China yesterday accused Western nations of putting the global economic recovery at risk by “ignoring their responsibility”, in an editorial published days after an unprecedented US credit rating downgrade.
The criticism in the People’s Daily, the mouthpiece of China’s Communist Party, was the latest in a series of harshly-worded articles in state media about the US and European debt crises.
“If developed countries including the US and European Union don’t take responsibility, it will impair the stable development of the global economy severely,” the newspaper said.
“Only if Western nations stop ignoring their responsibility and use a sharp blade of determination and courage to cut through the ropes binding their policies and strengthen coordination with developing countries will the global economy have hope of a stable recovery.”
The article appeared under the name Zhong Sheng, which means “voice of China”, and is often tagged to editorials in the People’s Daily.
China, the largest foreign holder of US debt with about $3.2 trillion in reserves at the end of June, has not yet given an official government response to Standard & Poor’s decision to downgrade the United States.
The ratings agency docked the United States from a top-flight AAA to an AA+ rating late Friday, largely because of the failure of bitterly divided US leaders to reach a consensus on containing the country’s spiralling debt.
However, the harsh criticisms in Chinese media are a significant indicator of the government’s feeling about the US crisis.
Earlier yesterday, China’s official Xinhua news agency urged Washington’s Democrats and Republicans to stop blaming each other over the downgrade and find solutions.
“Disappointingly, instead of reflecting on themselves and sitting down to fix problems in a cooperated way, the Democrats and Republicans... are questioning the credibility of the downgrade ruling and blaming each other for the... shame of slipping out the top-credit rating club,” Xinhua said.
“It is time for the policy-makers in Washington to settle down, to show some sense of responsibility and fix their fiscal problems.”
Other critical voices in the Chinese press likened the US crisis to an illegal financial scam.
“The US debt is the biggest Ponzi scheme in history,” writer Chen Sijin, identified as an employee of the Royal Bank of Canada, said in an opinion piece in the China Securities Journal.
“US debt will continue but the US will finally have to say goodbye to the game one day.”
In a separate commentary about the ratings agencies’ role in the current crisis, the People’s Daily said that S&P and fellow agencies Moody’s and Fitch were partly to blame as arbiters of global credit risks.
“In recent years, the three ratings agencies disregarded the US debt problems but made trouble for the EU and China constantly,” the paper’s Washington-based deputy international director Wen Xian said.
“The agencies’ direct credit downgrades for some European countries and a ‘red flag’ warning given to China were harsh compared with this ‘slap on the wrist’,” Mr Wen wrote in the comment piece co-authored with three other colleagues.
Echoing concerns about the global economy following the US downgrade, Chinese shares closed down 3.79 per cent yesterday to hit a one-year low, dealers said.
The Shanghai Composite Index ended down 99.60 points at 2,526.82 on turnover of 117.6 billion yuan ($18.3 billion), its lowest closing level since July 19 last year.