US won't default on debt: Biden tells China

United States vice president Joe Biden wrapped up his visit to China after seeking to reassure China that the US would never default on its debt, and reiterated that China's large holdings of dollar assets were safe.

"The US has never defaulted, and never will," Biden said during an hour-long speech on Sunday at Sichuan University in Chengdu.

"Please understand that no-one cares more about this than we do, since Americans own 87 per cent of all our financial assets," he said. "We have an overarching interest in protecting the investment, while the United States has never defaulted and never will default."

With $1 trillion worth of US treasury bonds, China is the largest foreign holder of US Treasury bonds, although the majority remains in the hands of the US public, the vice-president commented, "We cannot afford not to make good on (our debt)."

"I believe the US is even better equipped to compete in the economy of the future than it was in the past," he said, adding that the country remains the best bet among global investment destinations.

Biden's trip comes amid mounting tension between the two over America's debt. Biden's visit was to generate confidence of the US economy among Chinese leaders.