By Lesley Wroughton and James Pomfret
BANDAR SERI BEGAWAN, Brunei Oct 10 Secretary of
State John Kerry assured Asian nations that the United States
was committed to resolving a fiscal impasse as some leaders,
including Chinese Premier Li Keqiang, expressed anxiety over the
lingering U.S. government shutdown and a possible debt default.
In a meeting on the sidelines of an Asian summit in Brunei,
Kerry made clear to Li that the U.S. government shutdown, now in
its ninth day, and friction over the U.S. budget "is a moment in
Washington politics and reaffirmed the President's commitment to
resolving the issue," a senior State Department official said.
The official said the debt issue was "briefly referenced"
during the meeting.
China is the biggest holder of U.S. debt and some Chinese
officials have raised concerns over a drawn-out crisis in
Washington. According to data from the U.S. Treasury, Beijing
holds $1.28 trillion of Treasury debt. It also has additional
U.S. agency debt.
The U.S. Congress has so far failed to strike a deal to
raise the U.S. government's $16.7 trillion borrowing limit,
which is set to expire on Oct. 17, roiling markets and pushing
the dollar close to its recent eight-month low against other
The budget crisis in Washington already forced President
Barack Obama to cancel his planned trip to the Asia-Pacific
Economic Cooperation summit in Bali, and the East Asia Summit
now underway in Brunei.
Philippine President Benigno Aquino said the country's
central bank had begun to take unspecified steps to cushion the
potential impact of a default.
"It's like if the world's biggest economy turns belly-up,
how can you actually protect yourself? But I don't think that
will happen," he told reporters.
Several diplomats expressed concern about the potential
impact on the region's economies and markets if the crisis drags
on, particularly if there is no agreement to raise the U.S. debt
limit, which could trigger a debt default after Oct. 17.
"The world is worried about it and everyone is bracing for
its impact," said a senior indian official, who declined to be
"There is anxiety ... The longer it goes on, the more risks
are magnified in the international financial system."
A chink of light emerged on Wednesday when a Republican
leadership aide said U.S. House of Representatives Republicans
are considering signing on to a short-term increase in the
government's borrowing authority to buy time for negotiations on
broader policy measures.
How long of an increase might suffice - a few weeks or a few
months - was unclear. But agreement by Republicans and Democrats
to raise the debt ceiling would at least stave off a possible
default after Oct. 17, when Treasury Secretary Jack Lew has
determined the government will no longer be able to borrow.
The 10-member Association of Southeast Asian Nations
(ASEAN)did not discuss the U.S. fiscal issue in formal talks on
Wednesday, but diplomats said the issue had come up in informal
discussions. Several ASEAN economies, including regional giant
Indonesia and Malaysia, have seen sharp falls in their
currencies in recent months on concerns over an end to the U.S.
Federal Reserve's super-easy monetary policy.
"While we want to sound outwardly that we're not concerned
about the U.S., we have to take into account all possible impact
to our economy ... The U.S. has to get its act together," said a
senior Malaysian diplomat.
"Our central bank is monitoring what's happening in the
U.S., we are in touch with them."