US-China cooperation key to economic stability: Biden

BEIJING, Aug 18, 2011 (AFP) - US Vice President Joe Biden told his Chinese counterpart Thursday global economic stability depended on the two nations, as he began an official visit under a cloud of criticism over the US debt crisis.

Biden, 68, is under pressure to revive the image of the United States after the world's largest economy came close to a disastrous default on its debts earlier this month and suffered a historic credit rating downgrade.

AFP - US Vice President Joe Biden (L) listens to the US national anthem with Chinese Vice President Xi Jinping (R) during a welcome ceremony in the Great Hall of the People in Beijing on August 18, 2011

China is the biggest foreign holder of US debt and the country's state-run media have delivered a barrage of criticism of Washington's handling of the crisis, which it has described as a "ticking time bomb".

"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 told Xi Jinping, who is expected to succeed President Hu Jintao in 2013.

"Our commitment to establishing a close and a serious relationship with the people of China is of the upmost importance to my country."

Biden attended a welcoming ceremony at Beijing's Great Hall of the People before holding talks with the Chinese vice president.

Xi is hosting the visit, which is aimed partly at building ties with the next leader of the world's second-biggest economy, who remains virtually unknown in US policy circles.

Chinese media said the debt crisis, the value of China's currency and US weapons sales to Taiwan, which Beijing sees as part of its territory, would be the top items on the agenda for the visit.

The China Daily said US arms sales to the island were the "biggest source of disagreement between Washington and Beijing".

"The US has shown increasing concern over China's growing global influence and a new round of arms sales to Taiwan is brewing in Washington," said an editorial in the English-language newspaper.

"Any misstep in dealing with the issue of arms sales to Taiwan may disrupt the improving relationship between the two powers."

The United States is expected to decide by October whether to sell Taipei F-16 fighter jets, a step promoted by US lawmakers but strongly opposed by Beijing. Biden's aides said he did not plan to speak to China about Taiwan.

Biden, who attended a friendly basketball game between a Chinese team and the Georgetown University Hoyas after landing in Beijing on Wednesday, will use the visit to try to build a rapport with Xi.

"It is my fond hope that our personal relationship can grow," he told Xi.

The US number two is also due to meet China's parliamentary chief Wu Bangguo later Thursday, and will hold talks with Hu and Premier Wen Jiabao on Friday before travelling to the southwestern boomtown of Chengdu.

The main focus of the China visit -- Biden's first as vice president -- will likely be on Beijing's concerns over the safety of its US investments.

As the largest foreign holder of US debt with around $1.17 trillion in US Treasuries by the end of June, China watched nervously as Washington came close to default this month and Standard & Poor's downgraded the US credit rating.

Biden is also expected to suggest that China should focus on its own economic reforms, such as letting its currency appreciate and shifting from a reliance on exports to an economy based on consumption.

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