CHINA VICE FINANCE MINISTER : US Fiscal Cliff Big Threat to China Economy

11/15/2012| 10:31pm US/Eastern

    By Aaron Back   

BEIJING--The looming fiscal crisis in the U.S. poses a big threat to the Chinese economy, Vice Finance Minister Zhu Guangyao said Friday.

Speaking at a forum, Mr. Zhu urged U.S. President Barack Obama and Congress to take action to avoid the so-called "fiscal cliff"--a series of spending cuts and tax increases set to take effect after the year's end, which could send the U.S. into recession.

"We hope the U.S. Congress could reach an agreement to solve the fiscal problems, or at least to have an emergency plan before January 20 the next year before the new Obama administration is sworn in," he said.

Mr. Zhu also cited figures from the International Monetary Fund that showed the combination of spending cuts and tax hikes due to take place automatically at the start of next year could reduce economic growth by 4.8 percentage points in the U.S. and by 1.2 percentage points in China.

Write to Aaron Back at aaron.back@dowjones.com

Source: http://www.4-traders.com/news/CHINA-VICE-FINANCE-MINISTER-US-Fiscal-Cliff-Big-Threat-to-China-Economy--15514135/

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