Tue 23 May 2023:
China called United States on Tuesday to tackle its debt crisis and “not pass it onto” the rest of the world.
Mao Ning, China’s Foreign Ministry spokeswoman, however, urged Washington to adopt “responsible fiscal and monetary policies,” the Chinese daily Global Times reported.
The U.S. is faced with a looming default deadline as negotiations across the political divide in Washington continue over raising the $31.4 trillion debt ceiling, or the amount the U.S. is legally allowed to borrow.
U.S. President Joe Biden and House Speaker Kevin McCarthy on Monday held a “productive” meeting at the White House to discuss the debt limit, but no agreement was reached ahead of the June 1 deadline set by the U.S. Treasury.
Meanwhile, Mao criticized Washington for what Beijing called an “unreasonable crackdown” on the Chinese social media app TikTok.
Urging Washington to “respect the market economy and fair competition rules,” Mao said the U.S. should “stop the unreasonable crackdown on foreign firms, and provide an open, fair, and non-discriminatory business environment.”
‘Highly likely’ to default by early June
On Monday, Treasury Secretary Janet Yellen issued her third letter to Congress in as many weeks, urging legislators to act “as soon as possible”.
Yellen’s missive on Monday emphasised that “it is highly likely” the US government could begin to default on its payments as early as June 1, a deadline less than a week and a half away.
She also warned that the political deadlock has already resulted in real-world consequences. “We have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June,” she wrote.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
Economists have predicted that if the US government defaults on its loans, it could potentially trigger a recession and drop the country’s credit rating, resulting in higher interest rates and greater overall strain on the economy. Veterans, Social Security recipients and other individuals and businesses reliant on government funds could see their payments stopped or delayed.
SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES
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