VZCZCXRO8505
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0896/01 0930757
ZNR UUUUU ZZH
R 030757Z APR 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 3258
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 BEIJING 000896 
 
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: G-20, U.S.-Russia relations, U.S. dollar 
 
-------------------- 
  Editorial Quotes 
-------------------- 
¶1. G-20 
a. "The outcomes of the G-20 are beyond all expectations" 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao) (04/03): Many agreements were reached in 
London.  The global stock markets consequently rose.  Senior 
journalist Ding Gang from People's Daily says: "there is no obvious 
leader at this meeting.  Compared with other international meetings, 
this summit has never integrated so many voices and interests.  This 
is sure the dawn of the new world order." 
China was seen as a highlight of the G-20 before and during the 
London summit.  Yuan Peng, from China Institute of Contemporary 
International Relations, thinks that China's role in the world has 
become more outstanding in this summit and China's international 
influence increased as well.  But China is facing pressures from 
many aspects. American wants China to follow its steps instead of 
challenging the status of USD in such an early stage.  In the field 
of financial system reform, both emerging countries and the EU have 
similar views as China does. But they also worry that U.S. will 
attract the world's attention in the future international stage. 
As for whether or not G-20 can cure the wounds of the world, 
analysts say that under the great expectations of getting rid of the 
global financial crisis, the outcome of G-20 may not satisfy 
everyone.  The attention on this summit is much higher than the 
attention paid to the UN conference.  Ma Zhengang, from China 
Institute of International Studies, indicates that the pattern of 
the G-20 provides an efficient mechanism for solving the future 
critical global issues.  He thinks that G-20 may be more efficient 
than UN in handling some specific issues. 
¶2. U.S.-Russia Relations 
"China should watch out for the "warming" of U.S.-Russia relations" 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao) (04/03):  Obama's willingness to improve 
America's relations with some countries still remains at the stage 
of expressing ideas.  But for U.S.-Russia relations, Obama has 
already taken a series of actions.  Any move on U.S.-Russia 
relations may influence China's strategic interests and 
international status.  Meanwhile the triangular relations among 
these three countries affect the stability and direction of the 
structure of international relations. So we should treat this matter 
carefully. 
In order to show that he is not the only one hoping to keep close 
with Russia, Obama mobilized influential former Senators and 
officials of both Parties to conduct friendly diplomatic activities 
towards Russia.  He also selected a good time to do these movements. 
 First he shows his friendliness to the newly elected Russian 
President to improve the U.S-Russian relations, which on the other 
hand will help the new Russian President to gain more political 
respect.  Second, the foundation for China-Russia mutual strategy 
becomes less stable.  Since the ease of relations with Taiwan and 
America's acknowledging of Russia's "legal" existence in the 
Eurasian region, the urgency of China-Russia strategic cooperation 
may decrease.  Third, the trust between China and Russia has not 
been established.  "China is a threat" still has its proponents in 
Russia. A closer U.S.-Russia relationship can widen the distance in 
China-Russia relations.  Lastly, U.S. and Russia need time to 
recover their strategic powers. These two countries have both 
seriously hurt by the current global financial crisis. 
It is no doubt that the improvements of U.S.-Russia relations will 
result in a restructure of the world status. China's rapid emergence 
breaks America's concept of unilateral dominance.  So some 
strategists start to praise the "G-2".  In fact, the "G-2" does not 
exist and U.S. does not want to see this either.  U.S. prefers to 
balance China's international influence by using U.S.-Russia 
relations. The current situation is very similar to the situation 
back in the 1970s, the U.S. hasn't changed, but modern China becomes 
the "Soviet Union" and modern Russia becomes "China". Therefore, 
China needs to carefully observe whether there are tacit agreements 
between Russia and the U.S. in their China policies.  Moreover, 
America's "soft power" is reflected in many fields, including 
international energy, culture diversity, and the Eurasian regions. 
However, in the fields of USD hegemonic status and power over the 
sea, U.S. still wants to be dominant.  Therefore, the competitions 
between U.S. and China in the future may become hotter. 
¶3. U.S. dollar 
"The balancing mechanism when the U.S. dollar is unstable" 
21 Century Business Herald (21 Shiji Jingji Baodao) is under 
Guangdong 21 century publishing company Ltd. (04/03): U.S. must 
lower its ratio of liabilities through inflation.  It is doubted 
that the European countries, including Germany and France, dare to 
adopt ultra currency measures and ignore the risk of inflation.  The 
Federal Reserve buying treasury bonds is like an addiction to drugs. 
 One thing that is certain is the U.S. debt rate can only be reduced 
by high inflation.  All the U.S. policies are surrounded by debt. If 
there is inflation due to the USD devaluation, the external wealth 
of other countries will be taken away because U.S. is the biggest 
debtor.  If the external savings ratio and wealth drop, in fact, 
 
BEIJING 00000896  002 OF 002 
 
 
America's rate of debt is safe and American assets gain its support, 
as well as the inflation is restrained. This is such a perfect 
self-balancing mechanism. 
 
PICCUTA