The Chinese response came from their embassy in Lusaka, Zambia, in response to Treasury Secretary Janet Yellen's remarks about China's handling of debt issues in developing countries.
US-China Relations Soften
The Chinese embassy stated, "The biggest contribution the US can make to the debt issues outside the country is to act on responsible monetary policies and cope with its debt problem." These remarks come despite the recent softening tensions between the US and China. In November, the two nations' presidents met for the first time in years, and Yellen and her counterpart Liu He held successful and healthy discussions.
China's Role in Developing Countries' Debt Issues
As the largest creditor to developing nations, China has faced criticism for its lack of participation in global initiatives to reduce the debt loads of these countries. Yellen has repeatedly stated that Beijing has become the largest roadblock to progress on these issues.
US Avoids Shutdown with "Extraordinary Measures
On January 19, the US reached its statutory debt ceiling of $31.4 trillion. To avoid a government shutdown, Treasury Secretary Yellen announced plans to take "extraordinary measures" to aid the government for at least five months. This will give Congress more time to resolve their differences and increase the debt ceiling. Experts predict that the limit will need to be lifted in the third quarter to prevent a US payments default and its potential negative impact on the global economy.
