A number of correspondents checked in with America’s biggest financier, the People’s Republic of China, after President Obama signed the debt ceiling deal passed by the Senate and House of Representatives.
Xinhua reports that China was generally satisfied that a deal went through — but China Central Bank Governor Zhou Xiaochuan also promised that China would diversify further its foreign exchange reserves.
From the Xinhua report:
“China hopes the U.S. administration and Congress
would take responsible policy measures to handle its debt issue in light
with the interests of the whole world including those of the United
States,” Zhou added.
“China would continue to seek diversification in the management of
reserve assets, strengthen risk management, and minimize the negative
impacts of the fluctuations in the international financial market on the
Chinese economy,” Zhou said.
China needing a hedge against the dollar means that the distressed Euro is ultimately safe.
The yen is strong and stable — perhaps too strong given the sluggish Japanese economy; its triple disaster of earthquake, tsunami and nuclear calamity; and a declining population — but the Euro gives China the only other global currency of quality and scale to acquire.
— Steve Clemons is Washington Editor at Large at The Atlantic, where this post first appeared. Clemons can be followed on Twitter at @SCClemons