China commentaries demand US responsibility on "fiscal cliff"

BEIJING (REUTERS) - China's official Xinhua news agency demanded on Tuesday that the United States live up to its global economic responsibilities, put political infighting aside and sort out the "fiscal cliff" mess.

"Being the world's only superpower and the issuer of the dominant global reserve currency, the United States has a unique role and an unshirkable duty to help cure the ailing global economy," one of its English-language commentaries said.

"In today's economically interconnected and interdependent world, it is more of a benefit than of a burden that Washington honours its global responsibility," the state-run agency added.

"Should Washington fail to pull itself from the escarpment, the repercussions would throw the whole world into a cold winter of stagnant growth and laggard recovery."

A second commentary said the fiscal cliff debacle was a clear example of how poorly the US political system worked.

"These days, both Democrats and Republicans seem more intent on inflicting damage on their political adversaries than working out a better future for their country," it said.

"Americans may be proud of their mature democracy, but the political gridlock in Washington really looks ugly from an outsider's view."

While such commentaries are not policy statements as such, they can be read as a reflection of government thinking.

The United States was on track to tumble over the fiscal cliff at midnight on Monday, at least for a day, as lawmakers held back from supporting an eleventh-hour plan from Senate leaders to avert severe tax increases and spending cuts.

China sits on the world's biggest pile of foreign exchange reserves worth US$3.3 trillion (S$4 trillion) and as much as 70 per cent of the holdings are still invested in US dollar assets, including US Treasuries, according to analysts.

China is on course to end 2012 with the slowest full year of growth since 1999 and while the 7.7 per cent rate forecast in a benchmark Reuters poll is way above the world's other major economies, it is far below the roughly 10 per cent annual growth seen for most of the last 30 years.