Biden Promises the World in Chengdu, But Can He Deliver?

U.S. Vice-President Joe Biden has just left Chengdu and now he’s off to Japan and Mongolia to seek allies in the Great Encirclement. But while he was in China, Biden gave a speech at Chengdu’s Sichuan University that has been cited in the press, but a lot of what he said went unnoticed so I am reprinting some choice cuts from the speech (as well as linking to the transcript) because there were some fascinating and telling tidbits.

An Economic Reality Check

I thought the following quote was really interesting because as any American might tell you, the standard of living in the U.S. far surpasses how Chinese live, yet the U.S. is faltering while China rises. I feel a lot of this yapping is psycho-somatic, self-inflicted doldrums. And I am not sure why. Why would a country with a massive landmass, a relatively small population and the most creative and talented people around basically throw in the towel and give up?

So the quote below was kind of a wake up call:

“I also know that some of you are skeptical about America’s future prospects.

With that in view, I would like to suggest that I respectfully disagree with that view and will allay your concerns. Let me put this in perspective so you can understand why the American people are also confident about their future. America today is by far the world’s largest economy with a GDP of almost $15 trillion, about two and a half times as large as China’s, the second largest; with a per-capita GDP which is more than $47,000 – 11 times that of China’s. I’ve read that some Chinese are concerned about the safety of your investments in American assets. Please understand, no one cares more about this than we do since Americans own 87 percent of all our financial assets and 69 percent of all our treasury bonds, while China owns 1 percent of our financial assets and 8 percent of our treasury bills respectively.”

America today is by far the world’s largest economy with a GDP of almost $15 trillion, about two and a half times as large as China’s, the second largest; with a per-capita GDP which is more than $47,000.
Joe Biden & Xi Jinping in Dujiangyan

But then that was followed by the “Innovative & Green Revolution” rhetoric during Obama’s great run for the U.S. Presidency in 2008. I have seen little to prove that the government has any meat behind its words, and perhaps that is what helps drive the overall malaise: people waiting for the government to “do something”.

“In the 20th century, the wealth of nation was primarily measured by the abundance of its natural resources, the expanse of its landmass, the size of its population and the potency of its army.

But I believe in the 21st century, the true wealth of a nation will be found in the creative minds of its people and their ability to innovate – to develop the technologies that will not only spawn new products, but create and awaken entire new industries.

Freedom & Liberty Are Good for Business

That empty claim was followed by this jab at rote learning and static systems (not the attempt at making Sichuan University feel better):

“A system that trains students not merely to learn and accept established orthodoxy, but to challenge orthodoxy, challenge their professors, challenge the ideas put forward to them, encourage individual thought and innovation; a system that not only tolerates free expression and vigorous debate, including between citizens and their government, but celebrates and promotes those exchanges; a system in which the rule of law protects private property, provides a predictable investment climate, and ensures accountability for the poor and wealthy alike; and a system with universities that remain – notwithstanding, and this is a great university – the ultimate destination for scholars from around the world.”

Wouldn’t it be great if politicians actually followed up on what they said?

“Openness, free exchange of ideas, free enterprise and liberty are among the reasons why the United States, in my view, is at this moment the wealthiest nation in the history of the world. It’s why our workers are among the most productive, why our inventors and entrepreneurs hold more patents than any other country in the world, why we are reinvesting in the fundamental sources of our strength — education, infrastructure, innovation …”

This is what happens to Sino-US relations when the politicians stop talking. It can get ugly fast.

Biden On the Burden of the Elderly

The following was in response to a question from the audience: “What concrete measures will America take to reduce its deficit?”

“The bottom line is we have to deal with two elements of our economy.  One is what we call entitlement programs – long-term commitments to our people in the area of particularly Medicare.  That is the safety net we have for people once they reach the age of 65 to be assured that they have health care.

Biden never mentioned the second element, which I assume was either corporate tax loopholes or a plan to divert Wall Street bonuses to the needy. Biden strove for common ground with the Chinese – in this case overpopulation and its burden:

“I was talking to some of your leaders, you share a similar concern here in China. You have no safety net. Your policy has been one which I fully understand – I’m not second-guessing – of one child per family. The result being that you’re in a position where one wage earner will be taking care of four retired people. Not sustainable.”

Meanwhile in the United States you have Pro-Lifers angered at Joe Biden ‘not second-guessing’ China’s one-child policy.

How Much Weight Does Biden’s Speech in Chengdu Carry?

Perhaps not much, but we will see. But as Forbes said, at least Biden didn’t make a huge gaffe, right? I don’t know why, but I find myself caring a little bit more about politics again. After a long hiatus due to severe disgust, I find myself talking about Michelle Bachmann and Ron Paul and repeating to myself a greasy politico’s words:

I believe in the 21st century, the true wealth of a nation will be found in the creative minds of its people and their ability to innovate.

34 thoughts on “Biden Promises the World in Chengdu, But Can He Deliver?”

  1. Pingback: Hao Hao Report
  2. A lot about innovation in all of this. Same with the Munk Debate regarding whether or not China would rule the next century. More here:

    I’ve only been in the country (in CQ) for a couple of months but find it tricky not to see the supreme swag-jacking constantly going on across all cultural and business dimensions.

    Do you think the Chinese can innovate? Is the ability to innovate going to be important in the future or will China and other developing countries continue to ignore patents and the value of intellectual property?

    I’d say that and keeping a lid on domestic strife are China’s two biggest challenges long term.

    • well i cant view the debates but I would argue that China is not going to be the innovator that people need. I have been here for a long time and I have seen them copy increasingly cooler stuff, but still copy. Homegrown awesomeness is still very hard to find. Local appreciation for what is awesome has grown though … and that gives one hope. But what i wanted to say with this post is that the whole America/West is done rhetoric is really just self-fulfilling.

      The world still looks to the West for inspiration, whether they admit it, like to admit it or refuse to admit it, its still the truth right now. And I am not actually in favor of that type of situation.

      It would be nice if China could contribute. Japan does, Hong Kong does … so its just a matter of time I suppose.

      I guess hte question is how much time? And what goes on in the meantime. I mean for real, we are all here because China still needs a lot of things: good design, good management, good strategy, good technology etc.

      anyway comment length reaching limit …

      • You are going to wait another 20+ years atleast if the Asian Tigers in the past are any indication. Right now China’s GDP per capita is a measly $4382, that’s just slightly above Algeria’s $4366 and Angola’s $4329! Even dirt poor third world countries like Peru ($5205) and Thailand ($4992) are richer than China on per capita basis. So in reality, one should really consider China as a very poor third world country in AFRICA. You can’t expect a poor third world country to out innovate a developed country or the most developed country in the world (USA). That is just unfair comparison.
        In essence, China is still in the “copying”/learning phase of development.

        If you look at the past GDP per capita as indicator, you will see that every asian tiger countries (Hong Kong, Singapore, South Korea and Taiwan) plus Japan went through the same phase – below the $10,000 threshold, the country will invariably go through copycat phase (Japanese of the 60s and 70s, Korean and Taiwan of the 90s (the so called pirate kingdom), but I believe as the country become richer, competition become more fierce, they will eventually run out of things to copy. One of the most important reason is labor cost. Right now China’s major competitive edge is its cheap labor workforce. But as standard of living rises, so will the labor cost. When China’s cheap labor cost advantage evaporate, they will be forced to find ways to be competitive – and almost always with past as an example (the Asian Tigers, Japan, Europe, USA), innovation is the only way to stay competitive when labor and manufacturing costs become uncompetitive.

        So for now, I think China will continue to “copy” instead of innovate because it still has the labor cost advantage. You just wait and see when they hit the proverbial $15,000 per capita mark in 20 years time.

      • Another interesting thing I have notice is Biden’s quote :”….why our inventors and entrepreneurs hold more patents than any other country in the world….”
        It is interesting because if you compare list of countries by patents ( – USA is still at the top with number of patents in force, so Biden is not wrong when he said US holds more patents than any other country. But if you consider 2nd place Japan, with 1/3 of the population of USA is almost caught up, and both patent applications and patent granted category Japan is number 1 at the top, it makes one wonder if Biden is wrong in his speech when he said American is still the “most creative people”.
        Just a short 50 years ago, Japan was consider a “copycat nation”. Most US media derides Japanese as “uncreative”, because of “rote learning” education system. But look at Japan now. Its three times more “innovative” than American. South Korea is also coming up behind America in number of patents granted, with just over half of patents granted compare to America. But considering America has over 6.4 times the population over South Korea, South Koreans are 3.4 times more innovative than American by per capita basis! (number of patents granted / country’ population).

  3. I find in reading those sites that say that population problems are a myth that their evidence is very sparse and inconclusive. Recently I read Book 1 of the free e-book series “In Search of Utopia” (, it blasts their lack of evidence relative to their calling overpopulation a myth. The book, actually the last half of the book, takes on the skeptics in global warming, overpopulation, lack of fresh water, lack of food, and other areas where people deny the evidence. I strongly suggest that anyone wanting to see the whole picture read the book, at least the last half.
    The outdated fertility replacement rate of 2.1 is also clarified.


        “Biden was right when he said the Chinese hold 8 percent of U.S. treasuries — nearly $1.2 trillion — measured as a percentage of the $14.3 trillion total debt (as of the end of June, the most recent time for which we have figures for foreign holdings of U.S. treasuries). But the total debt includes $4.6 trillion that the federal government owes itself. The most relevant standard for comparison here is the debt held by the public, which was $9.7 trillion. That’s the total amount of Treasury securities owned by banks, pension funds, individuals and others outside the U.S. government. Of the public debt, China owns 12 percent. Overall, foreigners own $4.5 trillion, or about 46 percent, of the public debt, which means Americans own 54 percent of it — substantially less than Biden told his Chinese hosts.”

    • I thought I knew someone who was there but it turns out she didn’t go and was just reposting images from someone who was there. From the photo I saw it didn’t look like there were that many people in attendance (the room wasn’t that big).

  4. you are “talking about Michelle Bachmann and Ron Paul”? you realize that they are both extreme right wingers who want to roll back all 20th century social advances in the US? is this indicative of how American ex-pats in China think? I am an American and am not sure what to make of your ending comment.

    • @bruce

      lol bro, where in there do you see my support for either of those two? And even if i did say Paul and Bachmann 2012 how would that be indicative of anything but my own opinion?

      That last sentence was me saying:

      “I am disgusted with politics and for a long time refused to engage in discussions about that stuff, but now I find myself discussing politics, and even worse, election politics again”.

      Bachmann is a lunatic, Ron Paul less so but neither have much of a chance. The last sentence (italics) is for me the most important …

      • Ron Paul actually has much more of a chance this time around than he ever has. There isn’t a strong GOP candidate and Ron Paul is making sense to a lot of people. You can never find a candidate that embraces all of your ideals but in terms of foreign policy and government intervention I’m all for Ron Paul. The only thing I don’t like is his anti-choice position. And that he’s a creationist. But it seems like Ron Paul is the real-deal ideological game changer that Obama was sold to us as. That is, if he can get into office by beating Obama which is pretty unlikely. Then again, Obama ending up as president was pretty damn unlikely in 2006 also.

        • Not sure I agree with your assessment here … I think a Romney/Bachmann ticket could be attractive to most Republicans and even some Independents. Right now there’s a lot of talk of Rick Perry having jolted the GOP field, but personally I think the ‘jolt’ is temporary. Re Ron Paul, I read a report about him and his campaign a couple of years ago which has stuck in my mind, and it didn’t strike me that the reporter who wrote it was ‘politically motivated.’

        • On the disagreeing: your first two sentences. 1) Don’t think Ron Paul’s chance has been hugely strengthened this time around, Ames straw poll isn’t evidence enough; 2) GOP candidates, Romney, Bachmann, Perry being the front runners, appear to be gaining momentum, i.e., audience and credibility. Disclaimer: I am a registered Independent.

          A technical thing: there’s no ‘reply’ sign/option to your question comment; does the system automatically discourage ‘question after question?’ If so, that’s pretty ‘Chinese’ … 🙂

          • Ron Paul’s chances have been hugely strengthened since the last time around. This is according to Gallup polls published three days ago:

            This is a good editorial which explains what’s happening:

            Most notably:

            “Ron Paul in a close race with Obama and other leading GOP contenders. Is it an anomaly? No, it’s not and it shows clearly how Paul’s message is increasingly resonating with a larger percentage of the American people, making him much less the underdog now than during any of his previous presidential bids.”

            Lastly, there’s no reply option on that particular comment because comment replies only go 5 levels deep. Replies are indented and they can only be indented so far. It’s a layout restriction and has nothing to do with content.

            Thanks for commenting 🙂

        • Ron Paul is making sense? wait until you’re 50 and are looking forward to Social Security and Medicare. and I guess you don’t believe in having a central bank.

          there is a small group of ideologically committed people, mostly younger white males, who don’t believe in government almost at all. Ron Paul represents a philosophy of extreme self-centeredness (“get off my back!”) that has become popular in the US.

          but there’s a reason Ron Paul won’t go to far: he’s anti-imperialist. the Paulites celebrate the rights of the billionaire class more than the billionaire class themselves. but the billionaire class is too invested in the military. and they are too plugged in to reality; they realize that going back to the Gold Standard would be economic disaster.

          scratch a libertarian and you usually find someone who has benefited or is benefiting from govt programs.

          • hmmm… I see Charlie is a Chengdu ex-pat as well. two ex-pats, two libertarians. did I blunder into a libertarian site?

          • … and let me explain to you sometime how Ron Paul and his followers oppose most of the gains of the US civil rights movement. hint: private restaurants, privater housing, private employers etc. are not allowed to discriminate based on race, sex etc. libertarians consider this a transgression into their sacred “property rights”, which were given to us by “Natural Law.”

          • When I’m 50, social security and medicare will have almost certainly collapsed. Maybe you’re waiting for the government to help you out. Suit yourself, but that’s not what I’m doing.

            I don’t think it’s self-centered to not want to give more control and power to people who have proven that they can’t manage it responsibly. If I gamble my life savings and lose, I pay the price of that, but there’s a lack of accountability in the federal government and it leads to them mismanaging everything. I have more faith in markets than government employees.

            To each his own though.

  5. Sascha, first of all, I enjoy this site. I traveled to China in 2003 and 2004 and spent much time both times in Chengdu, where I made many friends. I was part of a delegation from the software industry so it was really a business trip. I loved the people of Chengdu and the food. It is interesting to read the postings on this site, a nice window on a portion of China “on the ground.” the western press usually misreports and misunderstands China.

    As i noted in my comment, I wasn’t sure “what to make” of your comments and ASKED if support for Paul and Bachmann was “indicative” of what ex-pats think. Sorry i did not phrase it more clearly. we have very divisive politics in the US right now.

    while Ron Paul is more intelligent than Bachmann, he is every bit as crazy, and is part of the same destructive movement. Paul believes in returning to the gold standard, does not believe in a central bank (and thus it is not even clear to me if he believes in a central currency — I don’t see how you have a national currency w/o a bank to issue it), wants to privatize all of our social safety net programs and get rid of all govt agencies that regulate clean food, clean air, labor regulations, no minimum wage, etc.

    i had always thought this extreme libertarian ideology was for all practical purposes unique to the US and thus was alarmed that it could be spreading throughout the world.

  6. PS as someone who is aware of Chinese economic and development policy, I believe there is much the US could learn from how China handles these issues. it is foolish to think we have all the answers. while I don’t approve of Chinese policy on human rights and what we in the US call “1st amendment freedoms”, as an economy the growth has been unprecedented and they must be doing something right. there is much to be said for how the Asian economies (not just China) use the state to “facilitate” growth and development while still gaining the dynamism of the private sector.

    i realize that what I wrote above is a gross generalization and anyone actually in China can easily point out all the problems, inefficiencies, lack of development, and so on. but the case remains that there are things the West can learn.

    • I agree. The state in China does make sure things happen and that can be good. but i think the true engine of growth here is desire and ambition. Chinese people WANT IT and that’s I think what sets them apart. the state makes just as many mistakes as anything and a centrally planned economy will always be inefficient (scary to think that China should be growing bigger faster!)

      I think what we could learn above all is the ability to drive on under tough conditions and work hard, save money.

      • Interesting observation on what lies behind China’s growth; having lived in both countries, do you sense the American people (I hesitate to lump any population together but let’s stick to the labeling for the sake of argument) ‘want it’ less than the Chinese? If so, why?

        • We’d have to define It and that’s not easy really. Money could be one definition; A Better Life might also fit, but how could I argue that anyone wants a better life more than someone else?

          I think what I mean here is that Chinese people are almost all motivated by economic gain right now, as perhaps Americans were in the 1950s. Whereas Americans now are not solely motivated by commercial gain.

          Americans have been trying to live better (eat healthier, live in less polluted areas, have high quality cars, homes, food, clothing)for a long time now, while in China these desires are still secondary to wealth generation/accumulation.

          Of course things move so fast in today’s world, so Chinese are already clamoring for safe food, safe trains, safe homes — but as of yet THEY DON’T HAVE THEM because since ’79, the goal has been to get rich, not necessarily “live better” and only now are Chinese realizing that the two do not necessarily go hand in hand.

          Many Americans have realized this, thus a diaspora of creatives from the West coming to China as opposed to Chinese creatives heading to America: Western creatives hope to cash in on the sell-out culture of the East, while introducing new and exciting elements into a society that is starving for such inspiration.

          Simplistic I know, but this is a comment, not a thesis 😉

          Here is an essay that talks about the difference between CA$H-MONEY and BETTER LIVING and according to the author, the West is still locked in the former (money driven) when it should move to the latter (quality driven):

          But I believe China is still a step or three behind the US, so people in China are working whatever jobs they can get, working hard, saving their money and trying to make the most out of any commercial opportunity possible, despite the consequences to the earth/society/individual

          So if we were able to combine the ambitious work ethic that leads to wealth accumulation with the ambitious values that lead to better living, then we might have a match with which to make heaven.

          America and China (Developed and Developing) have a lot to learn from each other and the future depends on us doing so.

        • This is a generalization, but on average Chinese people want it more. I’m from what I consider to be a pretty serious professional environment, Washington DC, where basically everyone is heavily credentialed and works hard to build a career but China is working harder. Not necessarily smarter, but harder. Even in Chengdu which is famous for being laid back.

          There’s much more of a sense of entitlement in the States and in the US everyone has already reached a certain level of comfort that average people in China are still striving towards. They, as a society, have yet to reach that level of living standard. It’s approaching that level in major cities like Chengdu but they have a lot of developing left to do. Economically, socially, culturally etc.

  7. Hi Bruce, let me apologize for sounding snippy 😉 There is no reason for me to be sarcastic to anyone commenting here and I am sorry I was.

    I used to write for — a very libertarian site and we eventually parted because i wasn’t libertarian enough. For me the works of Wendell Berry are really the closest to my philosophy for politics and society: he advocated localization, basically, and also spiritualism in interpersonal relationships. Not Mayan skulls on the dinner table, but God as you see him/her/it as a force within the home and community.

    Another reason why I quit at is because I got sick of politics man. I would get excited about something and then realize that it is all basically a farce. Candide said it best:

    “take care of your own garden”

    and I think that’s pretty much where my politics lie.

  8. Sascha, you did not sound snippy. It is amazing what an “lol” in front of a comment can do! thank you for your responses. i have now subscribed to your feed so look forward to following events in Chengdu.

    your coverage of the anti-Japanese demonstrations last fall far exceeded anything i had seen and was an eye-opener.

    • hi bruce, i am replying to the ron paul stuff above. i dont think Charlie or I endorse or support libertarians per se. Charlie said Ron paul “has a chance” and thats about it. I mentioned Wendell Berry as someone I admire: is he a libertarian?

      I actually do not know enough about libertarianism to even argue lol. I read Garet garretts book, ex-America and that was interesting. The libertarians believe that big government leads to empire and centralized control, which then leads to reduced freedom both home and abroad. I can’t find much of a problem with that logic.

      I have no idea how libertarians view race, social services or the economy really. But i think they appeal to a crowd because no one trusts government anymore. I think people ar esick of getting lied to. And for young males, the social services are considered to be “gone” anyway, by the time we get to retirement age. And we live such different lives. Many of us live off the grid, out of the country … its a very different generation.

      I for one do not support zero social services, nor do i believe that I will receive much in the form of social service when I am 50. I am preparing for old age myself, because I don’t really see the gov’t helping me out.

  9. I did a music gig in Dujiangyan last week with this American singer in his 60s and the crowd joked it was Biden’s brother.

    Sell more fighter planes, broseph.


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