China says US economy remains 'resilient'

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China's leader-in-waiting on Friday expressed confidence in the battered US economy and warned against politicising trade issues, on the third day of an official visit by America's vice-president.

Xi Jinping made the comments at a roundtable of American and Chinese business leaders hosted by Joe Biden, who is trying to shore up the reputation of his country's economy on his five-day trip after a debt crisis.

China's Vice President Xi, who is widely expected to be named as the country's next leader in 2012, was speaking ahead of planned talks between Biden and Chinese President Hu Jintao later Friday.

"The US economy is highly resilient and has a strong capacity of self repair. We believe that the US economy will achieve even better development as it rises to challenges," said Xi.

"We hope that the business people of the two countries will bring forth confidence and work hard to turn challenges into opportunities and embrace change and innovation."

Xi also said that the Chinese economy would not suffer a hard landing, and called on the United States to ease trade restrictions and provide for fair treatment of Chinese firms.

The United States and China "should not politicise or sensationalise trade issues", he added.

Biden's talks with Hu and Premier Wen Jiabao later Friday will take place against a backdrop of intense criticism in China, the largest foreign holder of US debt, over Washington's handling of the debt crisis.

Xi's conciliatory comments contrast with the attitude taken by Chinese state media in recent weeks, which has accused US leaders of acting irresponsibly after the world's largest economy came close to a disastrous default on its debts earlier this month and suffered a historic credit rating downgrade.

In a meeting Thursday, Biden told his Chinese counterpart he was "absolutely confident that the economic stability of the world rests in no small part on cooperation between the United States and China".

"It affects every country from your neighbour to the north, to Argentina in the southern tip of South America. It is the key, in my view, to global economic stability," he added.

Biden's trip is aimed partly at building ties with the likely next leader of the world's second-biggest economy, who remains virtually unknown in US policy circles.

It comes amid growing concern about China's human rights record in the United States, which this week appealed to Beijing to free prominent rights lawyer Gao Zhisheng. US officials said he had raised the issue with Xi.

Gao, who defended some of China's most vulnerable people including Christians and coal miners, was placed under house arrest in 2006 and has not been heard of since last year.

But the main focus of the China visit -- Biden's first as vice president -- will likely be on Beijing's concerns over the safety of its US investments.

China, which held around $1.17 trillion in US Treasury bonds at the end of June, watched nervously as a political impasse brought Washington close to default this month and Standard & Poor's downgraded the country's credit rating.

Biden is also expected to suggest that China should focus on its own economic reforms, such as letting its currency appreciate and shifting from a reliance on exports to an economy based on consumption.