MEDIA REACTION: CHINA'S CURRENCY, U.S.-CHINA TRADE

UNCLAS BEIJING 002453 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: PREL ECON KMDR OPRC CH SUBJECT: MEDIA REACTION: CHINA'S CURRENCY, U.S.-CHINA TRADE RELATIONS, BRIBERY CASE -------------- Editorial Quotes -------------- ¶1. CHINA'S CURRENCY "We should not be rash about RMB internationalization" (pg 14) The official Communist Party international news publication Global Times (Huanqiu Shibao)(08/26): "A signal that China is becoming a truly powerful country will be when the world starts to purchase and deposit China's currency, the RMB. The financial crisis has made China realize the danger of maintaining its wealth in U.S. dollars. Internationalization of the RMB is connected to China's strength; however, this will be a long process and we cannot be rash about it. The RMB's reputation has yet to be established. People in countries neighboring China are willing to trade in RMB, but are unwilling to hold deposits in RMB. The RMB must first be widely used in countries neighboring China; only then can it be internationalized. The financial crisis seems to have given China an opportunity to move forward with plans to internationalize the RMB. However, in reality the situation is less optimistic. China must have a long-term strategic plan, prepare for various risks, and adjust its plans in a timely manner according to realistic trade and tourism circumstances." ¶2. U.S.-CHINA TRADE RELATIONS "China's possible 'revenge list' against the U.S. does not comply with an optimized and continuous game" (pg 2) Guangdong 21st Century Publishing Company's business newspaper 21st Century Business Herald (21 Shiji Jingji Baodao) (08/26): "Some Chinese officials are concerned that President Obama may give in to political pressure and decide to take protective measures against Chinese tire products. Some scholars have suggested creating a 'revenge list' of U.S.-China trade products as a way to deal with the situation. In fact, China has avoided taking radical measures to deal with other countries' protectionist policies aimed at correcting the unbalanced role of China in international trade. As a major exporter, China will be harmed more than importing countries if large-scale protectionist measures are adopted. A country's negotiating ability determines what kind of foreign trade policy it can choose. If a country has enough domestic demand, it will not be pressured during trade negotiations by countries it exports to. For China, the best long-term solution is to cultivate domestic demand, rather than to create a 'revenge list,' which will only be effective in the short term and will cause more harm than good." ¶3. BRIBERY CASE "What does the CCI case mean?" (pg A13) The Shanghai-based Shanghai Media Group (SMG) publication, China Business News (Diyi Caijing)(08/25): "The Control Component Inc. (CCI)(a U.S. company) case does not target China, but rather U.S. companies' corrupt behavior overseas. Chinese companies should not feel disgruntled by the Justice Department's handling of the case, but rather should take the opportunity to investigate possible bribery in China. A company's behavior and an individual's behavior should be taken separately. Taking bribes is normally the behavior of an individual. When stressing that their companies did not accept bribes, the Chinese companies affected by this case should be aware that certain individuals may have been involved in bribery. These companies should therefore be cautious in their positions and statements on the issue. International judicial cooperation should also be stepped up. This will enhance China's ability to crack down on corruption. The CCI case has in fact provided a good opportunity for cooperation." HUNTSMAN