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Biden heads to China under debt cloud

world Updated: Aug 17, 2011 10:30 IST

AFP
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Vice President Joe Biden arrives in China on Wednesday under a cloud of criticism over the US debt, as he seeks to build a rapport with the man expected to be the rising Asian power's next leader.

Biden, a veteran foreign policy hand during his 36-year Senate career, made a refueling stop Tuesday in Alaska ahead of his five days in China. He will later visit emerging US partner Mongolia and longstanding ally Japan.

The number-two US leader's trip was months in the planning and came at the invitation of Vice President Xi Jinping, who is expected to become China's top leader by 2013 and remains virtually unknown in US policy circles.

But while Biden will focus his trip on building a working relationship with Xi, his trip risks being overshadowed by China's scoldings of the United States, which this month came within hours of defaulting on its debt.

China is the largest foreign holder of US bonds. China's state-run media was scathing over the political showdown on the debt, calling the United States irresponsible and demanding that it live within its means.

Lael Brainard, the undersecretary of the Treasury for international affairs, insisted that the US economy remained the "most flexible, the most innovative" in the world and that the August 2 debt deal was a "major step" toward fiscal responsibility.

Previewing Biden's message, Brainard said Monday that he would tell China that it should focus on reforms such as letting its currency appreciate and shifting from a reliance on exports to an economy based on consumption.

Some US experts see China's criticism as a way to hit back at the United States, which regularly extols its model of democracy, but others believe that Beijing has serious worries about its $1.2 trillion invested in US Treasuries.

"They are concerned about whether the United States is going to behave responsibly and they are responding to criticism from their own people," said Bonnie Glaser, a scholar at the Center for Strategic and International Studies.

Scott Paul, executive director of the Alliance for American Manufacturing, said that China's criticism laid bare what he considered a strategy to preserve a weak currency to boost its exports.

"They have helped to dig their own grave on this. No one is forcing them to buy Treasuries and the great irony is that they buy them to keep the value of the yuan artificially low as part of their economic development strategy," Paul said.

"They would never willingly admit that because it would validate the concerns that a lot of people have," he said.

US lawmakers approved a controversial deal to raise the legal ceiling on US debt in a package that will cut up to $2.5 trillion in spending.

Secretary of State Hillary Clinton, speaking Tuesday at the National Defense University, vowed that the United States would remain engaged as a "Pacific power" despite the spending cuts.

"We can't be abruptly pulling back or pulling out when we know we face some long-term challenges about how we are going to cope with what the rise of China means," she said.

Biden's trip comes amid growing concern in the United States about China's human rights record. Soldiers and police on Tuesday surrounded a monastery after a Tibetan Buddhist monk set himself on fire and died as a protest.

The Nyitso monastery is in a part of Sichuan province near Tibet; Biden will visit Sichuan's capital Chengdu alongside Xi.

A legal counsel for jailed dissident writer Liu Xiaobo, who won last year's Nobel Peace Prize, urged Biden to see Liu's wife Liu Xia.

Jared Genser, who heads the legal advocacy group Freedom Now, said that Biden could test China's denials that Liu Xia is under house arrest.

"If its statement is accurate, there should be nothing to prevent Vice President Biden from meeting with Liu Xia in China," Genser said.

Sophie Richardson of Human Rights Watch said that Biden should also press publicly about the treatment of critics including missing rights lawyer Gao Zhisheng and Chen Guangcheng, who exposed abuses in the one-child policy.

Biden's aides said he did not plan to speak to China about Taiwan.

The United States is expected to decide by October on whether to sell F-16 fighter jets, a step promoted by US lawmakers but strongly opposed by Beijing which regards the island is part of its territory awaiting reunification.