China Wants Answers on Deficit Spending

The Chinese government

owns more than $800 billion of U.S. government debt – and Chinese officials asked some tough questions Monday about whether their American counterparts are being responsible borrowers.

Chinese officials attending the U.S.-China Strategic and Economic Dialogue this week in Washington pressed their American counterparts about the state of the U.S. economy and the American ability to afford its level of deficit spending.

The Chinese, who brought 150 senior officials to the talks in Washington, focused on the weakness of the U.S. economy and the Obama administration’s plans to handle it, said senior administration officials briefing reporters on the first day of talks.

“There were serious questions about what the economic outlook is,” said David Loevinger, the Treasury Department’s point man for the talks. The Chinese, he said, wanted to know “what our plan is for withdrawing some of the fiscal stimulus … when we will bring down our fiscal deficit to manageable levels.”

At the same time, Loevinger said, the U.S. has serious questions for the Chinese as well about how sustainable their own fiscal stimulus policies are. - Politico Story