In China, VP Biden promises US assets are "safe"

CHENGDU, China - Vice President Joe Biden wrapped up a visit to China on Sunday that offered him extensive face-time with the country's expected future leader, Xi Jinping, and delivered a strong message of U.S. mutual interdependence with the world's second-largest economy.

Biden also made the case for continued U.S. economic vitality despite current budget woes and sought to reassure China's leaders and ordinary citizens about the safety of their assets in the United States following the downgrading of America's credit rating.

"You're safe," Biden told students in a question-and-answer session following a speech at Sichuan University in the southwestern city of Chengdu.

An official Xinhua News Agency commentary on Biden's visit said Sunday that China would be looking for actions, rather than words, from the U.S. government to restore confidence in the American economy by gradually reducing the deficit, cutting debt and promoting economic growth.

"What is especially important is to let the world see that the U.S. government and relevant departments have the determination, ability and political aspiration to take actions to resolve these complicated issues," the commentary said.

Biden and Xi, China's vice president who is expected to begin taking over the top leadership next year, later visited a high school that was rebuilt after the devastating 2008 earthquake, partly with the help of U.S. government and private assistance.

In his remarks to students, Biden emphasized the frequent exchanges between President Barack Obama and Chinese President Hu Jintao along with government officials in the political and economic field. He said there needed to be more contacts between their civilian and military leaders over security issues, especially on cybersecurity and maritime issues where the sides view matters from different perspectives.

"Our generals should be talking to each other as frequently as our diplomats," said Biden, who held formal talks with Xi and President Hu Jintao during his five-day visit.

Military-to-military exchanges have a troubled history, with China suspending them to register its anger at U.S. actions on the political front or toward Taiwan, the U.S. ally Beijing claims as its own territory. Though revived last year, they face a new threat when the U.S. announces on Oct. 1 whether it will provide new F-16 warplanes to the island.

Biden said the U.S. and China both need global stability, including preventing Iran and North Korea from obtaining nuclear weapons. He also reasserted that the U.S. will remain a Pacific nation in the future, saying that the American presence has benefited regional stability and allowed China to focus on economic development.

Biden said he recognized frustrations among many Chinese businesspeople and officials at the time needed to obtain visas to visit the U.S. and said Washington was working on improvements. Addressing complaints over restrictions on high-tech exports to China, he said Washington had struck 1,000 items off the blacklist.

But he said U.S. companies continue to face major investment barriers in China, a frequent complaint in the U.S. business community here. He said U.S. businesses were locked out of entire fields and face "restrictions that no other major economy imposes on us or so broadly."

Rather than fearing Chinese competition, the U.S. relishes the pressure to become more competitive and hopes for continued Chinese prosperity, with the $110 billion in U.S. exports to China last year generating hundreds of thousands of jobs, Biden said.

China's concerns over its $1.2 trillion in U.S. Treasury holdings have featured high in the media and national consciousness, underscored by squabbles over raising the U.S. debt ceiling and downgrading of America's credit rating.

However, Biden noted that the interest rate on Treasurys fell following the downgrade, making them more sought-after than ever.

"If the world thought, my God, they've been downgraded and they're not going to make good on their debt, it would not have been viewed as the safest haven in all the world to invest," he said.

Biden departs Monday morning for Mongolia before heading to Japan, the final stop on his Asian tour.

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