WASHINGTON/SINGAPORE (Reuters) – While the immediate crisis over a threatened default seems to have been averted by the eleventh-hour deal between the White House and Congress, the debt-limit drama has left behind crucial questions about the American political process, the viability of economic policy options and implications for the rest of the world.

The long, tortured debate exposed toxic partisanship and legislative dysfunction in Washington just when judicious efforts at reform were most needed, shaking the faith of international investors and ordinary Americans alike.

WASHINGTON/SINGAPORE, Aug 2 (Reuters) – While the immediate
crisis over a threatened default seems to have been averted by
the eleventh-hour deal between the White House and Congress,
the debt-limit drama has left behind crucial questions about
the American political process, the viability of economic
policy options and implications for the rest of the world.

The long, tortured debate exposed toxic partisanship and
legislative dysfunction in Washington just when judicious
efforts at reform were most needed, shaking the faith of
international investors and ordinary Americans alike.

SINGAPORE (Reuters) – Averting a U.S. debt default solves only the immediate fiscal problem for the West and its big creditors in Asia.

The U.S. sovereign debt path remains unsustainable. Investors are growing reluctant to lend cheap money to a handful of European countries. Either of those could erupt into another bout of market-bruising uncertainty.

SINGAPORE (Reuters) – Averting a U.S. debt default solves only the immediate fiscal problem for the West and its big creditors in Asia.

The U.S. sovereign debt path remains unsustainable. Investors are growing reluctant to lend cheap money to a handful of European countries. Either of those could erupt into another bout of market-bruising uncertainty.

SINGAPORE (Reuters) – Asia’s small, export-driven economies look most vulnerable to the threat of a deeper U.S. economic slump, which could materialize even if Washington manages to avert a debt default.

China’s exports to the United States easily dwarf those of its regional neighbors, but as a percentage of its vast economy the exposure is much smaller than it is for Taiwan, Malaysia, Singapore or Hong Kong.

SINGAPORE, July 25 (Reuters) – Bewildered Asian officials
could only watch and hope for the best on Monday after U.S.
lawmakers failed to break a debt impasse that threatens to
trigger a default and up-end global financial markets.

Asia, which owns nearly one-third of the publicly held U.S.
government debt, has a powerful vested interest in Washington
solving its debt troubles.

BEIJING (Reuters) – China’s factory sector shrank for the first time in a year in July, a survey showed on Thursday, feeding worries among the country’s main trading partners that its growth is unsustainable and could lead to a slump.

The HSBC flash purchasing managers’ index (PMI) fell to 48.9 in July, suggesting the manufacturing sector contracted at its fastest pace since March 2009, as monetary policy tightening and slack global demand weighed on the sector.

BEIJING (Reuters) – China’s factory sector shrank for the first time in a year in July, a survey showed on Thursday, feeding worries among the country’s main trading partners that its growth is unsustainable and could lead to a slump.

The HSBC flash purchasing managers’ index (PMI) fell to 48.9 in July, suggesting the manufacturing sector contracted at its fastest pace since March 2009, as monetary policy tightening and slack global demand weighed on the sector.

SINGAPORE (Reuters) – For Asia, the deepening debt troubles in the West are like a giant asteroid on a collision course — too big to dodge or ignore, and difficult to pinpoint precisely where the worst damage will be done.

With roughly $3 trillion of reserves held in the form of U.S. Treasury debt — more than $2 trillion in China and Japan alone — Asia would be directly exposed to a U.S. debt downgrade or default. The sheer size leaves Asia with nowhere to hide.

SINGAPORE (Reuters) – For Asia, the deepening debt troubles in the West are like a giant asteroid on a collision course — too big to dodge or ignore, and difficult to pinpoint precisely where the worst damage will be done.

With roughly $3 trillion (1.86 trillion pounds) of reserves held in the form of U.S. Treasury debt — more than $2 trillion in China and Japan alone — Asia would be directly exposed to a U.S. debt downgrade or default. The sheer size leaves Asia with nowhere to hide.