Avoid default on govt bonds- China to US
October 8, 2013, 8:58 am

The government shutdown forced US President Barack Obama to cancel a trip to Asia [Getty Images]

“The US is the world’s biggest economy and a major country issuing reserve currency. Safeguarding the debt is of vital importance to the economy of the US and the world,” China’s Vice Minister of Finance Zhu Guangyao told a press briefing.

China also said that it is the responsibility of the US to avoid defaulting on its bonds.

“This is the United States’ responsibility,” said Zhu, adding that China hopes the US will keep the recovery process in the US and the world going.

The vice minister of finance said the Asian nation is concerned about the fiscal situation and pointed out there is only one week before the October 17 deadline on raising the debt limitation.

The debt ceiling is the legal amount of money the US can borrow.

China has urged the US administration to speed up discussions with Congress.

Zhu advised the US Treasury Department to take the first step to ensure the interest payments of the government bonds and then pay the principles through the replacement of old debt by new.

The government shutdown forced US President Barack Obama to cancel a trip to Asia earlier while Chinese President Xi Jinping signed deals worth billions of dollars in Indonesia and Malaysia.

Talks over the US-EU trade deal and the Transatlantic Trade and Investment Partnership (TTIP), were also cancelled in Brussels due to President Obama’s decision to cancel.

Russian President Vladimir Putin had on Monday expressed support for Obama’s decision to stay back home to deal with the budget deadlock.

“If I were him I would not have come as well. Any leader of a state would have done the same,” President Putin said in Bali.

Meanwhile, Putin and the Chinese president met in Bali to boost growing ties between the two allies.

“We are developing economic ties. We are cooperating in some very sensitive areas, such as military technology cooperation and military affairs. Our service members have already conducted two major trainings, on land and in the sea,” said the Russian leader.

In a separate meeting with Xi, newly elected Prime Minister Tony Abbott said Australians “owed much of its prosperity to the rapidly growing trade relations” between the two countries.

On the opening day of the Asia-Pacific Economic Cooperation (APEC) 2013 Summit in Indonesia, Xi said China is now focusing more on improving the quality and efficiency of growth.

“China must undergo structural reforms, even if it involves a sacrifice of speed,” Xi said in Bali on Monday.

With inputs from Agencies