Biden to Tell Chinese Officials U.S. Still Good Investment After Downgrade

The vice president, who landed in Beijing yesterday, will seek to allay concerns being expressed in China -- the biggest foreign holder of U.S. Treasuries -- that the deficit deal struck by Congress and the Obama administration earlier this month doesn’t go far enough to rein in the nation’s long-term debt and that U.S. growth will stall. Today he meets with Vice President Xi Jinping, who is set to begin assuming power from President Hu Jintao next year.

In an interview with China’s Caijing magazine published yesterday, Biden said the administration “is deeply committed to maintaining the fundamentals of the U.S. economy” so as to “ensure the safety, liquidity, and value of U.S. Treasury obligations for all of its investors.”

A day after Standard & Poor’s downgraded U.S. debt to AA+ from AAA, China’s official Xinhua News Agency issued a warning: “The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone.” In a commentary yesterday, Xinhua said “runaway” U.S. debt was “a ticking time bomb.” Fitch Ratings on Aug. 16 affirmed its top AAA rating on U.S. Treasuries.