China lecturing US on need to cure debt addiction
China’s leaders, even in their wildest nationalist dreams, could not have imagined a more spectacular reversal of history than that the US should be chastened and no longer top of the (capitalist) class, appealing to China to bail it out and boost world growth.
They can no longer resist the temptation to lecture the US, via the official news agency Xinhua, on the need to “cure its addiction to debt” (6 August 2011), and to assert that Beijing “has every right now to demand that the United States address its structural … problem”.
He who pays the piper calls the tune. And China, which already holds $1,170bn in US treasury bonds (almost as much as the annual produced wealth of Russia), is proving most generous. It is paying the West back in its own coin, using its financial power as a political weapon.
China is not alone in this. The whole Asian region vividly remembers the 1997 crisis and the measures imposed by the International Monetary Fund; Singapore’s former ambassador to the UN says: “Every piece of advice that the Asians received [in 1997-98] has been ignored” in the West.
But while China likes to talk about addiction, it is just as hooked on debt: US debt that enables it to invest its surplus funds without undue risk and to go on exporting at a profit.