P 230956Z MAR 09
FM AMCONSUL HONG KONG
TO SECSTATE WASHDC PRIORITY 7218
INFO WHITE HOUSE WASHDC
USDOC WASHDC
AMEMBASSY BEIJING 
AMCONSUL SHANGHAI
AMCONSUL GUANGZHOU 
AIT TAIPEI 0238
CDR USPACOM HONOLULU HI

UNCLAS HONG KONG 000543 
 
 
DEPT FOR INR/R/MR, INR/IC/CD, I/FW 
DEPT FOR EAP/PD, EAP/CM, EAP/P 
DEPT FOR VOA/BRF, TV-WPA 
WHITE HOUSE FOR NSC 
PRC POSTS FOR PA 
AIT 
USPACOM FOR FOR CIS PD ADVISER 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR
SUBJECT: MEDIA REACTION: U.S. ECONOMY; U.S.-China SEA SPAT 
 
TOPICS: 
¶1. U.S. economy 
¶2. U.S.-China sea spat 
 
HEADLINES AND EXCERPTS: 
 
¶1. U.S. economy 
 
"How he handles the toxic assets tests Obama's determination" 
 
The independent Chinese-language Hong Kong Economic Journal said in 
an editorial (3/23):  "Since the Obama administration took office, 
it has showed a tough style.  It is firm in fixing the financial 
market.  However, almost three months have passed, and it has 
accomplished basically nothing....  The Obama administration has 
introduced many measures to deal with the economic crisis, ranging 
from saving financial institutions, helping property owners, and 
helping small and big enterprises secure credit, to stimulating 
consumer credit and carrying out stress tests for banks and other 
economic stimulus plans, etc.  But all these plans are just spinning 
and do not deal directly with the cause of the financial crisis - 
the toxic assets of banks.  As long as this problem is not dealt 
with, there is no hope of ending the financial crisis.  The Wall 
Street Journal said that removing toxic assets may offer a good 
opportunity for the Obama cabinet to deal fix the financial system. 
It can also show the U.S. administration's determination to solve 
the financial crisis completely.  The only danger is that if the 
move of the Congress rescuing AIG turns into a scandal of public 
money falling into pockets of AIG's executives, it will make it more 
difficult for the administration's request to the Congress to 
approve grants in the future." 
 
"Obama's golden hundred days are the key to saving the economy" 
 
The independent Chinese-language Hong Kong Economic Times commented 
in an editorial (3/23):  "The U.S. administration may announce 
details about buying banks' 'toxic assets' as early as today. 
President Obama has adopted strong measures in the past few days, 
hoping to rescue the financial market and the economy in his first 
100-days honeymoon period of popularity.  He wants the public to 
continue having confidence in him.  Otherwise, if his popularity 
rapidly declines after the honeymoon period, it will be more 
difficult for him to rescue the U.S....  After the 100 days, the 
U.S. economy will continue to get worse.  It will take a favorable 
turn next year, at the earliest.  This will certainly lead to the 
decline of Obama's popularity.  The worse the economy gets, the 
angrier the public will be.  This 'accidental incident' will hurt 
the popularity of the administration more.  In the past week, the 
AIG bonus incident has already made Treasury Secretary Geithner 
miserable.  There are calls for him to step down.  Such accidental 
incidents will only be more severe in the future.  Obama's success 
or failure will depend on whether he can introduce the most potent 
measures to rescue the financial market and the economy and bring 
hope to the U.S. economy in the first 100 days and slow down the 
decline of his popularity." 
 
"Stop greediness to save the crisis, Obama should not stop at just 
putting on a show" 
 
The pro-PRC Chinese-language Wen Wei Po had this editorial (3/23): 
"...Regarding the shameless AIG executives, Obama strongly 
criticized them and announced that the annual salaries of financial 
institutions' executives who received government funding should not 
be over US$500,000.  The Congress also quickly passed the bill to 
levy 90 percent tax on bonuses.  However, these measures are just a 
slow move to stop AIG's greediness.  They did not help solve the AIG 
crisis.  They seem to be putting on a show to win public opinion. 
Obama should see that resolving the financial crisis is his biggest 
responsibility.  Obama should order AIG and Wall Street executives 
who caused the financial crisis to return their bonuses.  In 
addition, these executives should not get away with using excuses. 
Because only these 'talented people' who caused the disaster can be 
able to crack these complicated underlying assets and solved the 
existing problems and help AIG and other financial institutions to 
get out of the crisis." 
 
"Greediness leads to the AIG crisis; Washington should be denounced 
for burying its head in the sand" 
 
The independent Chinese-language Ming Pao Daily News had an 
editorial (3/22):  "...It has been half a year since the financial 
tsunami broke out.  It is very clear who the chief culprit is.  The 
whole financial system including the regulatory system should be 
held largely responsible.  From beginning to end, they have buried 
their heads in the sand.  The U.S. administration is negligent in 
its regulatory role.  The financial institutions practiced deception 
and claimed they had performed their responsibilities.  The AIG 
bonus crisis shows the underlying recklessness that exists despite 
the financial tsunami.  If people do not recognize the ethical 
causes of the financial tsunami and set up a powerful regulatory 
system, when the economy recovers from the financial tsunami and the 
financial industry becomes 'God's favored one' again, the bad 
practices strongly criticized by people now may end up causing 
trouble again." 
 
"Wall Street should mull over the bonus crisis" 
 
The pro-PRC Chinese-language Macau Daily News remarked in an 
editorial (3/22):  "...American people are unhappy with the huge 
bonuses of AIG but AIG has to fulfill its contract.  Standing in the 
middle, the Obama administration is like walking on thin ice.  If it 
makes a little mistake, the public anger will be turned against 
them.  Actually, many U.S. newspapers have strongly criticized the 
Obama administration for interfering too late.  Some people are even 
urging Treasury Secretary Geithner to resign.  Obama therefore 
needed to make strong criticisms and vow to deal with the crisis on 
television.  This is crisis communications.  Obama wants to show 
that at this moment he is with the public and the AIG crisis is not 
his administration's fault.  In this crisis, AIG seems to be the 
scapegoat.  But it is not exactly a scapegoat because it is one of 
the troublemakers of the crisis.  The AIG crisis gets bigger and 
bigger, not only because of the political struggle between the 
Congress and the White House.  It also shows that the American 
public utterly detests Wall Street.  Wall street should think about 
it carefully." 
 
¶2. U.S.-China sea spat 
 
"No need for U.S. ships to ruffle the diplomatic seas" 
 
The independent English-language South China Morning Post said in an 
editorial (3/22):  "A U.S. scientific vessel on its way to the South 
China Sea and Taiwan Strait has caused controversy among green 
groups and may be in danger of sparking a diplomatic incident with 
China.  The marine survey vessel Marcus G. Langseth - operated by 
Columbia University's Lamont-Doherty Earth Observatory - has 
impeccable scientific credentials.  There is no doubt the survey it 
has planned to conduct off Taiwan and the southern mainland are 
genuine and scientifically valid.  But by planning to operate within 
China's exclusive economic zone, apparently without approval, it 
risks being unnecessarily provocative at this sensitive time.  The 
confrontation this month between a U.S. Navy surveillance ship and 
several Chinese vessels in the economic zone caused a spat between 
Beijing and Washington.  Those responsible for the Langseth should 
take steps to secure Beijing's consent to ensure that no problems 
arise....  As a matter of good diplomacy, the U.S. researchers 
should also work with green groups to explain their research and 
allay concerns.  Instead of courting controversy, the Langseth 
should use this as an opportunity to promote diplomatic and 
scientific understanding." 
 
DONOVAN