China hits out at US debt 'addiction'
China hit out at the United States on Saturday after its unprecedented ratings downgrade, with state media saying that the world's largest economy needed to cure its "addiction" to debt.
Other Asian nations, such as Japan and South Korea, reacted cautiously and along with Australia warned against over-reaction after Standard & Poor's cut the US rating from the top notch triple-A to AA+ on Friday.
But Beijing, the largest foreign holder of US Treasuries, said in a stinging English-language commentary carried by the official Xinhua news agency that it had "every right" to demand Washington address its structural debt problems and safeguard Chinese dollar assets.
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," Xinhua 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," the commentary added.
Officials in Japan, which has the second-largest US debt holdings, gave a more measured response, saying their trust in US Treasuries remained unchanged.
S&P said politicians in Washington were becoming less able to get to grips with the country's huge fiscal deficit and debt load.
The ratings agency 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.