S&P rating downgrade: China piles on

@CNNMoney August 7, 2011: 10:47 AM ET

NEW YORK (CNNMoney) -- China owns more than $1 trillion in U.S. Treasuries and so wasted no time weighing in after the United States lost its AAA credit rating.

A commentary published Saturday by the official Xinhua news agency demanded that Washington get its fiscal act together and -- once again -- questioned the primacy of the dollar.

"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 commentary said.

S&P's downgrade served "as another warning shot about the long-term sustainability of the U.S. government finances," it added.

On Friday, S&P downgraded the United States to AA+, an investment grade level just one notch below AAA.

It marked the first time the world's largest economy has been downgraded, since Moody's first gave the country a credit rating in 1917. (Read: Your money in a AA-rated United States)

S&P rating downgrade: FAQ

In the Xinhua commentary on Saturday, China again questioned whether the U.S. dollar should be displaced as the world's main reserve currency -- meaning it's held in vast amounts by banks around the world and used in international transactions.

"International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," the commentary said. (Video: S&P: Why we downgraded the U.S.)

Washington must stop its practice of "letting its domestic electoral politics take the global economy hostage and rely on the deep pockets of major surplus countries to make up for its perennial deficits," it continued.

On Wednesday, a governor of the People's Bank of China also urged the United States to engage in "responsible policy measures" for the good of the world economy.

--A CNN Wire report was used in compiling this article. To top of page

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