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Chinese upset with their government

BEIJING, Aug. 9 (UPI) -- Chinese people, worried about a downgrading of the U.S. debt, are attacking their own government's handling of the country's huge foreign exchange reserves.

Using the Internet, the Chinese reacted against the government's fiscal and monetary policies after their stock market fell sharply Monday, due to concerns the U.S. downgrade and the debt crisis in Europe could hit Chinese exports, The New York Times reported.

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One blogger said China, the largest creditor nation to the United States, is always bowing to Washington. Others questioned whether the Chinese government had acted in the country's best interest by investing about half of the $3.2 trillion worth of foreign reserves in U.S. Treasury securities, which no other country has done.

One posting, which disappeared soon after it appeared, called China's strategic decision makers pigs who would rather let others use Chinese people's money than their own people, the report said.

While many of the bloggers did not offer other investment options for the reserves, the report said in reality few alternatives are actually available that would allow China to acquire tens of billions of dollars month after month from its mounting reserves so as to keep its own currency lower to make its exports attractive.

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On the other hand, the Chinese political establishment also does not want to be seen as supportive of U.S. policies, which may explain why the state media continue to attack U.S. debt management even as China's central bank and other government agencies have remained officially silent about the downgrade.

In fact, China's expanding money supply to keep the yuan lower has caused inflation to jump, affecting the public. Inflation in July jumped to a 37-month high of 6.5 percent.

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