China slams US 'debt addiction'

China's state-run news agency says America's 'debt-addiction' is threatening the world economy and that Washington must slash its defence and social welfare spending.

The commentary published today by China's official Xinhua News Agency is Beijing's first official response to the downgrading of US debt.

The commentary says that if Washington fails to rein in spending, there would be more "devastating" credit rating cuts to come and global financial turbulence.

It demands international supervision over US dollar issues and suggests a new global reserve currency is needed.