2011-07-25 13:29

US Secretary of State Hilary Clinton (R) listens to US Consul General Stephen Young upon arriving in Hong Kong July 24, 2011. [Photo/Agencies]

HONG KONG - US Secretary of State Hillary Clinton will urge Asia to embrace "open, free, transparent and fair" global trade rules in a speech on Monday overshadowed by fears of a catastrophic US debt default.

"The speech reflects her growing emphasis on economics and economic power in foreign policy," one US official said ahead of Clinton's speech at about 12 pm (0400 GMT).

Clinton's speech is aimed at stressing that the United States will remain a "resident economic power" in Asia despite mounting fears over both the short- and long-term state of US finances.

US lawmakers failed to achieve a budget breakthrough on Sunday with scant sign of a deal to raise the government's debt ceiling and head off a default in nine days that could trigger global economic calamity and downgrade America's Triple-A credit rating.

After weeks of rancorous talks, both sides appeared further apart than ever on a broad deficit reduction deal that would clear the way for Congress to raise the $14.3 trillion debt ceiling.

Clinton was expected to urge Asian governments to do more to boost local consumer demand, and to take a new look at policies ranging from intellectual property rights to support for state enterprises at the expense of private entrepreneurs.

US officials said China was clearly concerned about the US debt impasse and had repeatedly urged Washington to get its economic house in order.

"They've basically said that they've made a substantial investment in the United States and that they expect - not hope, expect - the United States will abide by its various financial and international commitments. Full stop," a third US official said.

Clinton's visit to Hong Kong, the first by a US secretary of state since the city's return to homeland in 1997, comes at the end of a round-the-world trip during which China was often at the top of the agenda.

Clinton will head to the southern Chinese economic boomtown of Shenzhen later on Monday for a meeting with Chinese State Councillor Dai Bingguo that is expected to touch on a number of issues.

Both Washington and Beijing have signaled they want to keep ties on track ahead of a series of major international meetings including the East Asia Summit in November.