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China state press slams US debt purchases
2009-06-01
BEIJING (AFP) - China's state press expressed opposition to massive purchases of US debt, the second day of a visit by US Treasury Secretary Timothy Geithner. One of Geithner's goals is to reassure Chinese leaders that their nearly 800 billion dollars in US assets are safe despite a ballooning US budget deficit, and to urge Beijing to buy more, the China Daily said. As the largest holder of US Treasury bills, which are crucial to funding a US economic recovery, China is worried that its investment in the United States is at risk due to the global financial crisis, it said. "The government and experts have expressed concern that Washington's mushrooming deficit, generated by massive government borrowing to fuel its economic recovery plan... will undermine both the dollar and US bonds," the paper said. In an online poll, 87 percent of respondents said they considered China's dollar-assets unsafe, reflecting public opinion that is opposed to the government's policy of buying US bonds, the Global Times reported. "Ordinary Chinese people are discontent with the declining value of China's huge foreign exchange reserves denominated in US dollars," the paper said. "The reserve holdings have been the fruit of China's 30-year sustained economic growth... How to maintain and enhance the value of these holdings is a common concern of China's ordinary people," it said. "It will be regrettable if (Geithner) underestimates and shuts his ears to voices from China's civil society," it said in an editorial. While other papers predicted that China would continue to buy US Treasury bills, most expressed concerns over the falling value of China's assets. "Three questions for US Treasury Secretary Geithner," read a front page headline in the official Economic Information Daily. "How big will the United States allow its fiscal deficit to become? How do you propose implementing fiscal discipline? How will you maintain the stability of the dollar after the crisis?" it said. Geithner is scheduled to leave China late Tuesday after meetings with President Hu Jintao and Prime Minister Wen Jiabao, US officials said.
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