By Brai Odion-Esene

WASHINGTON (MNI) – U.S. Vice President Joe Biden will use his
four-day visit to China, part of a seven-day swing through East Asia, to
press for greater flexibility in China’s currency policies, while also
discussing the recent debt deal between the White House and Congress.

Biden East Asia trip begins in China from August 17 to 22 — three
days in Beijing followed by one in the south-western city of Xiandu. He
will then make a brief visit to Mongolia on the 22nd, before spending
August 22-24 in Japan.

What makes the vice president’s visit timely is that both the
United States and China are currently trying to tackle a range of
security and economic issues, Daniel Russel, senior director for Asian
Affairs on the National Security Staff, told reporters during a
conference call to preview Biden’s trip.

China on the one hand is battling to contain rising consumer prices
while working on reducing its reliance on exports to grow, while the
U.S. must implement fiscal reform to tackle its long-term federal debt
load.

“As we move forward on addressing our fiscal challenges, Chinese
policymakers know they can no longer count on the U.S. consumer to
provide that demand to the global economy,” said Lael Brainard, the U.S.
Treasury’s undersecretary for International Affairs.

As the U.S. and China move to address their respective challenges,
she said both have “very strong” mutual interests, and those are the
issues that the vice president is going to raise with China’s leaders.
He will also talk about the Budget Control Act, she said.

Brainard added that, from an economic standpoint, the trip provides
an opportunity to advance American economic interests, especially with
regard to the trade/investment relationship between the U.S. and China.

Biden will carry the message about the need to continue work on
levelling the playing field for U.S. businesses and workers, she said,
particularly when it comes to China’s exchange rate policy.

Biden will place a “special emphasis” on the need for a faster rate
of yuan reform, Brainard said.

She noted that while there has been some appreciation allowed in
the value of the renminbi vs. the U.S. dollar, “We are going to keep
pushing on that front, the exchange rate remains substantially
undervalued.”

She also repeated comments underlining how important it is that
China “re-orient” its economic strategy away from export-led growth to a
greater reliance on growth fueled by domestic demand. Brainard also
repeated that greater flexibility in China’s exchange rate policy would
help ease the inflationary pressure it faces.

More broadly, Biden’s trip “is part of the administration’s
dedicated effort over the last two and a half years to renew and
intensify the U.S. role in Asia,” according to Tony Blinken, Biden’s
national security advisor. “The vice president’s trip is a reflection of
our belief that the United States is a Pacific power whose interests are
inextricably linked with Asia’s economic security and political order.”

One of the purposes of Biden’s trip will be to get to know China’s
leadership, Blinken said, using the opportunity to discuss “the full
breadth” of issues of importance to both countries.

The goal is to sustain “regular and high level contacts” with
China’s leaders as a way to ensure the U.S. is able to speak directly
and “authoritatively” about the entire spectrum of issues that matter to
both nations, Russel said.

So while in Beijing, Biden will hold two meetings with Vice
President Xi Jinping, meet with President Hu Jintao and Premier Wen
Jiabao, and Chinese and U.S. business leaders as well.

The discussion with business leaders will provide an opportunity
for both sides to discuss their experiences in operating in either sides
countries. “The opportunities, the obstacles, the roles that governments
can play to enhance cooperation and address some of the challenges that
our business communities face,” Blinken said.

Biden’s visit to Japan is intended to “underscore” the U.S.-Japan
alliance, Blinken said. He will meet with Japan’s Prime Minister Naoto
Kan as well as visit Sendai, a city struck by the earthquake and
subsequent tsunami in March.

The Obama administration recognizes that both the U.S. and global
economy have a big stake in a full and fast recovery by Japan, Russel
said. “The president and the vice president are confident Japan will
emerge stronger than before,” he said.

** Market News International Washington Bureau: 202-371-2121 **

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