Vice minister urges US to solve debt problem thoroughly

Chinese Vice Finance Minister Zhu Guangyao said on Friday that the United States should listen to voices from leaders of the World Bank and the International Monetary Fund (IMF) and solve its government debt problem thoroughly to avoid negative global impacts.

The U.S. debt problem "has become a global concern and we hope the United States can listen to the global voices and strong policy suggestions from the two institutions of the Bretton Woods System," Zhu told Chinese reporters on the sidelines of the ongoing annual meetings of the IMF and the World Bank Group (WBG).

The United States must "solve its debt problem thoroughly and avoid dampening the global economy," Zhu stressed, adding that a potential U.S. debt default will likely impact U.S. economy in a big way, and will become a "major drag on the global economy."

He said that the discussion among finance ministers and central bank governors from the Group of 20 (G20) during their two-day meetings on the sidelines of the annual meetings "focused on advanced economies, U.S. debt default risk in particular," Zhu said.

As the partial U.S. government shutdown is in its 11th day, Washington faces another fiscal deadline. U.S. Treasury Secretary Jacob Lew has told Congress that the federal government will reach its debt ceiling of 16.7 trillion U.S. dollars by Oct. 17, and failure to raise it would lead to a catastrophic default.

The Washington-based IMF on Tuesday cut its growth forecast for the world economy to 2.9 percent this year, 0.3 percentage point lower than its July projection. It also revised down its forecast for the world economic growth in 2014 to 3.6 percent, 0.2 percentage point lower than its July estimate.

The Chinese minister said the IMF's global economy forecast for this year is "lower than the 3-percent psychological threshold which shows that the world economy is confronted with big uncertainties."