Biden Aims to Bolster President Hu’s Confidence in U.S. Economy
[Sorry, the video for this story has expired, but you can still read the transcript below. ]
JEFFREY BROWN: Financial concerns, especially the state of the U.S. economy, dominated Vice President Biden’s talks with Chinese leaders today in Beijing. As they met, sell-offs spread from stock markets in Asia around the world, all the way back again to Wall Street.
U.S. stocks held their losses in check for much of the day, but fears of a new recession ultimately got the better of investors. The Dow Jones industrial average ended the day with a loss of nearly 173 points, to close at 10,817. For the week, it was off four percent. The Nasdaq fell 38 points to finish at 2,341, ending the week down more than six percent.
European markets had been down sharply in initial trading, but rebounded somewhat as the day went on. Traders in Asia, working hours earlier, took their cue from Thursday’s 400-point loss on the Dow. Major indexes from Hong Kong to Japan to South Korea plummeted 2.5 to six percent.
Chinese market analyst Yu Shao watched the sell-off from Shanghai.
YU SHAO, Orient Securities (through translator): Right now, we are in a negative feedback loop. So, when the sun rises, from Asia to Europe and then to America, each market influences the others in this negative loop. The key is to see who will be the first to get out of this negative feedback loop.
In the past week, the first to pull out were the Asia-Pacific markets, especially the Chinese ones, which highlighted the confidence and optimism in this region.
JEFFREY BROWN: The Chinese have also kept a close eye on the situation in the U.S. As America’s largest foreign creditor, China holds $1.2 trillion in U.S. government bonds.
In Beijing today, Vice President Joe Biden tried to shore up confidence in the U.S. economy. He told Chinese President Hu Jintao that, when it comes to Chinese investments in the U.S. — quote — “You have nothing to worry about.”
VICE PRESIDENT JOSEPH BIDEN: To get straight to the point, Mr. President, President Obama asked me to come to Beijing to meet with you and others to reaffirm our absolute, total commitment to a strong and enduring positive relationship with China.
JEFFREY BROWN: Still, the recent debt ceiling battle in Washington has drawn sharp criticism from Beijing. Last month, the state-run news agency, Xinhua, complained the U.S. debate “kidnapped” the worldwide economy. It said American politicians had engaged in “dangerously irresponsible political brinksmanship.”
This week, amid the Biden visit, China’s Vice President Xi Jinping, who is expected to become the next president in 2013, took a friendlier tack.
XI JINPING, Chinese vice president (through translator): In the current new situation, China and the U.S. share a wider common interest. We should also bear more important common responsibilities. It is the common expectation of the peoples of China and the U.S. and the people of the whole world for the two nations to carry out closer cooperation.
JEFFREY BROWN: Xi also said today the U.S. economy is — quote — “highly resilient.”
Meanwhile, another attempt to improve U.S.-China relations turned sour this week. A Chinese team got into a punching, chair-throwing brawl with the Georgetown University men’s basketball team, captured on this video from SportsGrid.com. The Georgetown team was visiting from Washington on a goodwill tour.
For his part, Vice President Biden, who’d attended a more peaceful game earlier in the week, wraps up his China visit Sunday.