China and Japan warn US over default threat

CHINA has warned the United States to resolve its budget crisis for the sake of the American and global economy.

Chinese vice foreign minister Zhu Guangyao said “the clock is ticking” and called on politicians to break the deadlock and agree an increase in the debt ceiling before 17 October, when it is projected the US Treasury will run out of money.

“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,” Guangyao told reporters in Beijing yesterday. “This is the United States’ responsibility.”

As the US’s biggest foreign creditor, China is “naturally concerned about developments in the US fiscal cliff”, the minister said.

“We hope the United States fully understands the lessons of history,” he added, referring to the credit rating downgrade that the US suffered after a similar impasse over the debt ceiling in 2011.

Yesterday the US government moved into the second week of a shutdown.

A spokesman for Barack Obama said the President would be willing to accept a short-term ceiling increase in order to get past the crisis date.

Obama added he is willing to negotiate with Republicans over healthcare and budget issues, but only after Congress agreed measures to end the shutdown and raise the debt ceiling.