VZCZCXRO0589
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4608 3540918
ZNR UUUUU ZZH
R 190918Z DEC 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 1496
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS BEIJING 004608 
 
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: FINANCIAL CRISIS 
 
-------------------- 
  Editorial Quotes 
-------------------- 
 
FINANCIAL CRISIS 
 
a. "The rumors say that China has warned that it will stop lending 
money to the U.S." 
 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao)(12/19): "China has warned that it will stop 
lending money to the U.S. Recently news about the possibility that 
China will stop purchasing American debt, and that China will not 
support the U.S. economy forever, have been spread throughout the 
World. These stories have created a sensation. The fact that China 
is holding American debt has always been a sensitive and complicated 
issue between the two countries. At present, the U.S. is 
experiencing a very sensitive and fragile period, and China is also 
having economic difficulties. Both countries have economic concerns 
and this issue, concerning the U.S. national debt only adds more 
pressure. Chinese experts indicate that China has no other choice 
but to hold a lot of American debt because China has a large amount 
of foreign exchange reserves which don't have other appropriate 
outlets. Most of these reserves are used to invest in U.S. national 
debt.  The financial position of the U.S. in the world has also 
contributed to this situation. Currently, it is not possible that 
China will continue large scale investments in the U.S. China should 
not be the one to pay the bills of the crisis. China is unable to do 
it. However, China will not decrease its purchasing or its selling 
of American debt in the hope that the U.S. will walk away from the 
crisis as soon as possible, reducing the influence of the crisis." 
 
B, "The financial crisis may be a good thing" 
 
The China Radio International sponsored newspaper World News Journal 
(Shijie Xinwenbao)(12/19): "The American financial crisis has fully 
exposed the flaws in the Western economic system.  It also shows 
that the system that the West previously advocated is unreliable. 
This crisis is a lesson for developing countries concerning 
financial operations and rules. Developing countries will have a 
clearer understanding of the subtle operation and rules of U.S. 
financial capital markets. Because of this, they will make an effort 
to promote international cooperation and set up a fair and healthy 
international financial system. What's more, developing countries 
will increase their efforts to set up 'sovereignty funds', seeking 
more independence in finance. The U.S. dollar, as the major 
international reserve and settlement currency, should have the 
necessary transparency and receive strict supervision." 
 
RANDT