MEDIA REACTION: GOOGLE, TAIWAN, FINANCIAL CRISIS

UNCLAS SECTION 01 OF 02 BEIJING 000086 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 SENV KGHG KMDR OPRC CH SUBJECT: MEDIA REACTION: GOOGLE, TAIWAN, FINANCIAL CRISIS -------------- Editorial Quotes -------------- ¶1. GOOGLE a. "Google's global strategy will experience a severe setback if it withdraws from the China market" The official popular newspaper Beijing Youth Daily (Beijing Qingnianbao)(3/14)(pg B9): " Over the past four years, and under the leadership of its CEO, Dr. Kai-fu Lee, it has not been easy for Google to increase its market share. Statistics show that Google's income in the China market was 2.27 billion yuan in 2009, not a large market share of the China market. Xie Wen, an Internet expert, said that the damage to China's Internet industry would be heavy if Google withdraws. This is not a victory for China's Internet. China needs to retain companies like Google. Yesterday, Xiang Li a telecom Internet expert said that this was only Google's attempt at a psychological war. Without China, the Internet industry and the world will lose a huge market. Losing the China market would be a big blow to Google's global strategy. In the long term, there will be larger problems concerning its mobile phones, their operation systems and other relevant services." b. "U.S. elections a factor behind the Google incident" Guangdong 21st Century Publishing Company Ltd.'s business newspaper 21st Century Business Herald (21Shiji Jingji Baodao)(01/14)(pg 3): "Zhao Jin, deputy director at Tsinghua University's China-U.S. Relations Research Center, believes that Google's withdrawal is ' for political reasons.' The skilled use of network warfare has always been a skill of Obama's team and one of its 'soft strategies.' Following the trade war and arms sales to Taiwan, this may be the third weapon that the United States uses against China in ¶2010. This year's mid-term elections and the 2012 presidential elections are the source of all the oscillations in China-U.S. relations. However, in the context of the two great powers' confrontation, Google may become a victim. The upcoming China-U.S. human rights dialogue is about to open and Google's exit may make this dialogue a 'needle-to-head battle' (a very serious battle). According to Reuters, Secretary Clinton has had a banquet with many senior managers of science and technology companies. Next week she will address the public about Internet freedom. Zhao also said Google may become a negotiation chip for the U.S., which the U.S. will use in exchange for its other interests in China. The sweetness of the 2009 Sino-U.S. honeymoon still lingers, however in 2010 the bugle call for a match has already been sounded. Such a quick change reflects what Secretary Clinton called on when she took office; the U.S.' needs for 'smart power.' Sino-U.S. relations may become the victims as a result of the Obama administration's efforts to protect its political interests and safeguard the Democrats' political domain." ¶2. TAIWAN "Let the U.S. know the pain of arms sales to Taiwan" The official Xinhua News Agency international news publication International Herald Leader (Guoji Xianqu Daobao)(01/14)(pg 20): "Luo Yuan, Deputy Secretary-General of the Military Science Society, and member of the CPPCC (Chinese People's Political Consultative Conference) National Committee, said that we have to make a high-profile outreach to advocate the U.S.-threat-theory in opposite to the China-threat-theory. We have to increase military spending to accelerate the development of high-tech weapons, which is entirely forced by the United States and Taiwan. We are not afraid of the U.S. not wanting to cooperate with us. On the Taiwan issue, the United States has been insatiable, and has mistaken China's patience for weakness. Now it is time to expose and count the U.S. violation behaviors. In fact, China has quite a few cards in hand for either conducting soft countermeasures or tough countermeasures against the United States. In the era of globalization, if the United States does not 'shine,' the world 'shines.' In Sino-U.S. relations, the U.S. is the 'buyer' and China is 'the seller,' which means the U.S. has more demands from China than China does from the U.S. In many fields, China knows well a number of the U.S.'s weaknesses. The United States is a pragmatic country; it will not do anything against itself. Well, we will now kick the ball over to their side. The responsibility of non-cooperation should be borne by the United States. This is called a strategic game." ¶3. FINANCIAL CRISIS "2010 world economic outlook: independent growth is key to recovery" The official Communist Party People's Daily (Renmin Ribao)(01/14)(pg 23): "Su Jingxiang, a researcher at the China Institutes of BEIJING 00000086 002 OF 002 Contemporary International Relations, said the U.S., Western European and Japanese economies are still facing many challenges, which will determine that world economic growth in 2010 will be slow and fragile. It is very likely that a new major crisis will occur. Some authorities believe that in the second half of 2010, with interest rates increasing, the declining effects of the fiscal stimulus plans, plus the end of inventory adjustment, that the world will be in a more sluggish recovery. Asian economies will maintain a relatively rapid growth and continue the world's overall economic trend which is 'the east overgrows the west.' Li Xiangyang, the Director of the Institute of World Economics & Politics at the Chinese Academy of Social Sciences (CASS),argues that the biggest risk to the world economy in 2010 will be timing the stimulus exit strategies correctly. A premature withdrawal would mean the collapse of the economic recovery process and an undo of the effect of the economic stimulus policies. Withdrawing too late could lead to a series of financial market turbulences. In the international scope, there has been broad consensus that 're-balancing,' is a prerequisite for sustainable growth in the post-crisis era of global economy. Being affected by this opinion, more and more groups in developed countries which support trade protectionism, will focus on the emerging market economies; particularly those in the East Asian region including China. Li also said that the G20's international influence has grown larger than that of the G8. The G20 means coordination, cooperation and progress. The journey for the development of the G20 mechanism has begun." HUNTSMAN