US will never default, Vice-President Biden tells China

Joe Biden tells students that dollar assets "are safe"

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United States Vice-President Joe Biden, who is visiting China, has said the US would never default on its debt.

In a speech on the last day of his visit, he reiterated that China's large holdings of dollar assets were safe.

His trip comes amid mounting tension between the two over America's debt.

Chinese officials have criticised the political row in the US over raising its borrowing ceiling, and expressed concern over the recent downgrade of the country's credit rating.

"You're safe," Mr Biden told university students in the south-western town of Chengdua, in answer to a question about Washington's ability to repay its debt.

"Please understand that no-one cares more about this than we do, since Americans own 87% of all our financial assets."

"We have an overarching interest in protecting the investment, while the United States has never defaulted and never will default."

China is the American government's biggest foreign creditor - holding $1tn (£608bn) of US debt - and has called on the country to do more to reduce its budget deficit.

Earlier this month, the US suffered a historic credit downgrade by rating agency Standard & Poor's.

Analysts say China is clearly worried about its holding, and about criticism at home for having so much of the country's savings in US investments.

In Sunday's speech, Mr Biden also called the rise of China as a global power a positive development for the US and the world as a whole.

And in a reference to human rights, he remarked that Beijing should cherish an exchange between citizens, students and their government.

Mr Biden's five-day visit was overshadowed by a brawl at an exhibition basketball game between a US and a Chinese team.

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