Biden tells China: US is world’s best bet

American vice-president Joe Biden has rejected views that American power is waning and said Washington would never default on its debt, wrapping up a China visit that has played down tensions between the world’s two biggest economies.

“We are still the single best bet in the world, in terms of where to invest,” Mr Biden told a university audience in Chengdu, the provincial capital of Sichuan province.

“Please understand that no-one cares more about this than we do, since Americans own 87 per cent of all our financial assets and 69 per cent of all our Treasury bonds,” he said, answering a question about US debt.

“Our interest is not just to protect Chinese investment. We have an overarching interest in protecting the investment, while the United States has never defaulted and never will default. You’re safe.”

The key theme of Mr Biden’s visit five-day visit to China has been economic: that the US can reverse its high debt and low growth, and China should play a part by buying more American-made goods and services.

Mr Biden added: “I also know that some of you are sceptical about America’s future prospects. With that in view, I would like to suggest that I respectfully disagree with that view and will allay your concerns.”

He told the audience to remember that the US was by far the largest economy in the world – it is about two-and-a-half times as large as China’s.

Mr Biden and president Barack Obama face re-election next year. Mr Biden said the debate with Republicans over how to tackle US fiscal problems would be at the heart of the 2012 presidential election.

Chinese vice-president Xi Jinping, who is virtually certain to succeed Hu Jintao as Chinese president in early 2013, has hosted Mr Biden during this visit.

Obama administration officials have said they want to build trust with Mr Xi ahead of the transition that begins in late 2012, when Mr Hu gives up his post as general secretary of the ruling Communist Party.

Next year would need careful political footwork from both governments, said Mr Biden.

“Both our countries are going through a political transition in 2012. It is very important, in my view, that we both are aware of the political sensitivities in each of the countries as they go through that,” he said.

Sichuan province is a fast-growing example of the inland development that Beijing hopes will power the Chinese economy in coming decades – and a slice of the rising consumer power that Washington hopes will buy more US goods and reduce a huge trade deficit with China.

With 80 million people, Sichuan enjoyed economic growth of 15.1 per cent last year, according to government statistics.

Such economic concerns have dominated Mr Biden’s visit to China, which began on Wednesday, and has featured a succession of unusually vocal declarations of Beijing’s confidence in the US economy, despite the recent downgrade by Standard & Poor’s of the sovereign credit rating of the US.

China has quarrelled with the US on trade, internet censorship, human rights and US arms sales to Taiwan. While those thorny disputes have not disappeared, they appear to have been overtaken by a shared desire to show confidence and co-operation to a jittery global economy.

In Sichuan, Mr Biden only raised the issue of human rights in general terms. “Liberty unlocks a people’s full potential, and in its absence, unrest festers,” he told the university audience.

Analysts estimate two-thirds of China’s $3.2 trillion in foreign exchange reserves, the world’s largest, are in dollar holdings, making it the biggest US foreign creditor.