Addressing a university audience in China’s southwestern city of Chengdu on Aug. 21, Biden said Washington is not only interested in protecting Chinese investment but all investment, reported The Economic Times
Rejecting the view that US power is waning, Biden told his audience America cares most about investment since 87 percent of its financial assets and 69 percent of its treasury bonds are owned by Americans.
In comparison, China owns one percent of US financial assets and 8 percent of its treasury bills. So, Biden says, the US will never default.
Biden reminded the audience that the US is still the world’s biggest economy with a GPD of around $15 trillion which is about two-and-a-half times that of China.
“You‘re safe,” he assured
his Chinese audience while answering a question.
Biden’s assurance to China follows Chinese worries about the US economy that led to Chinese economist Yu Bin’s statement
asking Beijing to assess potential risks to the debts owed by the US.
In about a year’s time, China has bought $600 billion in bonds and has expressed concern over the prospects of American economy, particularly its ability to repay debt.
The Dagon rating agency in China has been watching the US economy for signs of worsening so that it may accordingly downgrade the national rating of US.
Last November, the agency downgraded the US from AA rating to that of A plus.