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U.S. tries to reassure China about debt

Vice President Joe Biden speaks Friday with business leaders in Beijing. At right is Chinese Vice President Xi Jinping, who is expected to become leader of the ruling Communist Party next year.

Associated Press

Vice President Joe Biden speaks Friday with business leaders in Beijing. At right is Chinese Vice President Xi Jinping, who is expected to become leader of the ruling Communist Party next year.

BEIJING — Vice President Joe Biden tried to reassure China's leaders Friday that the country's $1.2 trillion in U.S. Treasury debt is safe, while both sides stressed the importance of cooperation to revive world growth.

Biden's visit is aimed at learning more about Chinese Vice President Xi Jinping, who is expected to become leader of the ruling Communist Party next year. But the trip has been overshadowed by U.S. economic uncertainty and Beijing's anxiety about the safety of its U.S. assets.

"The U.S. economy is highly resilient," Xi said as he and Biden held a round-table meeting with business leaders. "We believe that the U.S. economy will achieve even better development as it rises to challenges."

Premier Wen Jiabao, the ruling party's No. 3 leader, echoed that theme in a meeting with Biden later. Wen said he has "full confidence" the United States will "get its economy back on the track of healthy growth."

Chinese leaders have repeated that upbeat theme throughout Biden's visit, trying to project a responsible image and reassure jittery global markets.

Both sides stressed the importance of U.S.-Chinese cooperation to revive world growth, reflecting the array of trade and investment ties that link the world's two biggest economies despite tensions over human rights, Taiwan and other issues.

"It's particularly important that you have sent a clear message to the Chinese public that the U.S. will keep its word with regard to its government debt," Wen said. "It will preserve the safety, liquidity and value of U.S. Treasurys."

Biden reassured Wen about the security of China's U.S. bond holdings and said Washington "appreciates and welcomes" Chinese investment.

In a later meeting with Chinese President Hu Jintao, Biden said President Barack Obama had tasked him with reaffirming America's "absolute and total commitment to stay engaged in the world in the most vigorous way possible."

Friday's meeting with businesspeople was aimed at enhancing cooperation amid complaints by foreign companies about Chinese market barriers and by Beijing about U.S. export restrictions.

The discussion included executives of General Motors, Coca-Cola, Caterpillar, Bank of China, computer maker Lenovo Group and appliance brand Haier Group.

"We need to deepen cooperation," Xi said.

Beijing is Washington's biggest foreign creditor. China has appealed to U.S. leaders to avoid taking steps in response to its economic malaise that might erode the value of the dollar and China's Treasury debt and other U.S. assets.

Ahead of Biden's arrival, state media carried comments by Chinese analysts appealing to Washington to avoid further stimulus moves by the Federal Reserve and to protect foreign investors in the United States.

Before the start of Friday's meeting, the president of Bank of China expressed hope for a stable dollar. He said 57 percent of the bank's $200 billion in foreign holdings is in dollar-based assets.

"We hope the U.S. dollar will remain stable," Li Lihui told reporters. "We are a little bit concerned, but we are confident that the U.S. government can solve its economic problems."

U.S. tries to reassure China about debt 08/19/11 [Last modified: Friday, August 19, 2011 9:01pm]
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