VZCZCXYZ0005
RR RUEHWEB

DE RUEHIN #0328/01 0820918
ZNR UUUUU ZZH
R 230918Z MAR 09
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 1188
INFO RUEHBJ/AMEMBASSY BEIJING 9034
RUEHHK/AMCONSUL HONG KONG 0485

UNCLAS AIT TAIPEI 000328 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - NIDA EMMONS 
DEPARTMENT PASS AIT/WASHINGTON 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: U.S.-CHINA NAVAL CONFRONTATION, U.S. 
ECONOMIC SITUATION 
 
¶1. Summary:  Taiwan's major Chinese-language dailies focused March 
21-23 news coverage on cross-Strait relations and Taiwan's bid to 
become an observer in the World Health Assembly in May; on Taiwan's 
economic situation; and on the controversy caused by the alleged 
anti-Taiwan remarks by a Toronto-based Government Information Office 
official.  In terms of editorials and commentaries, a column in the 
conservative, pro-unification, English-language "China Post" 
discussed the recent naval confrontation between the United States 
and China in the South China Sea.  The article said "the best option 
open to Washington is to weaken the leadership role of the PRC, 
whose PLA Navy is posing a threat to the security of the ASEAN 
countries."  A separate "China Post" editorial criticized the way 
the Obama administration is handling the financial storm.  The 
article said "Obama's top economic team is not up to the job of 
steering America out of this mess. They've failed to engineer a 
bailout plan with performance guidelines and provisions for 
transparency."  End summary. 
 
¶2. U.S.-China Naval Confrontation 
 
"The Truth about the South China Sea" 
 
Columnist Joe Hung wrote in the conservative, pro-unification, 
English-language "China Post" [circulation: 30,000] (3/23): 
 
"... What's behind this incident in the South China Sea?  One thing 
is certain: The incident occurred because the U.S. is gathering 
information on the new thrust of China's naval power to its 'first 
island chain,' which includes Taiwan and all the small archipelagoes 
in the South China Sea, under whose waters are rich oil reserves. 
The People's Liberation Army (PLA) is boosting its first island 
chain defense to back up its leading role in an emerging Asian free 
trade zone.  The PLA Navy is setting up China's largest submarine 
base on Hainan Island and planning to build an aircraft carrier. It 
is developing a blue-water navy. Intelligence gathering in the South 
China Sea is a must for the U.S. Navy. As a matter of fact, the U.S. 
had surveyed the waters around Taiwan exhaustively again not long 
before the Impeccable met with the hostile Chinese boats. ... 
 
"Obama needs a rapport with the PRC, particularly at a time Chinese 
help is needed to cope with the global economic crisis, triggered by 
the U.S. financial meltdown. The U.S. is bitterly offended because 
it is excluded from the Asian free trade sphere -- the 
ASEAN-plus-One scheduled to come into being on next January 1, and 
the ASEAN-plus-Three by 2015 (the zone includes all ten members of 
the Association of Southeast Asian Nations (ASEAN) and the PRC, 
known also as the Ten-plus-One. The other two in the 
ASEAN-plus-Three are Japan and South Korea).  As the situation now 
stands, the best option open to Washington is to weaken the 
leadership role of the PRC, whose PLA Navy is posing a threat to the 
security of the ASEAN countries. If Manila seeks U.S., all other 
ASEAN member states, Vietnam and Indonesia in particular, will 
follow suit. The U. S. may revive a SEATO (Southeast Asian Treaty 
Organization) and reestablish its strong military presence, which 
contributes in no small measure to the defense of vital U.S. 
economic interests in the region.  What started as a test of Obama's 
future China policy led up to the sea incident by accident, which is 
being followed up by the U.S. initiative to reassert its leadership 
role in Southeast Asia." 
 
¶3. U.S. Economic Situation 
 
"A+ for Rhetoric, D+ for Execution" 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (3/21): 
 
"The global financial storm sweeping the world is inflicting heavy 
casualties on developed and developing countries alike.  The United 
States, in particular, has been hit hard by a double whammy of 
financial pinch and political wrangling. President Barack Obama is 
facing a political Katrina of his own.  The hurricane is cutting 
short his political honeymoon, and here's why: Seat of the pants 
governance.  AIG has received US$173 billion in bailout funds since 
last September when Hank Paulson, George Bush's treasury secretary, 
insisted on 'unconditional' rescue of many bankrupt financial 
institutions with a US$800 billion rescue fund called Troubled 
Assets Rescue Package (TARP). Since then, however, the U.S. 
government's pay-now-ask-later attitude has made it painfully clear 
that there is no plan. ...  What message is Obama's administration 
sending to the U.S. public?  With February's unemployment rate 
hitting 8.1% and banks still as unwilling to lend as when this 
crisis started, it's obvious that the economy is still in the ICU. 
Up to this point, Americans have seen a lot of their tax dollars 
spent with little tangible results, except to directly fill the 
wallets of a few executives. 
 
"Americans would probably respect the Obama team a bit more if it 
 
owned up to the fact that it was inept in handling the recovery 
plan.  Instead, Obama defended Mr. Geithner as 'making all the right 
moves in terms of playing a bad hand' and made AIG the scapegoat for 
its 'recklessness and greed.'  He vowed to 'pursue every single 
legal avenue to block those bonuses,' which are but empty words. 
It's quite alarming that the Obama administration is still tiptoeing 
around the core issue. Liddy and Geithner, had they had the will and 
aptitude to do so, could have placed usage conditions on taxpayer 
money.  For example, without government funding, AIG would have gone 
under.  Under bankruptcy law, can executives sue for missed 
compensation? Don't be silly.  Once AIG received government money it 
was an end to business as usual. First class passengers should not 
expect champagne and a warm towel after their plane goes down and 
they're all floating on a life raft.  The truth seems plenty clear. 
Obama's top economic team is not up to the job of steering America 
out of this mess.  They've failed to engineer a bailout plan with 
performance guidelines and provisions for transparency. ... 
 
"A man of charisma with gifted oratory abilities, President Obama 
should stop believing that hopeful rhetoric alone will get the job 
done. Five and a half million Americans are unemployed. The Fed, if 
it keeps pumping money into the economy in a hopeless effort to 
grease lending, runs the risk of stoking stagflation, a scary 
scenario of inflation without growth. Obama is expected by many of 
his countrymen to be a 21st century F.D.R. by restoring America's 
greatness from the ruins wrought by his predecessor. He still has a 
chance to become a great American president. So far, however, his 
performance is disappointing and the euphoria is evaporating. It's 
trite to say every crisis is an opportunity, but now is the moment 
for him to tackle the crisis with toughness." 
 
YOUNG