China, wary of the troubled US economy, has already “canceled America’s credit card” by cutting down purchases of debt, a US congressman said Thursday.
China has the world’s largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.
But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.
Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had “very legitimate” concerns about its investments.
“It would appear, quietly and with deference and politeness, that China has canceled America’s credit card,” Kirk told the Committee of 100, a Chinese-American group.
For an economy addicted to credit like ours, that’s a serious problem. And it’s one that the Obama Administration doesn’t have a good comeback for.
Why? Because, in spite of the fact that we have an Imitation European as President, we still have a very American mentality towards our situation. For a long list of reasons, some of long standing and some more recent, we can only operate effectively under ideal conditions, where everything’s going our way. But China’s withdrawal of ongoing credit is something that we can’t make them reverse, no matter how big of a fit we throw.
As Mark Kirk (R, IL) observes, “I’m not sure too many people on Capitol Hill realize that this is now happening.” They just can’t handle the truth.