(CNN) - International reaction to agency Standard and Poor's decision to downgrade the U.S. credit rating for the first time has been mixed.
The move followed a week in which anxieties over Europe's debt crisis and the faltering U.S. recovery had spooked investors and made for volatile trading Friday, despite the release of stronger than expected U.S. jobs figures for July.
Asia took a lead Saturday in expressing its concern over the potential impact of S&P's action on the global economy.
In China - which holds large amounts of U.S. debt - a commentary published by the official Xinhua news agency was critical of the U.S. government and questioned whether the U.S. dollar should continue to be the global reserve currency.
"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.
"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."
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 said.
South Korea's government said it would concentrate on limiting the spread of market uncertainty in the wake of the downgrade, semiofficial news agency Yonhap reported.
"The news is bad and Seoul plans to keep very close tabs on how the market reacts," Yoon Jong-won, head of the finance ministry's economic policy bureau, was quoted as saying.
Vice Finance Minister Yim Jong-yong will meet Sunday with senior policymakers from the Bank of Korea and other financial bodies to discuss what actions should be taken by Seoul, Yonhap reported.
Still, Australian Prime Minister Julia Gillard urged calm over the U.S. downgrade, pointing out that only one of the three major ratings agencies had made that decision.
S&P had been signaling they wanted to see a certain reduction in the U.S. deficit for some time, she said Saturday, but "the other two major ratings agencies, Moody's and Fitch, continue to have the American economy rated at AAA. So I think people just need to look at all of the facts."
Gillard also pointed to the strength of the Australian economy, saying: "We are not immune to global events, but I think we should have confidence ... that our economic credentials are amongst the best in the world."
Global economic anxieties led to volatile trading in Pakistan Friday, CNN affiliate Geo TV reported, as traders there and abroad sought to unload their holdings.
In North America, Canadian Finance Minister Jim Flaherty said that his country "is not an island" and is interconnected with the United States and other trading partners, but said that Canada is "well-positioned to face global headwinds."
He said that despite the uncertainty, it was an encouraging sign that the Canadian and U.S. economies are generating positive job growth.
Reaction was slow to come out of Europe Saturday, where questions have been raised about how many European leaders - including the U.K.'s David Cameron, Germany's Angela Merkel and France's Nicolas Sarkozy - are presently on vacation.
Sarkozy interrupted his holiday Friday to speak with Merkel and Spanish counterpart Jose Luis Rodriguez Zapatero, amid concerns that the euro zone's debt crisis might spread beyond smaller economies like those of Greece, Portugal and Ireland.
Finance Minister Francois Baroin, in an interview Saturday for French television network i-tele, said France had "full confidence" in the strength of the U.S. economy.
"The figures that were published yesterday on the (U.S.) unemployment showed a positive shift, better than expected, so it's going in the right direction," he said.
"We also have faith in the fundamentals of this economy, which is one of the most powerful in the world and the U.S. government's determination to implement a plan which was approved by Congress this week."
Germany's Merkel spoke on Friday with President Barack Obama, Cameron and Italian Prime Minister Silvio Berlusconi, as well as Sarkozy, about the economic situation, a German government spokesman said.
Speaking Saturday to the BBC, U.K. Business Secretary Vince Cable pushed back against the suggestion that Cameron and his ministers were out of touch at a time of crisis, saying Britain was only on the periphery of the current issues.
Asked about China's call for a new global reserve currency, Cable said it would be "a sensible way for the world to move" but that it would not happen quickly.
"In the short run, the U.S. dollar is the key international currency and although, frankly, the American legislature has made a terrible mess of things a few weeks ago, they have now got back on track; they have undertaken to manage their debt in a prudent way," he said.
Asked by CNN about the U.S. downgrade, the U.K. Treasury instead pointed to the fact Britain's AAA credit rating had been reaffirmed after the British government took steps to deal with the country's debts.
"This is yet another illustration of why abandoning our deficit reduction plan would put Britain back in the international firing line," a spokesman said.
In July, S&P placed the United States' rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.
To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.
John Chambers, head of sovereign ratings for S&P, said the slowness at raising the debt ceiling and the political infighting led to its decision. In announcing the downgrade, S&P cited "political risks, rising debt burden; outlook negative."
CNN's Bharati Naik, Laura Smith-Spark and Saskya Vandoorne contributed to this report.
China, which is the most prominent, foreign creditor of U.S.debts questioned the supremacy of the U.S. dollar as the global reserve currency. Which currency do they want? It would hurt them more, if the dollar's role diminishes.
The last couple of weeks the financial world has had a high magnitude earthquake with many afterschocks. In Europe voices are loud that Germany should take the lead as stabiliser in the region. Yet on the international stage, nation states still demand the U.S. to provide for the international common good – peace and stability, including China. Maybe buying U.S. treasuries is China's way of supporting the Americans to do the police job.
The problem today is that all these economies are too interlinked with one another. 100 years ago that was not the the case. Has anyone here ever heard of the Belle Epoch(1880-1914) in Europe? Almost all of the European economies were booming then and let that tell us something!
This is absurd. Fareed. Where is India's reaction. India is the leader of the BRIC countries and the only super power that matters in this world. After this economic crisis, India's position will be vastly enhanced, and we will be able to dictate our interests to anyone who does not still listen to us. We will first declare the Indian ocean to be an Indian lake. Jai Hind!
Instead of asking the world "Which currency do they want?", US should ask "What are we going to do now?"
These days I am ashame to be an American; what about you?
Reality is about to hit the US that we are no longer the primary economic power in the world. Our currency may no longer be propped up by the childish mechanitions of the Fed in printing worthless money ; absurdly low interest rates and having the Fed buy US T-bills.Face it the Chinese and even the Russians probably have more natural resources, gold and foreign currency to back thier reserves than we do. So by deficit spending on unnecessary military hardware bases and wars and bleeding out true reseves dry who actually won the cold war against those bad socialists and communists???? All we have is a list of loyal creditors who will take out IOUS and limit our national security in exchange for their oil, cheap labor and materialistic junk. At the end of the day our capitalist economy of unlimited spending to satisfy our immediate needs will make us victims of our creditors everywhere with very little left to actually protect ourselves financially and militarily.
Perhaps China should acquire some intense rehabilitation from its cat/dog mealtime "addiciton"? See article from CNN March 2010 if you can stomach to read it. This country blasting the US for its financial problems/debt downgrade? Well for the most part WE have at least been able to feed our people without resorting to extreme animal cruelty and totally disgusting practices. If they have so much wealth over there, why don't they use some of it to feed their people?
China-much of your culture offends me.
Kwok head, talking about disgusting culture, you have been able to feed yourself because you've been munching on your chum's hot dog that was residing between his legs. Furthermore, your spiting on your chum's hot dog is extremely disgusting.
I think your comments about the Chinese eating habits have nothing to do with financial and economic issues being discussed in this forum. Just as you may be disgusted by the eating habits of the Chinese and the Chinese culture did you at anytime stop and think that the average American diet of beef and pork may be offensive to other cultures of the world? There are many things practiced in America that may be equally as distasteful to other nations/culture and your comments may have had some merit but it is obvious that your ethnocentric view of things makes it impossible to offer a well thought out reply to the comments about the down grading of our credit rating. I don't agree with all that was said by the Chinese in response to American's fiscal policy but I also find it puzzling for anyone to damn an entire culture based on it's eating habits. And by the way our American diet is not that great.
Lord Jesus is blessing India and China because millions of Indians and Chinese repent and accept HIM as their God.
The only solution to turn our country around is to practice what we have been preaching to the world for last 200 years: be a truth CHRISTIAN. The answer is in the BIBLE.
Then why don't you move there so you too can be so "blessed". I'll tell you why you don't. You are used to having it easy HERE. Once again a "true believer" sounds off with no true voice.
You may wonder why God is blessing countries like China, India, and Indonesia that persecute Christians and burn down Christian churches? (I will give answer if ask)(Think before ask)
Just for your information, our families have been serving the 3rd world for generations and our youngsters are following the footsteps. We also see the future mission fields would require less travel since it is popping everywhere in our own back yard.
You are quite right that the Chinese had/have many ugly cultures, but at least they know and they are changing. Yet, here at home we are killing millions of unborn babies legally and heartlessly. Do we know we are committing hideous acts in the eye of God while we pointing fingers?
The Global Public Square is where you can make sense of the world every day with insights and explanations from CNN's Fareed Zakaria, leading journalists at CNN, and other international thinkers. Join GPS editor Jason Miks and get informed about global issues, exposed to unique stories, and engaged with diverse and original perspectives.
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Obama as a foreign policy president?
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China's trapped transition
Obama should rethink Syria strategy
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