China, with much to lose, largely silent on debt talks

 

SHANGHAI — As the largest foreign holder of U.S. dollar debt, China has much to lose in the event of an American default. But with the default deadline just over a week away and negotiations in Washington seemingly at an impasse, the Beijing government and the state-run media — which normally do not pass up a chance to criticize U.S. policy — have been largely silent.

One likely reason, analysts said, is the extreme sensitivity among Chinese officials to the accusation that the government here has too many dollar holdings, putting China in what critics call “a dollar trap.”