US economic woes loom over Biden's China trip
WASHINGTON (AP) — Concerns about the U.S. economy and the country's ability to manage its debt and deficits loom over Vice President Joe Biden's trip this week to China, America's biggest foreign creditor.
But Obama administration officials are downplaying any suggestions that Biden will have to reassure the Chinese about America's creditworthiness. Aides say Biden will tell Chinese leaders that the U.S. is committed to tackling its fiscal challenges, and will emphasize aspects of the recent deal to increase the U.S. debt ceiling that the administration believes are good first steps toward long-term deficit reduction.
"The United States has the capacity, will and commitment to tackle our major fiscal challenges," said Lael Brainard, the Treasury Department's undersecretary for international affairs.
China, the world's second-largest economy, owns $1.2 trillion of U.S. Treasury debt, the largest holding by any country. China has called the debate over raising the U.S. debt ceiling a sign of political crisis in Washington and has said that overspending on foreign military adventures was to blame for much of America's current financial woes.
Despite China's concerns, financial experts say U.S. economic woes — even with the recent downgrade of the U.S. credit rating by Standard and Poor's — will unlikely to be a deterrent to China taking on even more Treasury debt.
U.S. officials previewing Biden's trip emphasized that China has its own economic concerns, including an aging work force and questions about how to transform from an export-driven economy to one boosted by domestic demand.
Biden is also expected to continue the U.S. push for China to allow its currency to rise in value against the dollar, as well as the currencies of its other major trading partners. Brainard said that while China has made some progress on this issue, its currency remains significantly undervalued.
Human rights, Taiwan and Tibet are also expected to be on Biden's agenda in China.
Biden is heading to China at the invitation of China's vice president, Xi Jinping. Biden's national security adviser,Tony Blinken, said the vice president's meetings with his Chinese counterpart are part of an effort by the U.S. to build relationships with the next generation of Chinese leaders.
Biden is due to arrive in Beijing Wednesday. His four-day trip to China will also include a stop in the southwest China city of Chengdu, where he will visit a high school and deliver a speech on U.S.-China relations.
The vice president will also visit Mongolia and Japan.