Standard and Poor's, or S&P, decided to downgrade the U.S. credit rating for the first time following a week of investor anxiety over Europe's debt and last-minute U.S. recovery that caused some volatile trading on Friday.

China holds a large amount of U.S. debt. Xinhua, the official press agency of China, issued a commentary on Aug. 6 titled After historic downgrade, U.S. must address its chronic debt problems.

The commentary stated that the days when debt-ridden Uncle Sam could leisurely squander unlimited overseas borrowing seemed to be numbered because S&P slashed the country's AAA credit rating for the first time.

"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," according to the commentary. "To cure its addiction to debts, the United States has to reestablish the common sense principle that one should live within its means."

Bloomberg reported that Mohamed A. El- Erian of Pacific Investment Management Co., said that S&P's cutting of the U.S. credit rating may make it harder for other top-rated countries to keep their AAA ranking.

The downgrade by S&P "may well raise questions about other members of the dwindling AAA club," El-Erian, 52, the Newport Beach, California-based chief executive officer and co-chief investment officer at Pimco, the world's largest manager of bond funds, wrote in an e-mail Bloomberg on Aug. 6.

"Investors should be cautiously positioned as the global economy and markets face major uncertainties," El-Erian continued. "The downgrade will be a further headwind to growth and job creation in the U.S."

Some $1.87 trillion has been erased from the value of U.S. equities since July 22 to include the 4.8 percent plunge by the S&P 500 on Aug. 4, Bloomberg reported. It was the biggest drop since February 2009.

Additionally, U.S. stocks fell the most in 32 months this week, erasing the S&P 500's 2011 advance, as investors fled equities because of signs that the economy is stalling. Treasuries rose this week, pushing the two-year note yield to a record low, Bloomberg reported.

"The once-unthinkable loss of the AAA rating will constitute a further hit to already fragile business and consumer confidence," El-Erian wrote to Bloomberg.

China has said the U.S. government has to face the fact that the days when it could borrow to get out of its own mess are gone.

"It should also stop its old 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," the commentary said. "A little self-discipline would not be too uncomfortable for the United States, the world's largest economy and issuer of international reserve currency, to bear."

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