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Biden: China didn't need reassurance on U.S. economy

U.S. Vice President Biden attends a discussion with U.S. and Chinese business leaders at Beijing Hotel in Beijing
U.S. Vice President Biden attends a discussion with U.S. and Chinese business leaders at Beijing Hotel in Beijing

By Jeff Mason

TOKYO (Reuters) - Vice President Joe Biden said on Monday China's leaders did not seek reassurances about the weak U.S. economy, and he called Xi Jinping -- the man expected to take over as China's next president -- pragmatic and strong.

Biden, who kicked off a trip to Asia last week with talks in Beijing, said the United States would continue to press China to let its yuan currency rise, but he made clear he did not expect that to happen quickly in the coming year.

Many analysts viewed Biden's trip as a tour to convince the largest foreign holder of U.S. debt that its investments were safe after a bitter political debate in Washington over U.S. debt and deficit problems sparked a credit downgrade.

But Biden said his counterparts such as Xi, the Chinese vice president, who spoke confidently about the U.S. economy in public during the visit -- did not ask for reassurance.

"I didn't sense it a bit that they needed reassurance about our economic stability or well-being," Biden said in an interview with a small group of reporters traveling with him on his plane, Air Force Two, while flying to Tokyo.

"I didn't get any sense that there was any anxiety on the part of the Chinese government about whether or not we were a rising or declining economic power," he continued.

"I got the sense that, just like with us, they were hoping we'd begin to grow again seriously -- because it's in their interest. So it wasn't like, 'Is my investment OK?'"

Biden said China's leaders had not expressed concern about ratings agency Standard & Poor's downgrade of U.S. debt, but he added he was personally disappointed by the move.

Biden's meetings with Xi were watched carefully for clues about the next leader of the world's second largest economy, who is expected to succeed Hu Jintao in 2013.

"My impressions of Xi were that he's strong, that he's pragmatic," Biden said. "I would guess his highest priority is not to have any surprises in the (U.S.-China) relationship."

The one surprise that took place during Biden's trip was in a sports arena, where a Georgetown University basketball game with a Chinese team erupted into a brawl.

"It was unfortunate," Biden said of the skirmish, which he did not witness. "That kind of thing could happen in a game at home and it wouldn't have, you know, political consequences."

ECONOMIC PLANS

The political consequences of the struggling U.S. economy are a worry for Biden and President Barack Obama.

Asked about Obama's plans to lay out new proposals in coming weeks to boost job growth, Biden said a payroll tax cut for businesses was "on the table." He declined to give details.

The Obama administration has pressed Beijing to let its yuan currency rise faster against the U.S. dollar, a move it says would help create jobs in the United States by offsetting a huge trade imbalance.

But Biden said the appreciation process would not speed up significantly as China went through its leadership transition.

"I think they'll continue to let their currency be revalued marginally," Biden said.

"We intend to push them, but I think the year 2012 is going to be not a year of radical change in China."

The U.S. vice president, who was a key player in reaching a deal with Republicans to raise the debt ceiling and cut the deficit, said there was a shot the two parties would reach a deal to trim the deficit more under a new congressional committee, although there was still a risk that a trigger for automatic cuts would be used.

"A lot has changed in the political and economic landscape in the last three weeks to a month, so the certitude with which some of the political players could hold to an uncompromising position may not be able to be done ... now," he said.

"Some of this is really difficult, but some of it's really easy, if in fact the wake-up call has actually been heard."

The debate over the deficit and Washington's plans to improve the economy will dominate the 2012 presidential campaign.

Asked if he and Obama could win re-election with U.S. unemployment hovering at 9 percent, Biden had a simple answer: "Yes."

(Editing by Peter Cooney)

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