China’s Wen backs US economy

President Joe Biden after a historic downgrade of the United States’ top-notch credit rating.
China is the largest foreign holder of US debt, and Biden has used his first official visit to the Asian nation since becoming vice president to reassure the country’s leaders their investment remains safe.
Premier Wen Jiabao said Biden’s “clear message” had served to boost investor confidence in the United States, the world’s largest economy, which earlier this month came within days of a devastating default on its debts.
“In spite of the difficulties facing the US economy at present, I have full confidence that the United States will overcome these difficulties and get its economy back on the track of healthy growth,” Wen told Biden in talks Friday. It is important that you’ve sent a very clear message to the Chinese public that the United States will keep its word and obligations with regard to its government debt,” he said.
“It will preserve the safety, liquidity and value of US Treasuries. I’m sure that will give a boost to investors’ confidence in the US economy.”
Wen echoed earlier comments by Biden’s Chinese counterpart Xi Jinping, who is widely expected to be named as the country’s next leader in 2012, and who is hosting the five-day official visit.
Xi’s statement that the US economy was “highly resilient” and had a “strong capacity of self repair” was in stark contrast to a barrage of criticism in China’s state-run media.
China, the world’s number two economy, which held around US$1,17 trillion in US Treasury bonds at the end of June, watched nervously earlier this month as a political impasse brought Washington close to default.
In a commentary last week, the state news agency Xinhua called America’s debt a “ticking time bomb” and urged Biden to “assure Chinese leaders of Washington’s capacity, will and commitment to tackle its fiscal and economic challenges”.
In his talks with Wen, Biden stressed the United States would take care of US Treasuries.
“Very sincerely, I want to make clear that you have nothing to worry about in terms of their viability,” he said, before meeting with President Hu Jintao.
Vice President Xi also said there was a need to restore confidence in the global markets, as stock markets plummeted after a fresh warning that the US and eurozone economies were close to a double-dip recession.
“Destabilising factors confronting world recovery have intensified, posing new challenges to economic growth and the businesses of our two countries,” he said. – AFP.