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August 08, 2011 at 09:01 AM
In a scathing Saturday editorial excoriating the U.S. for being addicted to debt and living beyond its means, China’s state-run news agency highlighted a different but related issue: China’s U.S. debt holdings that amount to some $1.16 trillion. If U.S. Treasuries are worth less in the wake of the country’s downgrade, then China has a problem of its own.
The Washington Post reported that China’s editorial roundly scolded the U.S. for “squander[ing] unlimited overseas borrowing,” and said those days were at an end. Beijing had said nothing in the days leading up to the budget agreement when downgrades were threatened. Now that it has become a reality, and the potential threat to its own investments has become more immediate, the country’s leaders have become openly critical of the U.S.
China’s own ratings agency, Dagong Global Credit Rating Co., had already cut the U.S. rating for the second time three days before. Its first cut was administered in November, although little attention was paid to it at the time.
