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Biden Reassures China on US Debt

U.S. Vice President Joe Biden, right, walks with Chinese Vice President Xi Jinping, left, as they visit the South Bridge in Dujiangyan on the outskirts of Chengdu, in southwestern China's Sichuan province, Sunday, Aug. 21, 2011

Vice President Joe Biden sought to reassure China Sunday that its vast financial assets in the United States are safe and that America will never default on its debts.

In a speech to university students in Chengdu, Biden said he is confident about the strength of the U.S. economy. He noted that Americans still hold the vast majority of the ballooning U.S. debt, leaving Washington with great domestic incentives to rein in spending and ensure repayment.

In response, China's official Xinhua news agency Sunday called Biden's reassurances "far from enough" to soothe concerns in China and other major markets. Xinhua's commentary called for concrete U.S. actions, and said Washington must "realize that confidence can not be established through mere rhetoric."

The U.S. vice president also praised China's growing economy and noted that the United States and China face many common global threats and share many of the same strategic objectives and responsibilities.

Biden's visit comes less than two weeks after an unprecedented U.S. credit downgrade -- a move that sparked global concerns about the safety of dollar assets.

China holds about $1 trillion of U.S. debt, making it the biggest foreign creditor of the United States. It has expressed concern that the deal to raise the U.S. debt ceiling, barely avoiding default, does not do enough to cut the budget deficit.

Biden arrived in Beijing Wednesday for a series of meetings with Chinese Vice President Xi Jinping, President Hu Jintao, legislative head Wu Bangguo and Premier Wen Jiabao.

He visits Mongolia and Japan before returning home later this week.