By BETTINA WASSENER and MATTHEW SALTMARSH
HONG KONG — China, one of the United States’s biggest creditors, urged American policy makers on Thursday to act to protect investors’ interests, highlighting rising concerns around the globe about the protracted budget talks taking place in Washington.
Officials in Washington are locked in tense negotiations over the government debt limit, which the Obama administration says must be raised from its current level of $14.29 trillion to allow the government to pay its daily bills and service any debt coming due.
Any failure to pay due debt would effectively amount to a default, which, however briefly, could shake confidence in the American economy and unsettle global financial markets.
Late Wednesday, Moody’s Investors Service sharpened attention on such an outcome by warning that it might cut its top rating for the United States. Moody’s cited a “rising possibility” that no deal would be reached before the United States government’s borrowing authority hits its limit on Aug. 2.
On Thursday, Ben S. Bernanke, the chairman of the Federal Reserve, repeated a warning that a “huge financial calamity” would occur if President Obama and the Republicans could not agree on a budget deal that allowed the debt ceiling to be raised.
The authorities in Beijing added their voice of concern Thursday, though in more muted terms.
“We hope that the U.S. government adopts responsible policies and measures to guarantee the interests of investors,” Hong Lei, a foreign ministry spokesman, said in response to questions about the Moody’s report.
The comments echoed those made by officials in Beijing in April, when Standard & Poor’s lowered its outlook on the United States from stable to negative because of the country’s high budget deficit and rising government indebtedness.
China holds more than $1 trillion in United States Treasury securities, making it highly sensitive to any developments that could lower the value of those holdings.
Robin Marshall, director of investment management at Smith & Williamson in London, said the rating agencies were acting aggressively toward indebted sovereign nations, having failed to foresee the subprime mortgage crisis in the United States, which foreshadowed the current debt explosion.
The current situation, he said, is creating headaches for governments — worried either about where to invest or whether they themselves will be downgraded and face higher financing costs — as well as for investors.
”It raises the question of what is the relevant benchmark?” Mr. Marshall said. “If the U.S. is downgraded, what about Germany, with its increasing liabilities? If you are looking solely at debt-to-G.D.P. levels, you may just be left with countries like Norway, Switzerland and Singapore as triple-A’s.”
In Europe, reaction was muted on Thursday to the threat to the ratings as the European authorities struggled to contain their own debt crisis, which this week threatened to spread from Greece, Ireland and Portugal and engulf the larger economies of Italy and Spain.
European officials have responded to successive downgrades of euro zone ratings — Ireland, for example, was downgraded to junk status this week by Moody’s — by criticizing the grip that the ratings agencies have over investors.
And longstanding plans to create a European rating agency have re-emerged. José Manuel Barroso, the president of the European Commission, said recently that the agencies might be showing “bias” against Europe.
Some Europeans sense double standards among the ratings agencies. A participant in the Internet forum of Der Spiegel, the German newsmagazine, said Thursday, “It surprises me that the U.S.A. still has a top rating to begin with.”
But behind the rhetoric, European governments have united behind the idea that their debt positions are unsustainable and need to be rectified through spending cuts and revenue-raising measures. That leaves no room for the kind of brinkmanship being displayed in Washington regarding debt ceilings and defaults, even though European officials still remain reluctant to admit what investors have been saying for months, that Greece will default.
Mr. Marshall said the balance of opinion still suggested that the agencies should step back from downgrading the United States. “In the end, size and reserve currency status matters,” he said, adding the agencies were likely to “pull back from the brink.”
In China, Dagong Global Credit Rating, a rating agency that downgraded its assessment of the United States last November, said Thursday that it had placed that rating on a negative watch list, citing the declining solvency of the American government, slow economic growth and high budget deficits.
Dagong is little known outside China, and its views have nowhere near the same effect as those of Moody’s or Standard & Poor’s on financial markets.
The warning by Moody’s that a downgrade was possible was enough to send investors rushing to buy assets seen as safe. Gold for August delivery rose as high as $1,594.90 on Thursday, a record before adjusting for inflation.
Bettina Wassener reported from Hong Kong and Matthew Saltmarsh from Paris.