US Downgraded, China starts to gloat

Following the downgrading of US debt from AAA by S&P, China has started gloating and even giving free advice to the US to curb its addiction to debt.
In the piece linked above on Xinhua above the Chinese seem to be viewing this as an opportunity to demand some changes of the US. The spirit of the advice is not wrong - the US does need to control its spending and certainly the debt is at an unsustainable level. However for China to be doling out advice is a bit rich.

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.

I find the bit above amusing - if China does not like the way US debt is going surely they can just sell it rather than whinge about it publicly? As a bond holder they should be aware that there is an inherent risk of holding any financial asset. Also they are the single largest foreign creditor to the US, but they are nowhere near being the largest creditor to the US - US Pension funds, the Fed and other organizations hold by far the largest amount of US Treasuries (on an aside it will be very interesting to see how pension funds react as they may have to sell due to loss in rating).

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

Absolutely agreed with the above sentiment. However lets also add that it is common sense to let your currency be valued realistically and not let it remain artificially weak and as a result imbalance world trade and build up reserves by "beggaring your neighbour".

China needs to seriously look at their own house before they start commenting on others. While there is some sense to what is being said, the tone of the comments seem a bit odd.