Taking the Pulse on US Debt in Shanghai

By Rebecca Kanthor

As people head to work in Shanghai, China’s financial hub, the US economy isn’t far from their mind. China is the biggest foreign owner of US debt, so America’s financial troubles matter here.

“I think the US has a big effect on China,” said Zhang Wei, who works in the insurance industry. He’s worried about America’s rising debt and the downgrading of its credit rating. He added that the latest swings in China’s stock market are a reaction to what’s happening in the US.

A woman walking out of a nearby building echoes his concern. She didn’t want to give her name.

“Of course we’re worried, because we’ve bought up so much American debt,” the woman said. “The government’s money was earned by Chinese people’s blood and sweat. We worked hard and with low pay for it, so we’re worried.”

The woman works for an American auto company, and she has positive feelings in general about the US, though not about the way it’s managing its economy.

“I’m a little unhappy,” she said. “This makes me a little less confident in the strength of the dollar. We used to be so confident about U.S. currency and debt. This just makes me feel a bit let down.”

Outside Shanghai’s Stock Exchange Building, a briefcase-carrying man named Mr. Gu said America’s troubles are affecting everyone.

“Even though we’re so far from the US, America’s economy has a great impact on regular people in China, especially in the rising prices of goods here,” Mr. Gu said. “China’s bought so much of the US debt, if the value of the dollar drops, our investments could be affected. No one will be happy about that.”

So what do people here think China should do about America’s growing debt? Zhang Wei, the insurance broker, suggests a meeting. He said the leaders of our two countries should sit down together and talk about this. He added that in the past, China’s always lost out.

But one person I talked to had a suggestion for how Chinese people could help the US economy grow again.

Zhang Xu Dong said I guess the only thing we can do as individuals is travel to the US and be consumers.