt Today, egypt today

Egypt Today, egypt today China urges US to protect investors

Beijing - AFP

China on Thursday urged Washington to protect the interests of investors after ratings agency Moody's placed the United States' triple-A debt rating on a downgrade watch. China is by far the top holder of US debt, with holdings at $1.153 trillion in April according to US data, and has raised concerns about its investment in the past. "We hope the US government adopts responsible policy and measures to ensure the interests of investors," foreign ministry spokesman Hong Lei told reporters at a briefing. His comments came after Moody's Investor Service warned Wednesday it could downgrade the United States' triple-A rating because of rising prospects the US debt limit will not be raised in time to avoid default. The announcement came as US lawmakers try to hammer out a deal that would allow President Barack Obama to raise the country's debt ceiling to allow it to meet its repayment obligations. Republicans are refusing to lift the country's $14.29 trillion debt ceiling without deep government spending cuts, while they reject Democrats' demand that tax increases must be part of any sweeping deficit reduction plan. A downgrade could sharply raise US borrowing costs, worsening the country's already dire fiscal position, and send shock waves through the financial world, which has long considered US debt a benchmark among safe-haven investments. China has in the past raised worries that the massive US stimulus effort launched to revive the economy after the global downturn would lead to mushrooming debt that erodes the value of the dollar and its Treasury holdings. Beijing had been cutting its holdings of US Treasurys for five months in a row until March. The figure only increased slightly in April, US data showed. On Thursday, Chinese credit ratings agency Dagong said it had also put US sovereign debt on negative watch for a possible downgrade. Dagong said the ability of the United States to repay debt was likely to decline given its economic growth was expected to slow and fiscal deficits to remain high in the next couple of years. The prospect of a downgrade has hammered the dollar, which has tumbled since the end of last week after poor jobs data and the ongoing eurozone debt crisis The greenback fell to 78.79 yen in Tokyo trading from 78.98 in New York late Wednesday. The dollar was also lower after Federal Reserve chairman Ben Bernanke told legislators Wednesday that the central bank was "prepared to respond" if stimulus was needed to kickstart the ailing US economy. His comments signalled to some that he was keeping the door open for a third round of quantitative easing. The bank in June wound up its $600-billion "QE2" bond purchasing programme that aimed to boost the economy with easy liquidity.

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china urges us to protect investors china urges us to protect investors



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