China says US economy remains ‘resilient’

‘It has a strong capacity for self-repair’:

CHINA: China’s leader-in-waiting said America’s economy was “highly resilient” but stressed the need to restore confidence in global markets Friday, after holding talks with the visiting US vice-president.

Xi Jinping, who is widely expected to be named as the country’s next leader in 2012, made the comments during a five-day visit to China by Joe Biden, who is trying to shore up the reputation of his country’s battered economy in Asia.

China is the largest foreign holder of US debt and Biden, who will hold talks with Chinese President Hu Jintao later Friday, is visiting after a historic downgrade of the US credit rating earlier this month.

“The US economy is highly resilient and has a strong capacity of self repair. We believe the US economy will achieve even better development as it rises to challenges,” Vice President Xi told a roundtable of American and Chinese business leaders.

Xi also stressed that China’s economy — which is shifting towards a greater reliance on domestic demand — would be a boon for the United States.

“In the next five years, China is expected to import over $8 trillion of commodities and by 2015, total retail sales are expected to reach 32 trillion yuan ($5 trillion),” he said.

“That will create greater business opportunities for American businesses.”

Xi also stressed the need to restore confidence in the global markets, as stock markets plummeted after Wall Street investment bank Morgan Stanley warned 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.

“Under such circumstances, what is most important is to reinforce confidence, as confidence is more precious than gold.”

Xi said China would “strike a proper balance between fast and steady growth, adjustment of economic structure and managing inflation expectations”, adding his country’s booming economy would not suffer a “hard landing.”

Beijing has been struggling to tame inflation, which last month hit a three-year high, fuelling international concerns about instability in the Chinese economy at a time of renewed global financial peril.

Xi also called on the United States to ease trade restrictions and provide for fair treatment of Chinese firms, pledging that Beijing remained committed to opening up its markets.

The United States and China “should not politicise or sensationalise trade issues”, he added.

Biden’s talks with Hu and Premier Wen Jiabao later Friday will take place against a backdrop of intense criticism in China over Washington’s handling of the debt crisis.

China’s state-run media has accused US leaders of acting irresponsibly after the world’s largest economy came close to a disastrous default on its debts earlier this month.

In a meeting Thursday, Biden told his Chinese counterpart he was “absolutely confident that the economic stability of the world rests in no small part on cooperation between the United States and China”.

Biden’s trip during which China and the United States signed deals worth nearly $1 billion, according to a US official who requested anonymity is aimed partly at building ties with Xi, who remains virtually unknown in US policy circles.

It also comes amid growing concern in the United States about China’s rights record. US officials said Biden had raised the issue with Xi.

Washington this week appealed to Beijing to free prominent rights lawyer Gao Zhisheng, who has defended some of China’s most vulnerable people including Christians and coal miners, and has not been heard of since last year.

But the main focus of the China visit Biden’s first as vice president will be Beijing’s concerns over the safety of its US investments.

China, which held around $1.17 trillion in US Treasury bonds at the end of June, watched nervously as a political impasse brought Washington close to default this month and Standard & Poor’s downgraded the country’s credit rating. AFP