Alarm at Barack Obama attack on China - Business - Evening Standard
       

Alarm at Barack Obama attack on China

President Barack Obama has accused Beijing of manipulating its currency, raising fears he could try to make China the scapegoat for America's own financial crisis, putting at risk a vital source of funding for his country's deep problems.

Timothy Geithner, Obama's choice as Treasury Secretary, said the President believes China is "manipulating" its currency, the yuan, and should "adopt a more aggressive stimulus package".

Geithner's words alarmed investors in Treasury bonds - a vital source of funding for Obama's ambitious spending plans. Many fear the tough talk could lead to a fall in demand for Treasuries from China.

China has already announced a four trillion yuan (£425.31 billion) spending plan to invest in infrastructure and try to get its economy going again.

Its leaders are facing severe pressure amid an unexpectedly fast slowdown in their country's growth and a collapse in exports.

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