Saturday, March 14, 2009
Big trouble in Big China: Worries about T-bills
A prominent Chinese official voiced strong and blunt concerns yesterday about his country's $1 trillion investment in U.S. Treasury bills, citing poor American financial plans to resolve its various crises.
The unprecedented statement should send chills through U.S. officials who are counting on the Chinese to buy much of the new debt being issued by the Obama administration.
We also could see the Chinese demand more assurance on the value of the T-Bills being sustained. And that would mean more money from us -- naturally. We also will see new Chinese military movement into previous restricted lands, knowing our nation cannot fight nor really protest actions against our nation's largest creditor.
Folks, this is as big as it gets on the world scene.
The New York Times writes:
BEIJING — The Chinese prime minister, Wen Jiabao, spoke in unusually blunt terms on Friday about the “safety” of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to offer assurances that the securities would maintain their value.
Speaking ahead of a meeting of finance ministers and bankers this weekend near London to lay the groundwork for next month’s Group of 20 summit meeting of the nations with the 20 largest economies, Mr. Wen said that he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.
As the financial crisis has unfolded, China has become increasingly vocal about what it perceives as Washington’s mismanagement of the global economy and financial system, joining a chorus of foreign critics of unbridled American capitalism. On Thursday, for example, France and Germany rebuffed American calls to coordinate a global stimulus package at the G-20 meeting, saying financial regulation should come first.
In January, Mr. Wen gave a speech criticizing what he called an “unsustainable model of development characterized by prolonged low savings and high consumption.” There was little doubt that he was referring to the United States.