US debt may face another downgrade
A potential ratings cut in US debt by the Chinese agency Danong would most likely not affect Chinese investors’ outlook on the US or have an impact on the US doing business with China, according to Joseph Gagnon, senior fellow at the Peterson Institute for International Economics.
“We’d be better off if China wouldn’t buy our bonds; we’d rather them buy our exports,” he said. “China earns dollars when they sell exports to the US, and they have to spend those dollars somehow.”
Gagnon was responding to a Reuters story that quoted the chairman of Dagong Global Credit Rating Co, Guan Jianzhong, as saying that “the trend of rating cuts does exist if the US debt level continues to rise and its economic fundamentals don’t improve.”
The Long March-3B carrier rocket carrying China’s Chang’e-3 lunar probe blasted off from the launch pad at Xichang Satellite Launch Center, Southwest China’s Sichuan province on Dec 2.