MEDIA REACTION: NORTH KOREA, U.S.-CHINA ECONOMIC RELATIONS,

UNCLAS BEIJING 002391 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: NORTH KOREA, U.S.-CHINA ECONOMIC RELATIONS, U.S.-CHINA TRADE RELATIONS -------------- Editorial Quotes -------------- ¶1. NORTH KOREA "North Korea Collapse Theory" can stop (pg 14)" The official Communist Party international news publication Global Times (Huanqiu Shibao)(08/19): "Zhang Qiyun, a professor at Beijing University, said that Western media always focuses on speculating North Korea's collapse. The rumors say that the U.S. has frequently invited China to discuss the aftermath of North Korea's eventual collapse. Repetitive moves by North Korea this year; launching missiles, conducting a nuclear test, voicing challenges, leaders inspecting construction projects etc., are believed to relate to the new leader's succession arrangement. In order to ensure a smooth power transition in North Korea, the current leader has made great efforts to consolidate his successor's authority. Due to these preparations, the chaotic situation in North Korea that western countries expect is unlikely to occur. North Korea, under the possible leadership of Kim Jong-un, will slowly develop, open up and reform their country in order to survive the current international situation. North Korea's policy, in the long term, will combine reliance on China, peace with South Korea, an opened country and a developed economy." ¶2. U.S.-CHINA ECONOMIC RELATIONS "Is it inappropriate to 'sell short-term U.S. bonds while holding long-term bonds'?" Guangdong 21st Century Publishing Company Ltd.'s business newspaper 21st Century Business Herald (21Shiji Jingji Baodao) (08/19):"Analysts believe that 'selling short-term bonds while holding long-term bonds' may not be the best choice. If in the future, the Federal Reserve's benchmark interest rate continues to rise, China can be hardly be expected to maintain its decision to decrease its short-term bond holdings. The economist Lu Zhengwei, said that China's reduced holding of short-term U.S. bonds is a tentative measure taken because of the ups and downs in the U.S. national debt market. It reflects that China anticipations there will be a slight drop in the yield of U.S. bonds. Many analysts indicate that their reduced holding will not be maintained. The ability of U.S. bond holders to avoid risks is further strengthened by the slide in the U.S. stock market. China Academy of Social Science's Zhang Ming said that 'the Chinese and international investors have chosen to increase their holdings of long-term U.S. bonds.' This shows that their faith in the U.S. market has increased. 'Selling long-term bonds and holding short-term bonds' may be an investor's next move." ¶3. U.S.-CHINA TRADE RELATIONS "China may take counter measures concerning the U.S.-China tire industry tariff case" The independent Chinese weekly business newspaper distributed in major cities throughout China, Economic Observer (Jingji Guanchabao)(08/19): "Deng Yali, the Secretary General of the Chinese Rubber Industry, said that the tire tariff case can still be seriously considered. The American Trade Commission feels great pressure and finds it difficult to make a decision. The Chinese Rubber Industry is planning to suggest that the Ministry of Commerce should take counter measures, sanctions, against the U.S. In order to pressure U.S. President Obama, these measures could include increasing import tariffs on products from the U.S., limiting U.S. imports or not allowing any importing. Xu Youming at Hangzhou Zhongce Rubber Company Ltd. indicated that the tire dispute does not only affect the tire industry. Once the U.S. implements tariffs, those tariffs will also concern other aspects of U.S.-China trade. The Chinese lobbying delegation to the U.S. has realized that the U.S. Worker's Union is using this case as a test of the Obama administration's attitude on the issues such as this. The Bush administration denied special protection measures against China. If Obama approves these special protective measures, China will take immediate counter measures. China should reflect on what is wrong with its trade patterns, which rely too much on exports." GOLDBERG