For the US to have its rating upgraded there would need to be a combination of factors, such as a stabilisation of debt to GDP, and possibly a permanent suspension of the debt ceiling, it says.

Fitch's report cited 'a steady deterioration in standards of governance over the last 20 years' and said 'repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.'

Fitch has placed the country's AAA-ranked credit on 'rating watch negative'.

Fitch also declared Kaisa, a smaller property company but one of China's most indebted, had defaulted on US$400 million of bonds.