Updated on
Summary Chinese state media hit out at US on Saturday after its unprecedented ratings downgrade.
The Chinese media said the world’s largest economy needed to cure its “addiction” to debt.The official Xinhua news agency said China, the largest foreign holder of US Treasuries, now had “every right” to demand Washington address its structural debt problems and safeguard Chinese dollar assets.It is the first time the US has suffered a downgrade and Xinhua said Washington needed 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,” the English-language commentary said.“To cure its addiction to debts, the United States has to re-establish the common sense principle that one should live within its means.”Officials in Japan, which has the second-largest US debt holdings, gave a more measured response, saying their trust in US Treasuries remained unchanged, while Australia and South Korea warned against over-reaction.Standard & Poor’s cut the US rating from the top notch triple-A to AA on Friday, saying its politicians were becoming less able to get to grips with the country’s huge fiscal deficit and debt load.S&P gave a negative outlook for the US, saying there was a chance its rating could be cut again within two years if progress is not made cutting the government budget gap.
