China not impressed by U.S. debt deal

October 18, 2013: 2:27 AM ET
house floor shutdown vote
The Congressional vote to avoid a debt default did not win positive reviews from China.
NEW YORK (CNNMoney)

America's largest overseas creditor wasn't exactly blown away by the deal Congress struck to avoid a potential default.

"[P]oliticians in Washington have done nothing substantial but postponing once again the final bankruptcy of global confidence in the U.S. financial system," government-run Chinese news agency Xinhua Thursday.

Wednesday's vote, the commentary said, "was no more than prolonging the fuse of the U.S. debt bomb one inch longer."

And a Chinese credit rating agency Dagong downgraded the United States, saying the deal did little to change the outlook for the country's financial condition.

It lowered its view of the U.S. debt rating from A to A- and kept it on negative credit outlook, which means further downgrades are possible.

"The government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future," the firm wrote in a note.

The firm's ratings are not widely followed outside of China, which owned $1.3 trillion in Treasuries as of July. That's almost a quarter of debt held overseas.

4 reasons the deal is not so great

The criticism of the U.S. debt and political crisis by China has been building for some time.

A week ago Chinese Vice Finance Minister Zhu Guangyao said that a solution had to be found quickly to "ensure the safety of Chinese investments" and provide stability for economies around the globe.

And another commentary from Xinhua earlier this week said the "pernicious impasse" in Washington warrants a move to a "de-Americanized world."

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