China angry at U.S. over S&P credit downgrade

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China angry at U.S. over S&P credit downgrade
China infuriated with United States after rating agency Standard & Poor's downgraded U.S credit from AAA to AA+ for failing to sufficiently deal with its $14.29 trillion debt problem.

Of the current 14.29 trillion U.S. debt, 8.1 trillion is publicly held and 6.2 trillion is held by the US government. Of the publicly held debt, China is the largest buyer and holder of US Treasury bonds with 1.3 trillion dollars.

Japan ranks second after China and holds 912.4 billion dollars in US debt followed by U.K. with 346.5 billion debt.

The recent downgrade is bad news especially for China, which is the largest holder of U.S. debt. and it would be constrained from dumping its Treasury notes because it would diminish the value of its dollar accounts.

Right after Standard & Poor's decision to strip the U.S. of its prized triple-A rating late Friday, Jiang Xufeng with China"s official Xinhua news agency wrote a harsh opinion on Saturday basically scolding U.S. Lawmakers. It also warned Washington lawmakers to “cure its addiction to debts" and “live within its means."

Xufeng writes "the U.S. government has relied on borrowing to fund its operations in recent decades and has seldom carried out a serious fiscal austerity plan."

“That's why its debt ceiling has been raised 78 times to 14.29 trillion dollars since 1960."

In another opinion piece on Saturday, Xinhua said, “The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone."

“China, the largest creditor of the world"s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China"s dollar assets."

Japan, the United States" second biggest creditor, did not whip out at Washington like China. Instead, the Japanese government was supportive despite the rating downgrade, saying U.S. Treasury bonds" “attractiveness as an investment will not change because of this action," according to Dow Jones.

Read more about: economy, standard poor, china
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