According to NPR, as the U.S. teeters closer to the brink of debt default, the political stalemate is being watched closely by its biggest foreign creditor, China. At last count, Beijing owned almost $1.2 trillion of U.S. Treasury debt.
As Secretary of State Hillary Clinton met senior Chinese official Dai Bingguo in Shenzhen on Monday, the mood was friendly. But behind the scenes, anxiety in China is rising as the minutes tick closer toward that Aug. 2 deadline..
"I'm confident that Congress will do the right thing and secure a deal on the debt ceiling, and work with President Obama to take the steps necessary to improve our long-term fiscal outlook," Clinton said.
State Department officials now admit that China has been using diplomatic channels to express its concern. It has sent several official demarches urging Washington to abide by its financial commitments.
Publicly, Chinese officials are still holding out hope that a default won't happen, arguing that it would betray the U.S. national interest. Huang Weiping, an economist from Renmin University, echoes what many believe to be true.
"We believe maybe the last-minute deal will be reached," Huang says. In any case, there's little that China can do.
http://www.npr.org/2011/07/28/138754315/china-fears-u-s-debt-default-but-has-few-options
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