Top US spy warns that China would seek to exploit a debt default

US Director of National Intelligence Avril Haines has warned that China and Russia would probably seek to exploit a failure by Washington to raise the debt ceiling, while the Biden administration says Beijing would “love” to see the chaos of a US default.

It is “almost a certainty” that both countries would use such an event for propaganda purposes through “information operations”, using it as evidence that the US political system is dysfunctional, Haines told the Senate Armed Services Committee on Thursday.

Haines said the intelligence community did not have information to provide an independent assessment, but she said that a default would created “global uncertainty” about the value of the dollar, US leadership and American institutions.

Haines’s comments come as President Joe Biden’s administration faces an acrimonious political battle over increasing the US debt limit.

The administration has insisted that there will be no debt-limit negotiations with House Speaker Kevin McCarthy and fellow Republicans who are demanding that an increase in the borrowing ceiling be tied to cuts in spending.

Haines also testified that the continuing war in Ukraine has increased Chinese President Xi Jinping’s leverage over Russian President Vladimir Putin.