Identifier
Created
Classification
Origin
09BEIJING896
2009-04-03 07:57:00
UNCLASSIFIED
Embassy Beijing
Cable title:  

MEDIA REACTION: G-20, U.S.-Russia relations, U.S. dollar

Tags:  OPRC KMDR CH 
pdf how-to read a cable
VZCZCXRO8505
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0896/01 0930757
ZNR UUUUU ZZH
R 030757Z APR 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 3258
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 02 BEIJING 000896 

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: G-20, U.S.-Russia relations, U.S. dollar

--------------------
Editorial Quotes
--------------------
UNCLAS SECTION 01 OF 02 BEIJING 000896

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: G-20, U.S.-Russia relations, U.S. dollar

--------------
Editorial Quotes
--------------

1. G-20
a. "The outcomes of the G-20 are beyond all expectations"
The official Communist Party international news publication Global
Times (Huanqiu Shibao) (04/03): Many agreements were reached in
London. The global stock markets consequently rose. Senior
journalist Ding Gang from People's Daily says: "there is no obvious
leader at this meeting. Compared with other international meetings,
this summit has never integrated so many voices and interests. This
is sure the dawn of the new world order."
China was seen as a highlight of the G-20 before and during the
London summit. Yuan Peng, from China Institute of Contemporary
International Relations, thinks that China's role in the world has
become more outstanding in this summit and China's international
influence increased as well. But China is facing pressures from
many aspects. American wants China to follow its steps instead of
challenging the status of USD in such an early stage. In the field
of financial system reform, both emerging countries and the EU have
similar views as China does. But they also worry that U.S. will
attract the world's attention in the future international stage.
As for whether or not G-20 can cure the wounds of the world,
analysts say that under the great expectations of getting rid of the
global financial crisis, the outcome of G-20 may not satisfy
everyone. The attention on this summit is much higher than the
attention paid to the UN conference. Ma Zhengang, from China
Institute of International Studies, indicates that the pattern of
the G-20 provides an efficient mechanism for solving the future
critical global issues. He thinks that G-20 may be more efficient
than UN in handling some specific issues.

2. U.S.-Russia Relations
"China should watch out for the "warming" of U.S.-Russia relations"
The official Communist Party international news publication Global
Times (Huanqiu Shibao) (04/03): Obama's willingness to improve
America's relations with some countries still remains at the stage
of expressing ideas. But for U.S.-Russia relations, Obama has
already taken a series of actions. Any move on U.S.-Russia
relations may influence China's strategic interests and
international status. Meanwhile the triangular relations among

these three countries affect the stability and direction of the
structure of international relations. So we should treat this matter
carefully.
In order to show that he is not the only one hoping to keep close
with Russia, Obama mobilized influential former Senators and
officials of both Parties to conduct friendly diplomatic activities
towards Russia. He also selected a good time to do these movements.
First he shows his friendliness to the newly elected Russian
President to improve the U.S-Russian relations, which on the other
hand will help the new Russian President to gain more political
respect. Second, the foundation for China-Russia mutual strategy
becomes less stable. Since the ease of relations with Taiwan and
America's acknowledging of Russia's "legal" existence in the
Eurasian region, the urgency of China-Russia strategic cooperation
may decrease. Third, the trust between China and Russia has not
been established. "China is a threat" still has its proponents in
Russia. A closer U.S.-Russia relationship can widen the distance in
China-Russia relations. Lastly, U.S. and Russia need time to
recover their strategic powers. These two countries have both
seriously hurt by the current global financial crisis.
It is no doubt that the improvements of U.S.-Russia relations will
result in a restructure of the world status. China's rapid emergence
breaks America's concept of unilateral dominance. So some
strategists start to praise the "G-2". In fact, the "G-2" does not
exist and U.S. does not want to see this either. U.S. prefers to
balance China's international influence by using U.S.-Russia
relations. The current situation is very similar to the situation
back in the 1970s, the U.S. hasn't changed, but modern China becomes
the "Soviet Union" and modern Russia becomes "China". Therefore,
China needs to carefully observe whether there are tacit agreements
between Russia and the U.S. in their China policies. Moreover,
America's "soft power" is reflected in many fields, including
international energy, culture diversity, and the Eurasian regions.
However, in the fields of USD hegemonic status and power over the
sea, U.S. still wants to be dominant. Therefore, the competitions
between U.S. and China in the future may become hotter.

3. U.S. dollar
"The balancing mechanism when the U.S. dollar is unstable"
21 Century Business Herald (21 Shiji Jingji Baodao) is under
Guangdong 21 century publishing company Ltd. (04/03): U.S. must
lower its ratio of liabilities through inflation. It is doubted
that the European countries, including Germany and France, dare to
adopt ultra currency measures and ignore the risk of inflation. The
Federal Reserve buying treasury bonds is like an addiction to drugs.
One thing that is certain is the U.S. debt rate can only be reduced
by high inflation. All the U.S. policies are surrounded by debt. If
there is inflation due to the USD devaluation, the external wealth
of other countries will be taken away because U.S. is the biggest
debtor. If the external savings ratio and wealth drop, in fact,

BEIJING 00000896 002 OF 002


America's rate of debt is safe and American assets gain its support,
as well as the inflation is restrained. This is such a perfect
self-balancing mechanism.

PICCUTA