MEDIA REACTION: IRAN, U.S. ECONOMICS, U.S.-CHINA MILITARY

UNCLAS BEIJING 001677 DEPARTMENT FOR INR/R/MR, EAP/CM, EAP/PA, EAP/PD, C HQ PACOM FOR PUBLIC DIPLOMACY ADVISOR (J007) SIPDIS E.O. 12958: N/A TAGS: OPRC KMDR CH PREL ECON SUBJECT: MEDIA REACTION: IRAN, U.S. ECONOMICS, U.S.-CHINA MILITARY RELATIONS -------------- Editorial Quotes -------------- ¶1. IRAN "Five days in Tehran - The protests will have a hard time influencing Ahmadinejad" The Shanghai-based Shanghai Media Group (SMG) publication, China Business News (Diyi Caijing)(06/19): "If the protests expand further, Mousavi's support for the protests is not wise. It is a confrontation with the highest leaders of the country. Although the current Iranian administration agreed to recount the disputed ballots many observers think the result of the election cannot be changed. If the current administration suppresses the protests by force it will trigger much anger from the public and it is obvious that Ahmadinejad does not want to see that either. Iran has begun diverting attention by accusing other countries of interfering in their election. They protest that the statement issued by American officials has interfered in Iran's domestic politics. The U.S. State Department denied this accusation." ¶2. U.S. ECONOMICS "The new financial prescription by Obama to reign in big financial actors and help the weak groups" Guangdong 21st Century Publishing Company Ltd.'s business newspaper 21st Century Business Herald (21Shiji Jingji Baodao)(06/19): "On June 17th, Obama administration officially submitted the proposal of financial supervision reform to the Congress. This is the first time for the U.S. government to officially mention how to deal with the Government Sponsored Enterprise (GSE) in the future. However, this proposal doesn't clarify the road map of GSE reform. It only points out 6 feasible methods. This reform plan aims at preventing system risks and protecting consumers. In this proposal, there is no final judgment on many important areas of supervision. It will take quite a time for the Congress to approve this proposal and many difficulties will be confronted. From this proposal, we could see that the financial actors on the Wall Street are too big and make the government fear they will break down, which will cause uncontrollable panic in the market. Nevertheless, when Obama emphasizes the supervision agencies should take another responsibility, which is to judge the necessary crisis moments and provide assistance to financial actors, it actually stimulates banks to expand the scale of their assets. If the content of the proposal is realized, senior banking officials, investors and stakeholders will be very happy and think that there is no need to be afraid of a financial crisis any more since the government will always pay the bill. Thus, they will all aim at generating short-term profits. This will further weaken the self-control and risk management of the shareholders. Another concept in this proposal is to protect the interests of ordinary consumers. The rise in the default rate is the fuse of this financial crisis. The reason for it is consumers have nothing to do when they are cheated. One important request from the future supervision agencies is banks must provide enough and clear information of products to customers." ¶3. U.S.-CHINA MILITARY RELATIONS "Secretary of Defense Gates says the U.S. has enough naval and air force resources to fight against China" Elite Reference (Qingnian Cankao),a newspaper affiliated to the official Communist Youth League China Youth Daily (06/19): "Recently many Chinese websites reported that an American Lieutenant General Bruce Wright commented in Japan that Chinese air force modernization has made good progress and U.S. fighters are incapable of invading Chinese air space. However this general retired last April, so why did he receive an interview at a U.S. base in Japan? The U.S. Air Force in the western Pacific is not that weak. A Hong Kong website that broke the news and it was quoted by many mainland websites. Currently the Korean peninsula is very tense, thus any move of the U.S. military will arouse attention. Besides, the U.S. intentionally devalued its military power, which meets many people's appetites. The U.S. military in fact uses 'raptor' and 'stealth' fighters to deter the Asia-Pacific region. As an American expert indicated, at least for the next four or five years, the U.S. has enough naval and air power to maintain its leadership in the Pacific and the air space above it." PICCUTA