23 Aug 2011

VP says US would never default

11:55 am on 23 August 2011

United States Vice-President Joe Biden said in China on Sunday that 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.

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

''The United States has never defaulted and never will default,'' he said.

The BBC reports China is the American government's biggest foreign creditor - holding $US1 trillion in US debt. It has called on the United States to do more to reduce its federal budget deficit.

Analysts say China is clearly worried about its holding.