China may be calling for a new world order, thanks to the US government shutdown, which is stretching into a third week. The US Congress failed to pass a new budget by the October 1 deadline, resulting in the shutdown of many departments and government programs.
Frustrated with the fiscal stalemate going on in Washington, D.C., China called for the US dollar to be replaced as the international reserve currency and suggested broader steps to create a “de-Americanized world.”
The Los Angeles Times notes that China also called on the United States to end its “pernicious impasse” regarding both raising the debt limit and the government shutdown. The country added that the world needs another reserve currency so they can protect themselves “from the spillover of the intensifying domestic political turmoil in the United States.”
China is the largest foreign holder of US debt and owns about $1.3 trillion in Treasury bonds. Because of this, it is concerned about the potential impact of the United States’ failure to raise the debt limit on those holdings.
China isn’t the only country to express its concern over the effects of the US debt limit not being raised in time, notes NBC News. Christine Lagarde, head of the International Monetary Fund, commented that the US default “would mean massive disruption the world over, and we would be at risk of tipping yet again into a recession.”
China’s comments about a new world order came from an op-ed article by Xinhua, the country’s state news agency. In it, the agency wrote:
“Days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.”
The deadline for raising the US debt limit is Thursday. If congress can’t come to an agreement by then, China’s losses could be devastating.
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