China slams U.S. on debt policy

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BEIJING, Aug. 6 (UPI) -- The Chinese government issued a harsh rebuke to the United States Saturday for its economic policy and debt management.

China is the biggest lender to the United States and published a harsh reprimand via the New China News Agency, chastising Washington for "short-sighted political wrangling" that led to Monday's 11th hour legislation to prevent debt default.

In an unprecedented move Friday, the Standard and Poor's agency downgraded the country's debt rating to AA+ from a triple-A rating, drawing the ire of the Chinese government.

About two-thirds of China's $3.2 trillion in foreign exchange reserves are in U.S. dollars and Beijing is clearly concerned with the political sniping that nearly shut down the U.S. economy, The Los Angeles Times reported.

"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 government said.

"If no substantial cuts were made to the U.S. gigantic military expenditure and bloated social welfare costs, the downgrade would prove to be only a prelude to more devastating credit rating cuts, which will further roil the global financial markets all along the way," the statement said.