Context
The Standard and Poor (S&P) downgraded the long-term US credit rating by a notch to AA-plus, due to concerns over the government’s budget deficit as well as deteriorating debt prospects. This occurred despite the recent bipartisan agreement to increase the country’s debt limit by $2.4tn and reduce the deficit by $2.1tn over a decade. America has held the S&P top-tier rating since 1941.
According to analysts, this could result in a weakening of dollar and pose a threat to the Chinese interests as it holds massive amounts of dollar assets.
