Government officials in China, the largest foreign holder of U.S. debt, have been chastising the U.S. over Standard & Poors downgrade to AA+.

Guan Jianzhong, chairman of Dagong Global Credit Rating, has said the U.S. dollar is gradually [being] discarded by the world, and the process will be irreversible.

But Chinas debt-to-GDP ratio is worse than the United States ratio. It is worse than insolvent Portugal, which is now relying heavily on the European Central Bank for help, and had to go to the International Monetary Fund to get a financial bailout.

The U.S.s new AA+ rating from Standard & Poors is still higher than the one assigned to the Middle Kingdom. S&P has Chinas debt rating stuck at AA-, the fourth highest level, due to its sizable contingent liabilities in its banking system.

Chinas own system is jammed with rotten debt held in off-balance sheet state enterprises. Its countryside is littered with eerie, empty ghost towns. And Moodys Investors Service says last month that Chinas local debt was understated by hundreds of billions of dollars.

Despite that, the People's Daily said S&Ps downgrade of the U.S.'s credit rating "sounded the alarm bell for the dollar-denominated global monetary system. China owns an estimated $1.16 trillion in U.S. debt. China prints yuan to hold down its value so as to keep its exports dirt cheap. It then uses that extra printed currency to buy U.S. debt.

Here are estimates to keep handy as this debate rolls along:

*Chinas debt-to-GDP higher than Portugals ratio: China likes to say its debt-to-GDP ratio is 17%. Not so fast. The respected Beijing-based research firm Dragonomics says it is 89% of GDP, worse than Portugals 83% of GDP, and the U.S.s 79% by 2015. Stephen Green, China economist at Standard Chartered Bank, figures Chinas total debt, including contingent liabilities, is 77% of GDP. Chinas balance sheet is notoriously murky.

*China's local government debt understated: It may be 3.5 trillion yuan ($540 billion), bigger than its state auditor has estimated, Moody's said last month.

Moody's said it discovered more potential loans after it found discrepancies in figures given to it by Chinese authorities. China's central bank alone holds an estimated $1.16 trillion in debt, and the government has already increased credit in the system to a reported 200% of GDP.

Mansoor Mohi-uddin, managing director of foreign exchange strategy at UBS, had this to say about why the dollar will continue to keep its reserve status in the world markets:

* US Treasury markets depth and liquidity was why it was the one large financial market to function smoothly during the global financial crisis of 2008. And even throughout the debt ceiling and downgrade crisis, U.S. ten-year yields remain at historic lows, 2.6%.

*Foreign currency markets are either illiquid, unstable or not transparent to accommodate central bank reserve flows. The eurozones problems have kept the euro on dubious footing, with the European Central Bank shouldering the burden of keeping it strong by raising interest rates. Japans massive debts, the largest in the world, have kept the yen on unsound footing. Swiss debt markets are tiny. And the Chinese governments tight, protectionist capital controls hinder inflows to the renminbi.

*U.S. has solid political relations with most of the planets largest foreign reserve-holding countries. That keeps the dollar on sound footing, too. Those countries are Japan, South Korea, Saudi Arabia, Kuwait, Qatar and the United Arab Emirates.

*Strong U.S. defense gives these countries shelter, making it in their interests to protect the dollar, and their own holding, in the global currency markets.

*U.S. has flexible monetary policy: True, this upsets monetary hard-liners who detest the Federal Reserves quantitative easing policies that has blown out its balance sheet to a seventh of the U.S. economy. But the U.S. central bank for now can still set monetary policy independently, unlike central banks overseas. Its increasingly being drawn into political fights however. However, individual eurozone countries cant do much on their own to alter the course of the euro to support their own economies, and they cant set interest rates or pursue separate exchange rate policies to support their economies.

Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.