China will this month complete an audit of local-government debt to assess risks to its financial system, ahead of a Communist Party meeting in November to set economic policy, a government official said.
Excuse the Chinese government for not caring who in the U.S. is responsible for the debt-ceiling impasse. Democrats and Republicans have their reasons for doing what they do, but from Beijing or Shanghai’s perspective, the potential results are the same: a default on about $1.28 trillion of Chinese-owned debt and a global recession to boot. The U.S. promised to make good on the debt when it bought it, and that promise seems dangerously close to being broken. For China, that’s a huge economic risk -- and a tremendous public- relations opportunity.
Leaders of the world’s biggest economies grappled with fallout from potential stimulus exit as the BRICS countries said they will create a $100 billion pool of currency reserves to guard against financial shocks.
China and Japan, which together hold more than $2.4 trillion in U.S. Treasuries, raised pressure on the U.S. to resolve a political impasse on its debt ceiling that threatens to destabilize global financial markets.