U.S. 'playing with fire' on debt-default

美国若考虑债务违约相当于玩火

Republican lawmakers are "playing with fire" and could damage the dollar's value by considering a brief default on the U.S. debt as a means to pressure President Obama on the budget, Li Daokui, an advisor to China's central bank, told reporters on Wednesday at a forum in Beijing.

China should do its utmost to persuade the U.S. from resorting to any debt default and urge the U.S. to ensure the security of Chinese investments in its treasury debt, Li said.

But even if the U.S. delays raising its debt ceiling, China and Japan might still maintain their U.S. treasuries holdings, Li added.

China is currently the largest investor of US treasury debts, with total holdings of about US$1.15 trillion.

Technically, U.S. debt obligations have already exceeded the debt limit, which currently stands at US$14.3 trillion. But the U.S. Treasury Department can use accounting maneuvers to continue making payments until August 2.

After that, Congress will have to raise the ceiling, or the government will have to cut expenses and delay payments, leading to a temporary default.