MEDIA REACTION: CHINESE MILITARY, FINANCIAL CRISIS, U.S.

UNCLAS BEIJING 000764

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

SUBJECT: MEDIA REACTION: CHINESE MILITARY, FINANCIAL CRISIS, U.S.
POLITICS

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Editorial Quotes
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1. CHINESE MILITARY

"China's naval strategy needs an adjustment"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(03/24): "For the past month China's water
territory has been frequently disturbed. The U.S. Navy's Impeccable
invaded the South China Sea to conduct illegal activities. 2009 is
the year that the world's water territory will be redefined. Many
conflicts can be expected in this rearrangement. Therefore, all the
countries around the world are searching for legal loop holes and
space where they can reoccupy their own water territory. The
neighboring countries of China intend to legitimize their occupation
of China's water territory: both Japan and the Philippines intend to
pull the U.S. over to interfere in the Diaoyu Island and Nansha
Islands issue. China should be firm in that their sovereignty rights
are the bottom line. China has a 3 million square km water
territory. China should establish a specific 'China sea territory
bureau' to prevent the area from being seriously invaded. Although
the Mainland and Taiwan have disputes, the two should join together
to defend China's water territory. China should also increase its
efforts in resources exploration and development. Along with China's
development, trade at sea and their marine channels are closely
related with China's strategy."


2. FINANCIAL CRISIS

a. "The Rise of Wall Street has not changed"

21 Century Business Herald (21Shiji Jingji Baodao) under Guangdong
21 century publishing company Ltd. (03/24): "Injecting public funds
into Wall Street hasn't brought any power over Wall Street to the
U.S. public and government. The public and government should have
the right to distribute Wall Street profits. This is a question of
the balance between public investment and return. In the case of
AIG bonuses, their power has not been realized. Either the U.S.
government should allow Wall Street to go bankrupt, as a message
sent from the House of Representatives, or the public, government
and congress should come to terms with the fact that Wall Street
isn't what it used to be. It will take great patience to see
whether the money will rebound and the government will be paid back
in five to ten years."

b. "Last resort increases economic jitters"

The official English-language newspaper China Daily (03/24): "A
patient whose life hangs by a thread might be treated with heavy
doses of medication. The U.S. Federal reserve has resorted to this
treatment to address the country's recession. In a last resort the
FED will print new money to the tune of U.S. $ 1 trillion. There is
a clear cost to massive quantitative easing. If another trillion
dollars is pumped into the money supply, the value of the dollar
will fall. A lower U.S. dollar will make China's exports, which
have already been shrinking, less competitive. China is the world's
largest foreign holder of U.S. Treasuries. The U.S. dollar is
strong and the U.S. economy - especially it's manufacturing and
advanced service sectors - are the largest and most sophisticated in
the world. Thanks to a combination of a strong taxation system and
the role of the FED as the U.S.' last resort dollar lender, the U.S.
government will always honor its debt commitments."


3. U.S. POLITICS

"American's doubts about Obama increase"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(03/24): "Currently, there are a lot of issues
that are interconnected. This is challenging for the Obama
administration. Obama was elected during the financial crisis.
However, the complexity of the U.S. economic crisis and the politics
that surround it has outpaced Obama's ambition. The high rate of
support that Obama receives burdens him. Obama's leadership faces a
challenge. During this financial crisis, tough determination is
required. Obama should be united with his allies and reform in a way
that will meet more of the people's interests."

PICCUTA