US needs closer economic cooperation with China, Biden says

Aug 18, 2011, 10:52 GMT

Beijing - US Vice President Joe Biden on Thursday urged China and the United States to build a 'close and serious relationship' that could ensure global economic stability.

'I'm absolutely confident that the economic stability of the world rests in no small part on the cooperation between the United States and China,' Biden said before two hours of talks with Chinese Vice President Xi Jinping.

'It affects every country from your [China's] neighbour to the north, to Argentina in the southern tip of South America,' Biden said of the China-US relationship.

'It is the key, in my view, to global economic stability,' he said immediately before his talks with Xi at Beijing's Great Hall of the People.

Xi, who is set to succeed President Hu Jintao as Communist Party leader next year and head of state in early 2013, said better cooperation between the world's two largest economies was essential 'in the face of a complicated and fast-changing world.'

'China and the United States are transforming their economic development modes and restructuring their economies, which has provided the two nations with good opportunities for cooperation,' state media quoted him as saying during his talks with Biden.

Xi suggested that Washington and Beijing should 'improve global economic governance' through the Group of 20, the Asia-Pacific Economic Cooperation forum and other frameworks such as the East Asia Summit.

'The key to ensure a healthy and steady development of China-US relations is to respect each other's core interests,' the official Xinhua news agency quoted Xi as saying.

Xi told Biden that Taiwan and Tibet were China's core interests and 'should be handled prudently and properly to avoid damaging China-US relations.'

US President Barack Obama met the Dalai Lama, the exiled Tibetan spiritual leader, last month, drawing a protest from China.

Washington and Beijing also have long-standing differences over US arms sales to Taiwan, the island that the Chinese Communist Party claims as a breakaway province that should be 'reunified' with mainland China, by force if necessary.

Xi also urged China and the US to expand military and political exchanges 'in a spirit of respect, mutual trust, equality and mutual benefit.'

Talks between the vice presidents were expected to focus on global financial problems.

In the run-up to the talks, China, the US' biggest creditor, had sought more reassurance on US measures to tackle its debt crisis.

The recent US package of measures to reduce its fiscal deficit had 'failed to resolve the runaway debt problem of the world's largest economy, leaving a ticking time bomb,' Xinhua said in a commentary Wednesday.

The commentary said Biden was expected to 'assure Chinese leaders of Washington's capacity, will and commitment to tackle its fiscal and economic challenges.'

Biden was also expected to press China to let its currency appreciate during talks with Chinese leaders Thursday and Friday.

US politicians want China to strengthen the currency and remove barriers to imports to help reduce the US trade deficit with China, which hit 273 billion dollars in 2010.

Biden also met Wu Bangguo, the number two official in the Communist Party, on Thursday and was scheduled to meet Hu and Premier Wen Jiabao during his first official visit to China as vice president.

His itinerary included a two-day trip, accompanied by Xi, to the south-western city of Chengdu to speak at a university on US-China relations and to visit an area hit by the 2008 Sichuan earthquake.

After his visit to China, Biden was scheduled to travel to Mongolia and Japan.

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