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World Should ‘de-Americanise,’ Get New Reserve Currency – Says China
The looming prospect of a US default on debt prompted China to call for the world to “de-Americanise”, amid warnings of a new global recession.
In China, Xinhua, the official government news agency, said that as American politicians continued to flounder over a deal to break the impasse, “it is perhaps a good time for the befuddled world to start considering building a de-Americanised world.”
The jibe came as Christine Lagarde, the International Monetary Fund chief, raised the spectre of a repeat of the 2008 financial crash as hopes dwindled for a resolution of the crisis over the debt ceiling and partial government shutdown.
Call for New Resrve Currency – Bloomberg Video report: Oct. 14 – Bloomberg’s David Ingles reports on China criticizing the U.S. over the political deadlock, calling for a new reserve currency. He speaks to Susan Li on Bloomberg Television’s “First Up.”
PLEASE CLICK ON LINK TO WATCH 2MINUTE VIDEO:
Harry Reid, the leader of the Democrat-controlled Senate and Mitch McConnell, who heads the Republican minority, met on Sunday for “preliminary” talks following the acrimonious collapse of negotiations between the White House and Republicans in the lower chamber.
Jack Lew, the Treasury secretary, has said that the US will run out of money to pay its bills on Thursday if Congress does not authorise an increase in federal borrowing limits.
Ms Lagarde repeated her warning about the impact of failing to raise the debt ceiling following the fund’s annual meeting of finance ministers in Washington.
“If there is that degree of disruption, that lack of certainty, that lack of trust in the US signature, it would mean massive disruption the world over,” she told NBC’s Meet the Press programme. “And we would be at risk of tipping, yet again, into recession.”
Xinhua attacked America’s pre-eminent position in the world, adding that “such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated.”
State-run newspapers nonetheless have also noted the inseparable economic ties which bind China and the US together. China is the biggest foreign holder of US Treasury bonds, worth a total of $1.28 trillion according to American government data.
“The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonised,” said the commentary.
Back in Washington, Mr Reid did not strike a particularly optimistic tone as he described the first meeting with Mr McConnell. “I hope that our talking is some solace to the American people and the world,” was the best he could offer after leaving the discussions.
Republican congressmen from the House of Representatives earlier left the capital for today’s Columbus Day holiday after President Barack Obama rejected their proposal for a stop-gap six-week extension of the federal debt ceiling.
The Republican-controlled House, which would have to approve any deal, is not scheduled to meet until Monday afternoon as the partial government shutdown enters its third week.
In a rare piece of good news, several national landmarks, including the Statue of Liberty and Grand Canyon, re-opened to the public after individuals states agreed to pay for the running of the federal parks during the government shutdown.
By Philip Sherwell, New York
Malcolm Moore in Beijing, The Telegraph, UK – October 14, 2013