US won’t default: Biden

Chinese Vice President Xi Jinping plays host to Vice President Joe Biden on Friday in Beijing. Photo: CNN

US Vice President Joe Biden wrapped up his visit to China today after seeking to reassure Beijing about Washington’s ability to manage its debt crisis, but media and analysts remained unimpressed and demanded concrete action from the White House.

“The US has never defaulted, and never will,” Biden said during an hour-long speech on Sunday at Sichuan University in Chengdu.

China is the largest foreign holder of US Treasury bonds, although the majority remains in the hands of the US public, the vice-president commented, “We cannot afford not to make good on (our debt).”

“I believe the US is even better equipped to compete in the economy of the future than it was in the past,” he said, adding that the country remains the best bet among global investment destinations.

A recurring theme of Biden’s visit was rebuilding confidence among the Chinese leadership in the US economy. When meeting with Premier Wen Jiabao on Friday, Biden told Wen that “you have nothing to worry about” concerning China’s investment in US Treasury bonds.

However, He Maochun, director of the Research Center of Economy and Diplomacy at Tsinghua University, warned that China’s doubts would remain until the White House takes concrete steps to fix the debt crisis. 

“Messages coming from US politicians can be so inconsistent sometimes that we have to be cautious. At present, politicians in Washington have a lot of things to do to deliver on Biden’s promise,” He said.

During the speech, Biden blamed some Republicans for preventing an even stronger debt-ceiling accord, saying that the issue would be settled during the 2012 presidential election campaign.

A commentary by the Xinhua News Agency said that Biden’s pledges were far from soothing Chinese concerns, and that rhetoric alone would not restore lost confidence. 

“To meet its promises, the US must end its excessive reliance on overseas borrowing, make substantial reforms and cuts to its bloated entitlement programs, reduce budget deficits and restructure its economy,” Xinhua said.

According to Bloomberg, China’s Treasury holdings of $1.17 trillion, while down from their October high of $1.18 trillion, have increased for the past three months.

J. Stapleton Roy, director of the Kissinger Institute on China and the US ambassador to China from 1991 to 1995, told Reuters, “If we move to restrict trade (with China), this would be the counterpart to the Smoot-Hawley tariff in the Great Depression which had an enormous negative impact.”

“Trade protectionism as a way of dealing with our trade imbalance with China would be a step in the wrong direction,” Roy said.

Biden was later escorted by his Chinese counterpart, Xi Jinping, to a high school in Dujiangyan, a city devastated by the 2008 Sichuan earthquake.

“We have no reason to fear one another,” Biden said when responding to a student’s question, referring to often-strained Sino-US ties, Bloomberg reported.

Jin Canrong, a vice director of the School of International Studies at Renmin University of China, who joined four other Chinese scholars in a meeting with Biden on Saturday, said the US second-in-command was satisfied with his China tour.

“(Biden) asked about possible changes to China’s diplomatic strategy,” Jin said. “He expressed interests on how Internet-based communications were impacting Chinese politics.”

“He has also achieved his goal in building up his relations with Xi,” Jin told the Global Times, describing Biden as “an eloquent old man.”

“Biden’s trip can be summarized as information gathering, relationship mending and confidence building. As the candidate for vice president in the 2012 elections, maintaining stable Sino-US ties in the next five and a half years was in Biden’s mind during the visit,” Wang Jisi, the dean at the School of International Studies of Peking University, told the Global Times.

Meanwhile, a lingering impact of his tour will be the unprecedented interest among the Chinese public as they followed the diplomatic tour on Weibo and other social networking sites.

By press time, thousands had posted comments on the US Embassy’s Weibo page about Biden’s speech in Chengdu.

“I will save a copy of this speech,” one Web user wrote on Biden’s promise. “In case someone fails to deliver some day.”

Biden left China today for Mongolia and Japan.

Liu Linlin and agencies contributed to this story

Source: Global Times

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