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Adviser: China should not worry about US debt impasse

By REUTERS

JULY 25, 2011 08:26

BEIJING - China should not worry about stalled US talks over the debt limit, an academic adviser to the People's Bank of China said on Monday, predicting that politicians will ultimately reach a deal to avert a crisis.

Xia Bin, a member of the central bank's monetary policy committee, played down near-term risks to China's economy since Washington has little choice but to continue pursuing loose monetary policy in a bid to spur the world's biggest economy.

"Don't worry too much about it. The United States will have to issue more debt and issue more currency," Xia told Reuters in an interview.

Xia said the debt talks have gained too much media attention as US politicians try to maneuver on the debt issue to score strategic points before the next presidential election in November 2012.

"They won't betray the national interest. They are now playing with politics," Xia said.

"They will definitely reach a compromise," he said.

As a central bank adviser, Xia is an influential economist but is not directly involved in policy making.

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