Mr Biden made the comments during a political fundraiser in Utah, and it was originally taken to China's economic challenges. He said Beijing was burdened by slowed economic growth, an ageing workforce and high unemployment - although misstated several facts about China's economy.
“China is in trouble. China was growing at 8 per cent a year to maintain growth – and now closer to 2 per cent a year,” he said on Thursday night.
“When bad folks have problems, they do bad things.”
The remarks from Mr Biden come amid recent efforts at rapprochement between Washington and Beijing.
Mr Biden also slammed China's Belt and Road Initiative as a “debt and noose agreement”, which leaves developing countries involved in the programme laden with debt.
“He's referring to internal tensions inside China that could very well have an effect on the way they interact with the world,” National Security Council spokesman John Kirby told reporters
“And one of the ways they interact with the world that is a concern to us … is the way they bully and coerce and intimidate countries around the world.
“A lot of countries, particularly in Africa are beginning to realise that that kind of association is a mistake for them.”
During his remarks on Thursday night, Mr Biden also misstated that the number of people who are of retirement age is larger than the number of people of working age.
Although Mr Biden misquoted China's economic growth, recent data suggests that there are cause for concerns.
Data from Beijing's National Bureau of Statistics showed that China's economy grew 4.5 per cent in the first quarter and 6.3 per cent in the second. Its gross domestic product grew by only 0.8 per cent quarter-on-quarter.
Its economy has also entered deflation territory, in contrast with inflation in the US and other nations. China reported a 0.3 per cent drop in consumer prices this week, its first decline since February 2021.
China's unemployment rate currently sits at 5.3 per cent, compared to 3.5 per cent in the US. Its youth unemployment rate is also far higher, with more than one in five people aged 16-24 unemployed.
Mr Biden's remarks evoked memories of when he equated Chinese President Xi Jinping with “dictators” days after Secretary of State Antony Blinken's visit to Beijing. China condemned the remark as an “open political provocation”.
The US President earlier this week moved to restrict investments in China's technology sector, which remains a point of tension between the two countries.
“I don’t want to hurt China,” Mr Biden said. He added that he was seeking a “rational relationship” with America's economic rival.
Several high-ranking officials in Mr Biden's administration have visited China in recent months to thaw tension.
Beijing has not yet publicly commented on Mr Biden's latest remarks.