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

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