We’re still the best bet in the world, Biden tells China

US Vice-President Joe Biden on Sunday rejected views that American power is waning and said Washington would never default, wrapping up a China visit that has played down tensions between the world’s two biggest economies.

“We are still the single best bet in the world, in terms of where to invest,” Biden told a university audience in Chengdu, the provincial capital of Sichuan, the south-west province that is the second and last stop of his visit to China.

“Please understand that no one cares more about this than we do, since Americans own 87% of all our financial assets and 69% of all our treasury bonds,” Biden said, answering a question about US debt.

“So our interest is not just to protect Chinese investment. We have an overarching interest in protecting the investment, while the United States has never defaulted and never will default.”

“You’re safe,” he added.

Biden also used his speech to renew US calls for Beijing to do more to rein in North Korea and Iran, whose nuclear ambitions have alarmed the West.

“The fact is, China and the United States face many of the same threats and share many of the same objectives and responsibilities,” he said.

But his key theme was, as it has been throughout his five-day visit to China, economic: that the United States can reverse its high debt and low growth, and that China should play a part by buying more American-made goods and services.

“I also know that some of you are sceptical about America’s future prospects. With that in view, I would like to suggest that I respectfully disagree with that view and will allay your concerns,” said Biden.

He told the audience to remember that the United States was by far the largest economy in the world, about two and a half times as large as China’s.

Biden and President Barack Obama, both Democrats, face re-election next year. Biden said the debate with Republicans over how to tackle US fiscal problems would be at the heart of the 2012 presidential election.

Chinese Vice President Xi Jinping, who is virtually certain to succeed Hu Jintao as Chinese president in early 2013, has hosted Biden during this visit. Obama administration officials have said they want to build trust with Xi ahead of the transition that begins in late 2012, when Hu gives up his post as general secretary of the ruling Communist Party.

Next year would need careful political footwork from both governments, said Biden.

“Both our countries are going through a political transition in 2012. It is very important, in my view, that we both are aware of the political sensitivities in each of the countries as they go through that,” he said.

‘Nothing to worry about’
Sichuan province is a fast-growing example of the inland development that Beijing hopes will power the Chinese economy in coming decades — and also a slice of the rising consumer power that Washington hopes will buy more US goods and reduce a huge trade deficit with China.

With 80-million people, Sichuan enjoyed economic growth of 15.1% last year, according to government statistics.

Such economic concerns have dominated Biden’s visit to China, which began on Wednesday, and has featured a succession of unusually vocal declarations of Beijing’s confidence in the US economy, despite Standard & Poor’s recent downgrade of the sovereign credit rating of the United States.

China has quarreled with the United States on trade, internet censorship, human rights and US arms sales to Taiwan. While those thorny disputes have not disappeared, they appear to have been overtaken by a shared desire to show confidence and cooperation to a jittery global economy.

In Sichuan, Biden raised human rights in general terms.

“Liberty unlocks a people’s full potential, and in its absence, unrest festers,” he told the university audience.

Biden told Premier Wen Jiabao on Friday that China had “nothing to worry about” over the safety of its holdings of Treasury debt, and Wen voiced confidence in the resilience of the US economy, troubled by debt worries and sluggish growth.

Analysts estimate two thirds of China’s $3.2-trillion in foreign exchange reserves, the world’s largest, are in dollar holdings, making it the biggest US foreign creditor.

Biden will fly to Mongolia on Monday morning for a day before heading onto Japan. – Reuters

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