China to Monitor Implementation of US Debt Ceiling Bill

Posted August 2nd, 2011 at 8:55 pm (UTC-5)
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The governor of China's central bank says he welcomes passage of the U.S. debt ceiling bill, and will closely observe its implementation.

In a statement Wednesday, Zhou Xiaochuan said China hopes the Obama administration and Congress take responsible policy measures to deal with the U.S. debt issue, to help protect worldwide financial interests and investors in U.S. treasuries.

On Tuesday, China's state-controlled media said the last-minute deal to raise the U.S. debt ceiling postponed deeper problems that threaten the world economy.

In a commentary, the People's Daily newspaper said that while the threat of default has been avoided, America's debt problems are unresolved and likely to grow more serious. The newspaper is the most important mouthpiece for China's ruling Communist Party.

The commentary also said the American debt burden continues to cast a shadow over the U.S. economic recovery, and increases the risks faced by the rest of the world economy.

The People's Daily said that despite the debt concerns, the dollar remains the world's dominant hard currency, and other countries have no choice but to accept it. China is America's largest creditor outside the United States.