Biden tells China U.S. investments ‘safe’

August 21, 2011

On the final stop of his four-day China trip, Vice President Biden sought to assure a university audience that the United States will come to grips with its debt problem, and he blamed a vocal faction of the Republican Party for the struggle to reach a deal.

“We do have to deal with the deficit. We will deal with it,” Biden told the audience at Sichuan University, in the southwestern city of Chengdu. “And that’s what this 2012 election is going to be about.”

“We made some significant progress, but not the progress we should have made and will make,” Biden said, referring to the last-minute deal between the White House and Congress to raise the U.S. borrowing limit. “But there is a group within the Republican Party that has a very strong voice now that wanted different changes.”

Biden told the audience that despite the economic problems and turmoil in the financial markets, the United States remains “the single best bet in the world in terms of where to invest.”

Asked by a student about the safety of China’s $1.17 trillion in U.S. Treasury securities, Biden replied, “You’re safe.”

“Please understand that no one cares more about this than we do, since Americans own 87 percent of all our financial assets and 69 percent of all our Treasury bonds, while China owns 1 percent of our financial assets and 8 percent of our Treasury bills, respectively,” Biden said.

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

Biden’s mission here was originally for U.S. officials to get to know China’s incoming top leader, Vice President Xi Jinping, who will make a reciprocal visit to Washington this year or in early 2012. But the trip became overshadowed by the continuing economic problems in the United States, including the lengthy debate over raising the debt ceiling, the downgrading of the nation’s credit rating by Standard & Poor’s, wild stock market fluctuations and growing alarm in China over the safety of the country’s holdings of Treasury bonds.

At each step of the tour, Biden offered assurances that the U.S. economy, despite its problems, remained strong. And his message was echoed by Beijing’s top leaders, who also have been facing rising criticism over whether China has amassed too much American debt and left the country exposed to crises in the U.S. economy.

Although the trip primarily focused on economics, Biden made a nod in Sichuan to human rights concerns.

“I recognize that many of you in this auditorium see our advocacy of human rights as, at best, an intrusion and, at worst, an assault on your sovereignty,” Biden said in his speech, as reported by news agencies. “I know that some in China believe that greater freedom could threaten economic progress by undermining social stability.”

“I believe history has shown the opposite to be true,” he added, “that in the long run, greater openness is a source of stability and a sign of strength.”

Most of the activists in the province apparently never got to see Biden or hear his words spoken live. News agencies reported that known dissidents in Sichuan province were detained or warned to stay in their homes during Biden’s two-day visit.

Biden brought his familiar common touch and jovial style to China and seemed to endear himself to average Chinese, first for eating lunch on the first day of his visit in a local, somewhat run-down lunch spot near the Drum Tower, and paying the $12 tab for himself and four others. Photos of Biden at the luncheon spot, and how he left a generous tip, were huge topics on Chinese micro­blogging sites.

And he often broke the ice with his hosts using offhand quips, such as telling one member of the Chinese delegation, “If I had hair like yours, I’d be president.”

To the head of the National People’s Congress, Wu Bangguo, Biden mused about how Wu’s office was smaller than his own. When he was chairman of the Senate Foreign Relations Committee, Biden said, “I had a big office, large staff. Then I became vice president.”

Biden travels to Mongolia next before proceeding to Japan.

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