China to “Confront” U.S. over Economic Policy

An interesting turn of phrase in title of this Fox News article. I sense our position as top dog in the world is pretty much over:

WASHINGTON — Five years and one financial crisis since the United States and China commenced regular high-level economic talks, fast-growing Beijing might have the upper hand this week in the latest round of discussions between the world’s two biggest economies.

China faces threats of penalties against goods shipped to its largest foreign market unless it does more to end what U.S. manufacturers say are unfair trade practices, including currency manipulation, that have cost American jobs.

At the same time, America’s biggest foreign creditor wants assurances that its $1.2 trillion in U.S. Treasury holdings are safe despite uncertainty in Washington over how much money the U.S. can borrow to pay its bills. If Congress fails to increase that borrowing limit before August, that probably would send interest rates soaring and reduce the value of those Chinese investments.

While analysts don’t foresee major breakthroughs at the talks Monday and Tuesday, China’s expanding economic might will give it greater leverage now.


At the meetings, China is expected to raise concerns about the standoff between the administration and Congress on raising the government’s $14.3 trillion borrowing limit. Geithner has told Congress that the U.S. could default on its debt if the limit isn’t raised by Aug. 2.

“The Chinese are concerned about this issue because they hold a lot of U.S. debt,” said Prasad. “The Chinese are astounded that the U.S. government would let the debate get to the stage where there is even a remote possibility of a default.”

China is worried about our finances – expect their dumping of our treasuries to accelerate.



2 thoughts on “China to “Confront” U.S. over Economic Policy

Comments are closed.