Reflecting broad opinion in China, a senior Chinese official warned that “the clock is ticking” for the United States to avoid a default that could injure the financial interests of the Asian country and the world economy. Vice Finance Minister Zhu Guangyao said that China, as the largest creditor of the U.S., is "naturally concerned about developments in the US fiscal cliff." Zhu asked that “the U.S. earnestly take steps to resolve” a deal to raise its borrowing limit by October 17.
Recognizing the risk that the U.S. may become unable to pay its debt obligations, Treasury Secretary Jacob Lew said recently that unless Congress agrees to an increase in the debt ceiling, the government will be left with about $30 billion in cash to meet its obligations, which is about half of the $60 billion needed each day.
Zhu acknowledged that China and the US are "inseparable," since Beijing is such a big investor in Treasury bonds. "The executive branch of the US government has to take decisive and credible steps to avoid a default on its Treasury bonds," he said. "It is important for the US economy as well as the global economy." He added, "We hope the United States fully understands the lessons of history.” Zhu was referring to a similar deadlock in 2011 that led to a downgrade of the US "AAA" credit rating.
On October 6, Republican House Speaker John Boehner reiterated that his caucus would not agree to raise the debt ceiling unless it included measures to decrease public spending. While Boehner has gotten much of the blame for his tactic of allowing the shutdown to go forward, President Barack Obama said he would not negotiate with House Republicans "under the threat of economic catastrophe." The chief executive He said that he and the Democrats in Congress had already agreed to fund the government at levels favored by Republicans but lower than preferred by the Democrats. Obama called for a vote in Congress, to “see what happens.”
"If Republicans and Speaker Boehner are saying there are not enough votes, then they should prove it," Obama said, adding he had a "strong suspicion" there would be enough House Republicans to join House Democrats to pass the bill. "Let the bill go to the floor and let's see what happens. Just vote."
The budget impasse in Washington has had an impact on Obama’s foreign policy manoeuvres. Obama has had to cancel his plan visits to Indonesia, Brunei, Malaysia and the Philippines due to the partial shutdown. He was not able to represent the U.S. at the Asia Pacific Economic Co-operation (Apec) meeting in Indonesia, sending Secretary of State John Kerry in his stead. China has taken notice of Obama’s absence. For example, Chinese media outlet Ta Kung Pao wrote "Chinese President Xi Jinping has become the brightest political star on the stage. In contrast, America has lost an important chance to perform."
"Although the US has expressed multiple times that Obama's absence will not affect its 'Return to Asia' strategy, its Asian allies worry that political instability in the United States can bring about a diplomatic swing, placing themselves in an awkward position," the paper adds.
The Wen Wei Po newspaper says "bipartisan games in the US have let the world see the worst of US democracy... and has forced Mr. Obama to cancel his Asia-Pacific summit."
"It is clear to other Asia-Pacific countries that America's return (to Asia) strategy has become powerless," added Wen Wei Po.
"A man cannot be too selfish; a country the same way. If the United States damages the economic and social progress of developing countries for its own country's economic growth, then such quick success can only be harmful to itself," declared The Global Times. It added that "American politics itself often encourages selfishness and immediate success, and the probability that she might go astray along the road of world trade 'reform' is worrying."
Chinese media are also raising doubts over the future of a potential Trans-Pacific Partnership (TPP) trade agreement. The free trade deal is currently being negotiated between Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, United States, Singapore and Vietnam. The deal excludes China. "TPP negotiations without Obama were like an orchestra without a conductor, and the meeting had to end hastily, with half of the 21 negotiating projects failing to reach an agreement," Ta Kung Pao says. The Global Times also criticized Obama, saying "the process of launching the agreement (TPP) ... has created one of Asia's largest trading uncertainties."