Chinese premier welcomes US pledge on debt crisis

Aug 19, 2011, 11:09 GMT

Beijing - Chinese Premier Wen Jiabao on Friday welcomed a pledge by US Vice President Joe Biden to tackle the US debt crisis and safeguard China's huge stake in US Treasury assets.

Wen said China had 'full confidence' that the United States could overcome its fiscal difficulties and thanked Biden for his strong message about the importance of Sino-US ties to the global economy.

'It's particularly important that you've sent a very clear message to the Chinese public that the United States will keep its word and its obligations with regard to its government debt,' he said at the start of talks with Biden in Beijing.

The commitment to preserve the 'safety, liquidity and value of US Treasuries ... will give a boost to investors' confidence in the US economy,' Wen said.

Biden told Wen he had 'absolute confidence' in the US economy.

'US Treasuries, we're going to take care of very closely, not merely because China owns 8 per cent of them but because the Americans own 85 per cent of them,' he said.

'We appreciate your investment in US Treasuries,' Biden said. 'And very sincerely, I want to make clear that you have nothing to worry about.'

Chinese state media quoted Biden as telling President Hu Jintao later Friday that US President Barack Obama wanted to 'reaffirm our absolute commitment to developing a strong, enduring and positive relationship with China.'

In the run-up to Biden's visit, which began Wednesday, China, the biggest US creditor with 1.17 trillion dollars in Treasury assets, 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,' the official Xinhua news agency said in a commentary.

In a speech at a business forum earlier Friday, Biden urged China to lift trade barriers that were limiting US exports.

Speaking at the same forum, Chinese Vice President Xi Jinping said it was important for the two nations to cooperate 'in the face of a complex and severe situation of the world economy.'

Xi, who is set to succeed Hu as Communist Party leader next year and head of state in early 2013, planned to accompany Biden on a two-day visit from Saturday to the south-western city of Chengdu.

Biden was scheduled to speak on US-China relations at a Chengdu university and visit an area hit by the 2008 Sichuan earthquake.

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

Read more about US