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Subject:
China looses its nerve - requests US to behave financially-Obama all set to ruin their sleep
Necromancer
3/25/2009 3:25:43 AM
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He called on Washington "to honour its words, stay a credible nation and ensure the safety of Chinese assets". China had worked to diversify its $2tn-worth of foreign exchange reserves, although it remains the single largest holder of US government debt, which accounts for about half of its stockpile.
Washington needs to continue selling treasury notes to fund its $787bn stimulus package. Last month, the secretary of state, Hillary Clinton, urged Beijing to maintain its stock as she visited China.
"They are worried about forever-rising deficits, which may devalue treasuries by pushing interest rates higher," Frank Gong, a JP Morgan economist, told Reuters. "Inside China there has been a lot of debate about whether they should continue to buy treasuries."
Any change would be gradual because abrupt action would punish the dollar ? damaging the value of existing holdings and further hitting the sale of goods to the US, its biggest export market.
Wen said it would be difficult but possible to reach China's 8% growth target. Independent economists suggest the figure could be as low as 5% ? enviable for most major economies, but potentially too low to keep unemployment down.
Beijing announced a 4tn yuan (about £400bn) plan in November, but Wen promised: "We have prepared enough ammunition and we can launch new economic stimulus policies at any time."
He said years of growth and prudent management had left more leeway to run a larger fiscal deficit and take on more debt. "The most direct, powerful and effective way to deal with the current financial crisis is to increase fiscal spending ? the quicker the better," he said.
The premier acknowledged that unemployment was a "very serious" problem but said the country was still stable.
"I really believe we will be able to walk out of the shadow of the financial crisis at an early date," he said. "After this trial, I believe the Chinese economy will show greater vitality."
He promised to focus on job creation and give more help to smaller companies, which he said generated 90% of Chinese new employment. Many economists think the government has done too little to aid entrepreneurs.
Figures released this week show a mixed picture for the Chinese economy, with exports slumping by more than 25% in February and retail sales weakening, but a sustained surge in bank lending which some analysts believe offers hope of a recovery.
www.guardian.co.uk/world/2009/mar/13/china-us-economy
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How do u say stupid mo%on in Chinese--- Wall street has no mercy for anyone. LOL. Say hello to capitalism. |
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