Sunday, August 21, 2011

Biden tells China: US will never default on debt

US Vice President Joe Biden gestures
after speaking to students at Sichuan
University in Chengdu
© AFP Peter Parks

CHENGDU, China (AFP) - US Vice President Joe Biden said Sunday that the world's biggest economy would never default on its debts, during a visit aimed at boosting Chinese confidence in America's beleaguered finances.

In a speech to hundreds of university students in the vast southwestern city of Chengdu, Biden also urged China to "cherish" a free flow of information between the government and public, as the communist state quells dissent anew.

Biden said at Sichuan University that the United States remained the "single best bet" for investment -- despite the historic downgrade this month of the country's top-notch credit rating by Standard & Poor's.

"The United States has never defaulted and never will," he said, on the final day of his first official visit to China as vice president.

China is the largest foreign holder of US debt, and Biden has used the five-day trip to assure its leaders that their massive investment remains safe after Washington narrowly avoided a catastrophic default earlier this month.

Chinese leaders including Premier Wen Jiabao and Vice President Xi Jinping have been conciliatory in their public appearances with Biden.

In sharp contrast, China's state media has accused US leaders of acting recklessly during a political impasse between the White House and Republicans over allowing the country's debt ceiling to rise.

The official Xinhua news agency -- which has published a number of blistering commentaries in recent weeks -- said Sunday "concrete actions are badly needed" by the United States to turn promises "into reality".

"It 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.

China has used the proceeds of its thriving export machine to invest around $1.2 trillion in US Treasury bonds, and the world's second-largest economy has appealed for global financial stability as panic again grips markets.

China's share of the US debt
© AFP/Graphic
On Friday, Wen expressed confidence in the US economy and said Biden had "sent a very clear message to the Chinese public that the United States will keep its word and obligations with regard to its government debt".

"In spite of the difficulties facing the US economy at present, I have full confidence that the United States will overcome these difficulties and get its economy back on the track of healthy growth," Wen told Biden.

Biden's visit has been aimed partly at building ties with his counterpart Xi, who is slated to be anointed as China's top leader next year but remains virtually unknown in US policy circles.

In Chengdu, Biden met Xi again and witnessed reconstruction efforts following the 2008 Sichuan earthquake, which left over 87,000 people dead or missing.

During his speech, Biden told his audience that "China should cherish an exchange between its citizens and students and their government," noting that "greater openness is a source of stability and a sign of strength".

"Prosperity peaks when governments foster both free enterprise and free exchange of ideas," he said. "Liberty unlocks a people's full potential and in its absence, unrest festers."

Biden raised human rights concerns during his meetings with Chinese leaders last week, US officials have said, but they refused to go into details of whether any individual cases were brought up.

Washington last week appealed to Beijing to free prominent rights lawyer Gao Zhisheng, who has not been heard of since last year.

But police have stepped up surveillance on dissidents and warned them against making any high-profile protests or attempting to meet Biden during his visit, activists said.

Chengdu, a huge conurbation of 14 million people, is the capital of Sichuan province, where nearly 200 of the Fortune 500 largest firms in the world have invested.

China and the United States have signed deals worth nearly $1 billion during Biden's trip, according to a US official who requested anonymity.

Following his stopover in Chengdu, Biden will visit Mongolia and close US ally Japan.

© AFP -- Published at Activist Post with license

This article may be re-posted in full with attribution.


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Michael Rivero said...

The US will never default because the Federal Reserve will simply print up all the money needed to make the payments. But that money will be worthless, because ultimately that money must be redeemed in goods and services from the United States, and this nation doesn't make much of anything anybody wants to buy. The only thing those dollars can buy is the nation itself.

Anonymous said...

Stuff like this gets me thinking. You know, about things like roller derby, "professional" wrestling, Jerry Springer, the latest team of Palin/Bachmann, etc.

As phony and obviously crooked and contrived as most of this stuff is, what about the people who watch it on TV, or show up to hear it, and in some cases, even PAY for the privilege?

And these people vote? And reproduce?

But getting back to the article itself, if Joe "I'm a Zionist" Biden says it, then it must be true. Hallelujah.

Anonymous said...

He's a funny guy !

Anonymous said...

Forty years ago, Harry Browne did a comparison of what politicians and bureaucrats said and what they did. He concluded that they always strongly insisted that they weren't going to do something just before they did it.

Anonymous said...

Did they all burst out laughing like the Chinese students did for Geithner? I know I did.

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