China says debt financing unlikely ‘to save’ US, EU



China says debt financing unlikely ‘to save’ US, EU

August 5, 2011

China said Friday that debt deals in the United States and in Europe would not be enough to save their economies and “concrete steps” must be taken to rebalance the global economy.

“The only way the Americans have come up with to improve economic growth has been to take on new loans to repay the old ones,” a blistering commentary published on the official Xinhua news agency said.

“To eat May’s grain in April, however, will never be a permanent solution to a problem,” the report said.

China warned on Wednesday that Washington’s efforts to raise the US limit on borrowing had failed to defuse America’s “debt bomb” and signalled that Beijing would further diversify its holdings away from the dollar.

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