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China calls on U.S. to take measures to avoid default

China, the biggest foreign owner of U.S. debt, on Monday urged Washington to take measures to pass a debt-ceiling increase, as the U.S. is moving closer to the possibility of the first-ever default on its debt.

U.S. Treasury Secretary Jack Lew warned Sunday that the government will default unless America's US$16.7 trillion debt limit is raised by Oct. 17. The partial U.S. government shutdown forced President Barack Obama to cancel his four-nation tour to Asia and miss APEC as well as the East Asia Summit.

"The U.S. has a large number of direct investments from China, and China has a vast number of U.S. treasury bonds," China's Vice Finance Minister Zhu Guangyao told reporters. "Such an inseparable bond means that either side will have a huge impact on the other." 

Regarding the issuer of the world's main reserve currency, Zhu said, "It is important for the U.S. to maintain the credit worthiness of its treasury bonds."

"We hope that, before Oct. 17th, the U.S. will take credible steps to address its dispute over the debt ceiling in a timely fashion, avoid a default and ensure the safety of Chinese investment in the U.S.," Zhu said.

The no-show of Obama at APEC and the East Asia Summit is "something that all other parties don't want to see," Zhu said. (Yonhap News)
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