MEDIA REACTION: IRAN, NORTH KOREA, And U.S. POLICY

UNCLAS SECTION 01 OF 02 BEIJING 001704

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, NORTH KOREA, And U.S. POLICY

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Editorial Quotes
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1. IRAN

"Obama is conflicted concerning Iran"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(06/23): "Obama maintains restraint when
stating his opinion concerning Iran. This restraint reflects that
the Obama administration has a far different political strategy than
the Bush administration. After Iran's election results were
produced, the U.S., to a great extent, has experienced a dilemma.
First of all, the U.S. cannot pick a side. Knowing that commenting
on the election in Iran would not be good; the U.S. can't help but
express both surprise and disappointment. The U.S. is also
conflicted concerning its expectations and the reality. It was
disappointed by the election results; bust must be prepared to deal
with the Iranians in the future. What's more, how will the U.S.
deal with the future Iran? Some American political personnel
pressured Obama to oppose Ahmadinejad's reelection. The Obama
administration has been persuading Israel not to take extreme
measures concerning Iran."


2. NORTH KOREA

a. "It is possible for the U.S. to have good relations with North
Korea"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(06/23): "Obama's recent diplomatic measures
reveal that the U.S. is utilizing a Nixon-style strategic shrinking
policy in North Eastern Asia. However, Nixonism is not only a
strong shrinkage policy but also a soft offending policy.
Historically, by beating the Soviet Union, the U.S. saved itself.
For China, this is a danger and an opportunity. At present North
Korea has made subtle changes to its 'game' in Northeast Asia. The
following will depend on the wit of all involved parties. It is not
impossible that the U.S. could establish good relations with North
Korea. Didn't Nixon establish good relations with China without
giving up Taiwan? Therefore it is quite possible that the U.S. may
establish good relations with North Korea and maintain alliance with
South Korea at the same time. If that happens, China will
experience what the former Soviet Union's felt in 1972. Like Deng
Xiaoping said in 1989 'I thought the Cold War had ended, however I
have been disappointed. Two other Cold Wars have started: one for
the third world countries, the other for socialism."

b. "North Korea says that their supposed statement threatening the
U.S. is ridiculous"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(06/23): "It has been said that a North Korean
missile is targeting Hawaii. The U.S. congressman McCain told China
that UN sanctions were not enough. The most important is for China
to step-in, adding pressure to North Korea.' South Korean media
reported that the U.S. is making efforts to persuade China to
actively participate in the UN Security Council's sanction on North
Korea. The U.S. believes either a 'brick or a carrot' by China will
be crucial to success. North Korean media said the allegation that
North Korea is threatening the U.S. is ridiculous."


3. U.S. POLICY

"The U.S. will bring forward a global standard for financial
regulation; China should selectively learn the bimodal model"

Guangdong 21st Century Publishing Company Ltd.'s business newspaper
21st Century Business Herald (21Shiji Jingji Baodao)(06/23): "Mr.
Liu Shengjun, deputy director of CEIBS Lujiazui International
Finance Research Institute, said the regulation reform program is
not as bold as people expected. The reason for this is that when
Obama submitted this plan to Congress for discussion he had to make
some compromises. There are three defects to Obama's reform plan.
Firstly, there are so many regulatory agencies that need to be
eradicated. Secondly, if the power of the Consumer Financial
Protection Agency is too big, it will affect financial innovation.
Last but not least, the regulation system lacks an incentive
mechanism. Since the market is continuously changing, regulation
agencies must advance with time and keep increasing their regulatory
capabilities. Based on this plan, the position of the U.S. Federal
Reserve has been unprecedentedly expanded. Mr. Sun Lijian, deputy
director of School of Economics, Fudan University, pointed out that
although currently the regulation system appears very strict, it
won't last. Changes in the U.S. economic circle will cause the
changes of the regulation circle. Recession brings high
regulations. However, when the economy is once again prosperous,
relaxed regulation will encourage financial innovation. If the

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U.S. requests that the whole world adopt the same regulation model,
it will be adverse for China. Other countries won't accept this
high-standard regulation model, either. The Europeans welcome the
raised U.S. regulation standard, but if the U.S. requests that
Europe copy this high-standard regulation model, Europe won't be
happy with that."

PICCUTA