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Clinton Confident Congress and President Will Reach Debt Deal


Chinese State Councilor Dai Bingguo, right, and U.S. Secretary of State Hillary Rodham Clinton shake hands prior to their meetings at Kylin Villa in Shenzhen, China, Monday, July 25, 2011. (AP Photo/Saul Loeb, Pool)

U.S. Secretary of State Hillary Clinton urged China to restrain North Korea from provocative acts, and discussed with Chinese State Councilor Dai Bingguo the next steps toward ending Pyongyang's nuclear programs, if talks this week between U.S. and North Korean diplomats make progress.

Clinton met with Dai Monday in the southern Chinese city of Shenzhen, the last stop on her Asia trip.

A senior State Department official described the talks as productive, and says Chinese officials made clear they intend to weigh in very strongly on North Korea and gave a clear impression that Beijing is unhappy with North Korea's behavior.

Pyongyang abandoned talks on ending its nuclear weapons programs in 2008, and last year was blamed for a torpedo attack on a South Korean ship that killed more than 40 sailors. It also shelled a South Korean island, killing four people.

Beijing is the impoverished North Korea's main ally and source of food and oil. Its leaders have made several visits to China in the past year.

During the meeting, Dai expressed China's displeasure with President Obama's meeting this month the Dalai Lama, and its concerns over U.S. arms sales to Taiwan. The State Department official describes the comments as a careful presentation, and not rancorous.

Beijing considers the self-governed Taiwan to be its territory, and accuses the Dalai Lama of trying to create an independent Tibet.

Clinton and Dai also discussed China's internal politics as well as the debate in Washington over raising the government debt limit. The Chinese government has urged the United States to resolve the issue and avoid unsettling world markets. Beijing is the largest foreign holder of U.S. Treasury securities.

Earlier in the day Clinton gave a speech in Hong Kong, seeking to reassure Asian investors that American legislators will come up with a deal to prevent the country from defaulting on its financial obligations.

Clinton said she is "confident" the Congress will work with President Barack Obama on a plan to improve the country's long-term fiscal outlook.

Congressional leaders had hoped to announce a deal before the opening of Asian markets Monday but seemed as far apart as ever. Most Asian markets closed down less than 1 percent while gold hit a record high and the U.S. dollar fell against the yen.

The administration calculates it will not be able to pay its bills after August 2 unless Congress raises its current limit on government borrowing. The Republican Party demands deep spending cuts before the limit is raised, while Democrats argue there should also be new sources of revenue.

Before her address, Clinton met with Hong Kong Chief Executive Donald Tsang. She traveled to Hong Kong from Bali, Indonesia, where she attended the annual ASEAN Regional Forum. Shortly after her meeting in Shenzhen, she began her flight back to the United States.

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