Biden tells China cooperation essential to boosting global economy

BEIJING: China and the United States share a responsibility for boosting global market confidence, Chinese Vice President Xi Jinping told visiting U.S. Vice President Joe Biden in talks Thursday that focused on shoring up trust between the two big powers.

Xi (pronounced “Shee”), expected to succeed Hu Jintao as president from early 2013, will inherit responsibility for his nation’s vast, sometimes troublesome relationship with the U.S.

In remarks to Biden as reported by the Chinese Foreign Ministry, Xi made clear economic concerns are for now dominating that relationship, while also warning about friction over Taiwan, the self-ruled island claimed by Beijing.

“Recently, turmoil in international financial markets has deepened and global economic growth faces severe challenges,” Xi told Biden, according to the ministry.

“As the world’s two biggest economies, China and the United States have a responsibility to strengthen macro-economic policy coordination and together boost market confidence.”

Biden’s visit is about building trust, not striking deals, and he also focused on shoring up optimism about U.S. power and prospects for Sino-American relations.

“I would suggest that there is no more important relationship that we need to establish on the part of the United States than a close relationship with China,” Biden told Xi in the Great Hall of the People, a cavernous ceremonial chamber. “I am absolutely confident that the economic stability of the world rests in no small part on cooperation between the United States and China.”

Biden will also be looking for signs of how Xi, 58, intends to handle relations, which span currency and trade ties and tensions, U.S. arms sales to Taiwan, diplomatic disputes from Sudan to North Korea, and contention over human rights.

“Foreign policy is more than just one visit, it’s about establishing relationships and trust,” Biden told Xi, a tall son of a revolutionary veteran. “It is my fond hope that our personal relationship will continue to grow as well.”

Biden’s five-day visit allows China to test Washington’s intentions on U.S. debt and new arms sales to Taiwan, the self-ruled island that Beijing calls a breakaway province.

Xi will burnish his profile through meetings with Biden and a visit to the United States, possibly in early 2012. He will also have to show he can navigate minefields in relations.

Beijing wants assurances from Biden that its vast holdings of dollar assets and U.S. Treasury debt remain safe, despite Standard & Poor’s downgrade this month of the sovereign credit rating of the United States, official media have indicated.

Xi’s published remarks made no mention of that issue.

But media coverage of the U.S. debt debate and slow growth has exuded a sense that, after long lectures from Washington about the yuan currency, trade gap, intellectual property piracy and human rights, Beijing now occupies the moral high ground.

Since the downgrade, state media have accused Washington of reckless policies that have created uncertainty about Beijing’s holdings of dollar assets. Analysts estimate Beijing has put two-thirds of its $3.2 trillion in foreign exchange reserves, the world’s largest, in dollars and is the biggest foreign creditor to the United States.

“U.S. desperate for vote of confidence from China,” said the headline in the Global Times tabloid.

However, Biden wants to counter the impression that American power and confidence are waning.

“I also come with a strong message that the United States of America is and will continue to be engaged totally in the world,” Biden told Xi in the Great Hall.

Despite the downgrade, investors have poured funds into U.S. Treasuries as a safe haven amid turmoil in global equity markets and doubts about the strength of European growth.

After his meeting with Xi, Biden visited a restaurant offering a Beijing delicacy, pig liver stir fried with vinegar and soy sauce, but a White House official said he stuck to plainer fare: pork buns, noodles and cucumbers.

“The meetings were great. But it’s harder to order,” Biden told reporters in the humble-looking restaurant.

Despite the diplomatic backslapping, U.S. arms sales to Taiwan remain a volatile issue. It brought a sharp cooling of ties early last year, when Beijing curtailed military contacts to protest against an American arms package for Taiwan.

Now Washington is considering a new arms sale to the island, which could include new Lockheed Martin F-16 C/D fighter jets. Sources have told Reuters that sale appears unlikely to go through, although no final decision has been reached.

Xi warned against riling China over Taiwan or Tibet.

“Taiwan and Tibet are issues concern China’s core interests, and they concern the feelings of 1.3 billion Chinese people,” said Xi. “They must be carefully and appropriately handled to avoid interference in and damage to Sino-U.S. relations.”