In China, the state-run media is full of scathing editorials about America's mounting debt.
Commentary published by the Xinhua news agency over the weekend stated the U.S. should live within its means. The agency said the alarm has rung and Washington politicians need to stop playing chicken.
An article in the Communist Party newspaper Global Times reads "The World Should Kick America's Behind".
The downgrade of U.S. credit by ratings agency Standard and Poor’s from AAA to AA+ is feeding fears in some circles that China could damage the American economy, by selling its massive debt holdings.
Beijing (CNN) Once U.S. President Obama announced the bipartisan debt deal Sunday, investors in Asia breathed a sigh of relief. Tokyo led the region's markets higher as the U.S. dollar strengthened against the Japanese yen.
Policymakers such as Japanese Chief Cabinet Secretary Yukio Edano welcomed the news, saying the last minute agreement would "lead to the stabilisation of the markets" because it helped the U.S. avoid default on August 2.
Beijing (CNN) – July 1 was the Communist Party's 90th birthday and China's top leaders celebrated in style. Over 6000 guests and prominent party members gathered at the massive Great Hall of the People for the grandiose affair. The stage was decorated with red flags and a jumbo version of the party's vintage hammer and sickle for President Hu Jintao's speech marking the milestone event.
At least, that's what was on local TV. Unfortunately, we weren't able to attend the ceremony because we, and most other international TV media, had our invitations revoked at the eleventh hour.
Beijing, China (CNN) – If French Finance Minister Christine Lagarde enchanted top Chinese officials the way she charmed reporters in Beijing, she has a good chance at winning China's support for her bid to run the IMF.
At the French ambassador's residence, Lagarde flashed her winning smile and had the entire press corps in laughter with her witty comebacks and easy confidence.
"Thank you for the very straight question," she joked to a Chinese reporter as the room broke out in chuckles.
Lagarde came here for two days to talk to China's top brass - hoping to drum up support to become managing director of the International Monetary Fund after Dominique Strauss-Kahn unceremoniously resigned in the wake of a sex scandal.
Beijing (CNN) - I was out shopping for groceries the other day with a friend of mine who has been living in Beijing for over a decade. We stopped by the fruit section, and I automatically gravitated to the bright red apples that looked delicious sitting on the store shelf.
She immediately stepped in. "I choose the apples that are pock-marked and are slightly bitten up by bugs," she told me while replacing the apples in my basket. "I figure if the fruit is good enough for the insect, it's good enough for me."
In China, she told me, the most perfectly formed, most appetizing piece of fruit is the scariest of them all.
With so many food safety scandals in China, everyone seems to have a philosophy on how best to eat. Avoid seafood. Never eat meat from the local market. Don't eat Chinese branded dairy products including cakes.
Probably the best and most consistent piece of advice I have gotten is to diversify your diet. "Rotate your poisons," a food safety expert advised me. It's enough to make you paranoid about eating anything at all.
Fear over additives, antibiotics, fake foods, and dodgy practices has grabbed hold of consumers here, some of whom are taking matters into the own hands by forming organic food buying clubs.
The government has recently ramped up efforts to tighten regulations and root out food safety violators in a state-backed media campaign.
The latest food safety report? Watermelons so juiced up with growth-enhancing chemicals that the fruit bursts open in the field. The CCTV report noted that few fruit markets are willing to buy the melons because they could erupt in transit - oh, and irritate the digestive system if you eat them.
Shanghai, China (CNN) – At the Shanghai Auto Show, car exec after car exec is talking about big investment plans - finding Chinese partners, setting up factories, possibly building cars here for other parts of the world.
It's hard to imagine Detroit – home to the American auto giants – maintaining its prominent role in the industry. However, there are rumblings in China that perhaps Detroit could be a good launch pad for Chinese companies looking to break into the U.S. market.
Detroit already has great talent - a solid pool of Chinese engineers, I was told. Execs say the technology is top notch and customers close by. Michigan officials have also been welcoming.
Pacific Century Motors is the latest Chinese company to inject money into Detroit. PCM is partly owned by the Beijing city government. For $450 million, PCM bought Nexteer, a storied unit of General Motors that makes steering equipment. Nexteer employs thousands of people in Michigan. (The sale was coordinated by Chinese auto parts maker Tempo. Tempo was also an investor in a $100 million deal to buy a brakes division of former GM parts maker Delphi.)
Beijing, China (CNN) – Hundreds of thousands of Chinese are expected to stream through the Shanghai Auto Show, but walking around the convention center, it feels as though everyone is here at once. Crowds of people are gawking at the new designs and concepts – the eco-friendlier GM Chevy Malibu, the "masculine" VW Beetle, the Geely motorcycle cum mini car "McCar" that can transport your elderly mother in her wheelchair.
This show is running concurrently with the New York Auto Show, but I'm told the difference is the number of people eager to buy their first car. Auto analysts say 3 out of 4 Chinese car customers are first time buyers - and nearly all of them pay in cold, hard cash; No wonder carmakers are racing in to the Chinese market.
Executives here have been playing up the potential growth; however, many have also voiced their concerns about a recent trend. GM, Ford, and PSA Peugeot Citroen have acknowledged the push here by Chinese authorities for indigenous brands.
Philippe Varin, CEO, PSA Peugeot Citroen, said government pressure crept in to the European carmaker's recent discussions to expand in China. He said it's clear that today a critical matter for the Chinese government is to promote local brands. "That is the reason why we have decided to have a local brand," he said at the unveiling of the company's DS5 model.
Doing business in China is getting tougher for international businesses and the big car brands are feeling the pressure. Despite the government's restrictions on foreign carmakers, companies like GM and VW are highly successful here. The reason is that Chinese people like to buy foreign branded cars. This is not the case for many other industries - such as white goods – where Chinese players reign.
Even though international carmakers would earn money off a Chinese brand, there is still some concern that the new demand could curb brand loyalty among Chinese consumers to foreign cars.
Which car brands will come out ahead in China?
Beijing, China (CNN) – The Chinese government has confirmed that one of the nation's best known artists, Ai Weiwei, is in custody and is being investigated for "economic crimes."
"It has nothing to do with human rights or freedom of expression," said Hong Lei, spokesman for the Ministry of Foreign Affairs, at a regular briefing with reporters.
This is the first official acknowledgment that Ai is being held after the fierce critic of the Communist regime was taken by police over the weekend at the Beijing airport on his way to Hong Kong.
People who follow the dissident community say it is not uncommon for political activists to be investigated for economic crimes. They say when officials are having trouble building a case against a target, the authorities opt to accuse them of economic crimes such as tax evasion or corruption to discredit them publicly.
Ai's mother told us the suspicions were ridiculous and says her son doesn't have any financial issues. The family hasn't heard from the artist. His lawyer says he has no details of the charges and argues that even if Ai did have financial issues, they should have been handled in a different way.
He says the authorities are not following proper legal procedures despite the ministry's insistence that the investigation is proceeding according to Chinese law.
Beijing, China (CNN) – China’s central bank surprised the market with its timing of an interest rate hike Tuesday. The 0.25% hike is the fourth since October as the country tries to rein in inflation.
From Wednesday, the one-year deposit rate will stand at 3.25% and the one-year lending rate at 6.31 %.
The announcement came on a Chinese holiday and ahead of inflation data for March, being released next week, leading to suggestions it was a pre-emptive strike to soften the market for the figures.
Qing Wang, economist with Morgan Stanley, said the hike has “a strong signalling effect.” He is picking consumer prices to come in at 5.2% year-on-year for March due to rising prices of food, fuel and housing.
China, like other economies around the globe, is caught between a need to rein in inflation and promote growth. But as the price of oil and other commodities continues to climb, hiking is winning out.
The European Central Bank could be next, with expectations it will raise interest rates by a quarter of a percentage point Thursday. It would be its first hike since 2008.
Dariusz Kowalczyk, of Credit Agricole CIB, expects the Chinese government to continue increasing its interest rates due to the rising prices. "Bank rates need to be higher than inflation," he said. "Otherwise, people will invest in houses and equities, leading to asset bubbles." He warns it could slow China’s growth.
But others believe rates could have peaked as the economy slows and inflation flattens out. Mark Williams, senior China economist with Capital Economics, thinks Chinese policymakers will opt to control credit growth by ordering banks to keep more cash in reserve.
The hike follows Chinese Premier Wen Jiabao’s March announcement to his nation's legislature that combating inflation would be the government's top priority in 2011.
With so many policymakers looking to fight inflation this year, how worried are you about rising prices?
Beijing, China (CNN) - I had thought China's situation was significantly different from the Middle East because the government has been successful in bringing better living standards to the people here. You would think that would make Beijing feel less vulnerable. But perhaps all authoritarian regimes react the same.
My crew and I went out Sunday afternoon to see if there was going to be a public response to anonymous calls on the Internet to stage protests and begin a Tunisia-style "Jasmine Revolution" in China. When we arrived at the shopping district Wangfujing, the designated protest location, hundreds of uniformed and plain clothes police patrolled the area. We waited to see if any protesters would show up. But after half an hour, there was no obvious demonstration.
We started shooting a short report and within minutes the police descended upon us. My cameraman was led away. My producer, Jo Kent, started filming me with a small camera when a plain clothes policeman batted it out of her hand. He and several other officers started shoving us around. Three bulky men grabbed my petite female producer. Three more nabbed me, holding my arms tight. We offered to walk on our own but the officers pushed, at times lifting us off the ground, before dragging us to a bank branch where police were already detaining other journalists.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.