Beijing ( CNN ) -- Although the United States narrowly avoided an unprecedented default following congressional approval of a last-minute compromise plan to raise the debt ceiling , China 's leading credit rating agency Wednesday downgraded U.S. sovereign debt after putting it on negative watch last month . The Dagong Global Credit Rating Company , which lowered the United States to A+ last November after the U.S. Federal Reserve decided to continue loosening its monetary policy , announced a further downgrade to A , indicating heightened doubts over Washington 's long-term ability to repay its debts . It said the gloomy assessment -- much lower than the AAA ratings given by the so-called `` big three '' Western agencies Moody 's , Fitch , and Standard and Poor 's -- was inevitable given the level of market concern generated by the stalemate between Democrats and Republicans over the debt ceiling . `` The squabbling between the two political parties on raising the U.S. debt ceiling reflected an irreversible trend on the United States ' declining ability to repay its debts , '' Dagong Chairman Guan Jianzhong told CNN . `` The two parties acted in a very irresponsible way and their actions greatly exposed the negative impact of the U.S. political system on its economic fundamentals , '' he said . Ironically , Dagong 's move could hurt not just the United States but also China , the largest foreign owner of U.S. debt with holdings worth almost $ 1.2 trillion . `` Our downgrade simply reflects reality , '' Guan said . `` Our rating did n't cause China to lose any money -- - it was the inappropriately high ratings for the U.S. by Western agencies that had led China to make risky investments in U.S . debt . '' Observers say China , whose foreign exchange reserves now stand at $ 3.2 trillion , has had little choice but to buy U.S. Treasury bonds . `` There are n't that many other markets that are as deep or as liquid as treasuries , '' said Patrick Chovanec , an economic analyst with Tsinghua University in Beijing . `` When they accumulate reserves , this is the only place they can put them . '' The privately held Dagong , founded in 1994 to rate Chinese companies , attracted worldwide attention last July when it published its first sovereign credit ratings and , citing growing deficits in the developed world , ranked China higher than the United States and Japan . Dagong now rates 67 countries and aims to more than double the number by the end of this year . Its ambition to become an alternative to the `` big three '' suffered a setback , however , when the U.S. Securities and Exchange Commission refused to recognize its rating because of the commission 's inability to supervise the Beijing-based agency . Guan , who worked as a civil servant and a Wall Street accountant before taking the helm at Dagong , is quick to defend his firm 's independence and objectivity . He points to what he calls Western agencies ' `` double standard '' in rating the U.S. and European economies to underscore the global need for a newcomer like Dagong . `` People are used to credit ratings issued by the 'big three , ' but the financial crisis has clearly proved them wrong , '' Guan said . `` They can no longer shoulder the responsibility of rating the world . '' `` That 's the role we are striving to play , '' he added .
Grade of A is much lower than those of `` big three '' Western agencies . Dagong chairman says both Democrats , Republicans were irresponsible . Recommend0