Aug. 21 (Bloomberg) -- Vice President Joe Biden said China’s human rights record impedes its economic growth and that U.S. advocacy for greater freedoms isn’t meant to undermine stability in Asia’s largest economy.
“Maybe the biggest difference” between the two countries is their approach to human rights, Biden said in remarks at Sichuan University in Chengdu, on his last day in China. “I recognize that many of you in this auditorium see our advocacy of human rights as at best an intrusion and at worst an assault on your sovereignty.”
Biden’s remarks follow his three days in Beijing, where he told Chinese Premier Wen Jiabao on Aug. 19 that China has nothing to fear when it comes to its investment in U.S. Treasuries. China’s Treasury holdings of $1.17 trillion, while down from their high of $1.18 trillion in October, have increased for the past three months, data compiled by Bloomberg show.
The U.S. and China have followed different paths, Biden said today. While China has embraced parts of a free market system it has done so “while resisting political openness and maintaining the state’s deep involvement in economic affairs.”
Biden’s visit was scheduled before the first-ever downgrade of U.S. debt by Standard & Poor’s on Aug. 5 and that issue has overshadowed public discussions between the vice president and Chinese leaders. A day after S&P cut U.S. debt to AA+ from AAA, China’s official Xinhua News Agency said the U.S. government must realize it can no longer “borrow its way out of messes of its own making.” China is the biggest single foreign owner of U.S. debt.
“The Chinese people should take solace,” Biden said today in the southwestern Chinese city. “You’re safe.”
Biden, who is on a three-nation, nine-day trip to Asia, also struck a harder tone on trade, saying “we’re in trouble” when U.S. investors can’t have fully owned subsidiaries of their company operate in many sectors in China and are “entirely excluded from competing in other sectors.” Those are “restrictions that no other major economy imposes on us or anyone else so broadly.”
On Aug. 19, Biden held a roundtable discussion in Beijing with about 20 U.S. and Chinese business leaders, including Coca- Cola Co. Chief Executive Muhtar Kent. China’s undervalued exchange rate, opening up the Chinese market to U.S. exports, and protecting intellectual property rights are top concerns for U.S. companies.
J. Stapleton Roy, director of the Kissinger Institute on China and the U.S. ambassador to China from 1991 to 1995 said the U.S. cannot afford to press China too much on trade.
“If we move to restrict trade this would be the counterpart to the Smoot Hawley tariff in the Great Depression which had an enormous negative impact,” Roy said in an interview. “Trade protectionism as a way of dealing with our trade imbalance with China would be a step in the wrong direction.”
Roy said the Chinese will naturally want to let their currency appreciate more to help them deal with inflation.
“There’s a built in corrective factor” in the U.S.-China relationship, he said. Because it’s so “immensely important to both countries” when it becomes too strained leaders will work to improve it.
Biden, who arrived in Beijing on Aug. 17, must have fielded a barrage of questions from Chinese officials about U.S. debt during private meetings, said Elizabeth Economy, director of Asia studies at the Council on Foreign Relations in New York.
She said top on the list would have been: “What’s the long term game plan and can China rely on the United States not to try to basically destroy the value of China’s holdings?”
Administration officials insist that the main point of the vice president’s visit is to get to know his counterpart China’s Vice President Xi Jinping, the man most likely to replace Chinese President Hu Jintao in 2013.
The two leaders will spend much of the day together. Xi came to Chengdu from Beijing and will travel with Biden to Dujiangyan, a city in Sichuan Province that was badly hit by an earthquake in May 2008 and later tonight they will have a private dinner.
In Beijing, Biden told Wen: “We appreciate and welcome your concluding that the United States is such a safe haven because we appreciate your investment in U.S. Treasuries.” Biden said he wanted to make clear “that you have nothing to worry about in terms of their viability.”
Tomorrow, Biden will travel to Ulan Bator, Mongolia, where he will celebrate the country’s democracy and attend cultural activities including a demonstration of traditional Mongolian sports such as archery, wrestling and horseback riding.
--Editors: Patrick Harrington, Paul Tighe
To contact the reporter on this story: Kate Andersen Brower in Chengdu, China at firstname.lastname@example.org
To contact the editor responsible for this story: Mark Silva at email@example.com.
© Copyright 2016 Bloomberg News. All rights reserved.