China has lent a staggering amount of money to the U.S. government, said Beijing’s Huanqiu in an editorial. China now holds about $770 billion of U.S. debt, and we continue to buy U.S. bonds—“despite the fact that the continuous weakening of the U.S. dollar is decreasing the value of debt holders’ wealth.” The weak dollar hurts China in another way, too, since China is not only the largest holder of U.S. debt but also the largest holder of U.S. currency reserves. But there may not be any other option. Many analysts believe that the other major global markets, Europe and Japan, “are quite possibly worse off than America.” In short, U.S. debt may be the least worst option. “It is like trying to pick a not-so-rotten apple out of a pile of rotten apples,” says Dr. Hu of China’s Academy of Social Sciences Financial Research Institute.
But will the U.S. ever be able to repay? asked Liu Meng Xiong in Hong Kong’s Oriental Daily. The American government is merely reflecting the bad spending habits of the American people, and that is cause for concern. Americans are used to borrowing money to buy anything they want—not just houses and cars but also furniture, computers, and luxuries like plasma TVs. “They don’t even stop to consider whether or not they have enough income to cover their expenses when they whip out their credit cards.” Such unconstrained consumption coupled with greedy policies by U.S. banks produced the “financial tsunami” that has brought “the entire U.S. financial system to a near collapse.”
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