Top creditor China delivers unexpected fiscal demands to U.S. after historic credit downgrade
August 6, 2011
American President Obama bows before the Communist leader.
For months now late-night comedians have joked about China being the United States' largest creditor, more than $1.2 trillion in loans held by that country.
"Here's how bad our credit is now," Jay Leno said this week. "President Obama just asked China for another loan. But they won't give it to him unless his mother-in-law co-signs."
No more jokes now.
Following Friday's unprecedented credit downgrade of the federal government by Standard & Poor's (from AAA to AA+ with a negative outlook), China's official voice, the New China News Agency, demanded Saturday that America "learn to live within its means." And it suggested the U.S. might want to reduce its military defense spending further to make timely payments.
The agency's official commentary added:
China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets.
Merit aside, Americans are unaccustomed to such demands by other countries. Any national embarrassment or resentment could take the form of further damage to President Obama's job approval, now in the low forties, Americans' sense that the country is on the wrong track, now 66%, and on the Democrat's reelection chances on Nov. 6, 2012
Full story: http://latimesblogs.latimes.com/washington/2011/08/china-demands-us-cure-its-debt-problems.html
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