Chinese media send verbal missiles over U.S. debt crisis

Editor's Note: The following piece comes from Global Post. 

Chinese media have lambasted the United States for bringing the global economy to the edge of chaos by failing to top up the Treasury's borrowing limit and avoid a catastrophic default.

State-run Xinhua news agency said other countries would suffer because of the wrangling between Democrats and Republicans over a deficit reduction plan with just days to go before the Treasury runs out of funds.

"The ugliest part of the saga is that the well-being of many other countries is also in the impact zone when the donkey and the elephant fight," the commentary published on Xinhua said, according to the Financial Times.

It said the United States was addicted to debt and advised Washington to "revisit the time-tested common sense that one should live within one’s means."

China is the biggest buyer of U.S. debt with holdings at $1.16 trillion in May, and a default would have massive repercussions for the Asian powerhouse.

Beijing has not officially commented on the U.S. imbroglio, but Xinhua's reports are often taken as the official government stance.

The U.S. government's $14.3 trillion borrowing limit is set to run out on Tuesday, meaning the world's biggest economy would be unable to service its debts.

Read: Who owns America?

A vote on a deficit-reduction plan designed by Republican leaders to avoid default was scrapped late Thursday when hard line fiscal conservatives within the party refused to give their consent.

Share markets across Asia were weaker on Friday and there are fears of a sell-off on Wall Street unless the impasse can be broken quickly.

"Headline risk is acute as ever. U.S. debt discussions are going down to the wire, and risk appetite was knocked a little lower," said Sue Trinh of RBC Capital Markets, according to the Wall Street Journal.

But the Financial Times said Western governments had "officially expressed confidence" that the United States would avoid what President Barack Obama has called the "Armageddon" scenario of default.

"We remain confident US authorities will take the necessary decisions to meet its payment obligations," a spokesman for the European Commission said.