China's central bank governor 'welcomes' US debt deal

Zhou Xiaochuan, governor of the People's Bank of China, China is the biggest creditor to the US and has urged it to protect China's dollar investment holdings

Related Stories

China's central bank governor has welcomed measures taken by the US to avoid a default on government debt obligations.

The comments come after the US took measures to raise the debt ceiling.

Zhou Xiaochuan said the People's Bank of China (PBC) would "closely observe its implementation", in a statement on the PBC website.

Separately, Chinese rating agency Dagong downgraded the US credit rating, according to Xinhua news agency.

Mr Zhou said China, which is the largest holder of US debt, hopes that the US takes responsible policy measures to handle its debt issues, while keeping the interests of the rest of the world in mind.

But he reaffirmed that China would continue to diversify its reserve assets to minimize the negative impact of fluctuations in the international financial markets on the Chinese economy.

Rating downgrade

In a separate move, the little known Chinese ratings agency, Dagong, has lowered the credit rating of the United States from A+ to A, with a negative outlook.

Dagong, said in a statement that the decision to lift the debt ceiling will not change the fact that the US national debt growth has outpaced that of its overall economy and fiscal revenue, which will lead to a decline in its debt-paying ability, according to Xinhua.

Dagong announced last month that it had put the US credit rating on a negative watch for a possible downgrade.

However, the major credit rating agencies, Standard and Poor's, Moody's and Fitch have all so far retained their triple-A rating for the US, albeit with a negative outlook.

In November, Dagong downgraded the US rating from AA to A+ after the Federal Reserve began a stimulus program, known as quantitative easing.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories



  • Lucy FranklinDouble trouble

    'Rising house prices left me high and dry - twice!'

  • NS Savannah, 1962Nuclear dream

    The ship that totally failed to change the world

  • Ed Miliband takes a selfie at a Cambridge hairdressersNo more photo ops?

    Why is Ed Miliband drawing attention to his public image?

  • Espresso cup7 days quiz

    Which city serves the strongest cup of coffee?

  • Glasgow 2014 quaichs and medalsQuaich guide

    What do the Scottish gifts given to Games medallists symbolise?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.