P 300913Z JAN 09
FM AMCONSUL HONG KONG
TO SECSTATE WASHDC PRIORITY 6798
INFO WHITE HOUSE WASHDC
USDOC WASHDC
AMEMBASSY BEIJING 
AMCONSUL SHANGHAI
AMCONSUL GUANGZHOU 
AIT TAIPEI 0185
CDR USPACOM HONOLULU HI

UNCLAS HONG KONG 000195 
 
 
DEPT FOR INR/R/MR, INR/IC/CD, I/FW 
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USPACOM FOR FOR CIS PD ADVISER 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR
SUBJECT: MEDIA REACTION: US ECONOMY; US-CHINA RELATIONS; WORLD 
ECONOMIC FORUM 
 
TOPICS: 
¶1. U.S. economy 
¶2. U.S.-China relations 
¶3. World Economic Forum 
 
HEADLINES AND EXCERPTS: 
 
¶1. U.S. economy 
 
"U.S. administration is trying its best to keep the fierce economic 
bull (NOTE: as in the Chinese Year of the Ox, not a bull market) 
under control" 
 
The center-left Chinese-language Sing Tao Daily News said in an 
editorial (1/30):  "...Even if the House and the Senate eventually 
approve the plan to boost consumer spending and protect jobs, the 
Obama administration still may need to urge the Congress to grant an 
enormous amount of money in order to  stabilize the financial system 
and enterprises.  Merely relying on the USD350 billion approved by 
the Congress earlier has proven to be insufficient to revive the 
vitality of the finance industry.  If the administration sets up a 
'bad debt bank' to buy the bad assets from banks as the outside 
world expects, it may need USD3-4 trillion.  If so, the Obama 
administration will face bigger challenges in the Congress....  At 
present, the U.S. economy is a destructive and fierce bull.  The 
U.S. administration has to take up the role of bull fighter to stop 
the bull from dashing around madly.  The U.S. administration may 
have brilliant moves, but frightening scenarios are also 
inevitable." 
 
¶2. U.S.-China relations 
 
"Obama will not stir up trouble for the sake of rescuing the 
market" 
 
The mass-circulation Chinese-language Apple Daily News remarked in 
an editorial (1/30):  "U.S. Treasury Secretary Geither, in a 
Congressional hearing, criticized the Chinese government for 
manipulating the exchange rate of the yuan.  His remarks have 
aroused public concerns.  People fear that the Obama administration 
may largely adjust the Bush administration's China policy. 
Sino-U.S. relations, especially trade relations, may decline and the 
global economic situation may get worst....  It is unlikely for the 
Obama administration to wage a trade war with the excuse of the 
exchange rate of the yuan, nor does the objective economic situation 
allow the Obama administration to do so.  Different from a decade 
ago, China is now an important market for U.S. products and 
services, and it is also the major creditor nation of the U.S. 
administration, because it possesses hundreds of billions worth of 
U.S. Treasury bonds.  If the U.S. makes use of the excuse of China 
manipulating the exchange rate to impose trade sanctions on Chinese 
products or to launch a trade war, China may stop absorbing U.S. 
bonds.  It may even sell its US-dollar assets, leading to the 
depreciation of the U.S. dollar and the rise of long-term interest 
rates.  Eventually, China, the U.S. and even the whole world will 
lose.  In order to prevent the economic situation from getting worse 
and economic recovery from being postponed indefinitely, the Obama 
administration urgently needs to strive for the cooperation of all 
major economic entities, including China, rather than provoking 
conflict." 
 
"Obama's cross-strait policy will maintain the status quo" 
 
The pro-PRC Chinese-language Macau Daily News remarked in an 
editorial (1/30):  "U.S. Secretary of State Hillary Clinton recently 
talked about the Taiwan issue.  She said that, while respecting the 
One-China Policy, the U.S. needs to continue to support Taiwan's 
efforts to gain more international space.  U.S. Defense Secretary 
Gates also talked about China's 'military threat' in his 
congressional hearings.  The outside world cannot but fear that the 
Obama administration may have changes in its China policy, 
especially its Taiwan policy.  However, due to the common interests 
of both China and the U.S. and the U.S. having to deal with the 
economic issue, it is believed that the Obama administration will 
maintain the status quo in its cross-strait policy." 
 
¶3. World Economic Forum 
 
"Finding the cause of the crisis, rebuilding the economic order" 
 
The pro-PRC Chinese-language Wen Wei Po had this editorial (1/30): 
"...The Chinese and Russian premiers' criticisms about U.S. 
responsibility in the financial tsunami have had the result of 
clarification, which will help the world to correctly understand the 
cause of the financial tsunami.  Wen Jiabao has a thorough analysis 
and a precise conclusion as to the cause of the crisis, which is a 
powerful response to some western politicians' untrue accusations 
about China.  Some western politicians want to shift the public 
focus and to shirk their responsibility, so they place the blame for 
the financial crisis on the high saving rate of emerging countries, 
including China.  This accusation is ridiculous and 
irresponsible....  Facing the most difficult economic situation 
since the Great Depression, countries should follow the principles 
of openness and cooperation, guard against trade protectionism, 
enhance information exchanges and communication, and to enhance 
supervision on the flow of global capital.  Only in this way can the 
crisis be turned into opportunities, and can countries extricate 
themselves from the predicament." 
 
DONOVAN