The U.S. vice president, Joe Biden, arrived in China Wednesday, Aug. 17 on a long journey of five days which Beijing expects “concrete actions” on the huge debt of the United States.
During his visit he will meet with his counterpart, Xi Jinping, likely successor of President Hu Jintao and personality unknown to American political circles. Washington hopes to build a relationship of dialogue with Mr.Xi. The issue of U.S. debt, however, promises to capture a part of the discussions in China. “China, as the largest foreign creditor of the United States and as the largest foreign holder of dollars, is obviously more concerned than others about the policy of the United States,” wrote the People’s Daily the official organ of the Chinese Communist Party, in a comment.
Joe Biden’s visit is in response to criticism made by Beijing on August 2 agreement torn between the White House and Congress on raising the debt ceiling. the U.S. vice-president wants to convince Beijing of the fiscal credibility of the United States.
China has denounced the “debt addiction” of the United States and urged Washington to stop living beyond its means. Beijing, which held 1170 billion dollars of U.S. Treasury bonds by June, “now has all rights to require the United States addressing their structural problem of debt,” said the Xinhua news agency.
Despite the rants of some official media who had called the United States to “live within their means” and the thrust carried by the rating agency Dagong Chinese, who, too, downgraded the U.S. sovereign rating, the central government seems to keep its confidence in the economy of the United States. Between April and June, China has not slowed the pace of its purchases of Treasury bills.
In an interview published Wednesday by Chinese business magazine Caijing, Joe Biden has sought reassurance on the strength of the U.S. Treasury. The U.S. No. 2 has denied that the United States were “declining.”
During his visit Biden will mention that the yuan is “greatly undervalued” and press the leaders of the second world economy to encourage middle class to consume rather than to focus on massive exports of cheap manufactures.
In addition to Biden’s meeting with his counterpart Xi Jinping, President Hu Jintao and Premier Wen Jiabao. The White House has said that Biden would not hesitate to “express concern” about the situation of human rights in China.
After Beijing, he will travel to Chengdu with Xi Jinping, and on Monday in Mongolia for a brief one-day visit, and finally to Japan where he will visit the city of Sendai, struck by the earthquake of March 11.