VZCZCXRO8131
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1464/01 1530924
ZNR UUUUU ZZH
R 020924Z JUN 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 4250
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 BEIJING 001464 
 
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 PREL ECON
 
SUBJECT: MEDIA REACTION: GEITHNER VISIT, NORTH KOREA, U.S.-CHINA 
RELATIONS 
 
-------------------- 
  Editorial Quotes 
-------------------- 
 
¶1. GEITHNER VISIT 
 
a. "Geithner explains the prospects of the fiscal deficit; while 
speaking, he made a concerted effort to speak in Chinese" 
 
The Shanghai-based Shanghai Media Group (SMG) publication, China 
Business News (Diyi Caijing)(06/02): "An expert suggests that 
Geithner's visit is to convince China not to sell its U.S. T-bills. 
His goal is not to ask China to purchase more bonds, but to hold 
their existing bonds.  If China were to sell the bonds that it 
currently holds, the interest rate on the existing bonds will rise. 
The U.S. could not take this rise. 
 
In the future there are two ways for the U.S. to retain their money, 
first they could find another economic growth model, such as the 
1990s boom of the internet, or second, they could continue to print 
more notes.  Geithner's visit has had a larger meaning of hoping 
China will not sell American bonds. 
 
During Geithner's Peking University speech, he mentioned that the 
Sino-U.S. Strategic and Economic Dialogue will begin in July.  A 
Peking University expert expressed that U.S.-China relations have 
changed.  In the current crisis, the U.S. believes that China has 
more favorite conditions to walk out of the crisis than the U.S. 
Other experts indicate that Geithner's visit has hard tasks to 
fulfill. 
 
Though ensuring China the safety of U.S.-dollar assets, the 
weakening trend of U.S. dollars has shown the increasing yield of 
U.S. bonds.  The direct cause of the recent fall of American bonds 
is the U.S. is issuing a large amount of new bonds and the market's 
concerns about inflation caused by the Federal Reserve's relaxed 
currency policy.  China is the biggest creditor of the U.S., if the 
U.S. dollar continues to depreciate, China will become the biggest 
victim.  Facing a larger pressure to issue bonds, Geithner's visit 
to sell bonds seems more urgent.  China is happy to hear his promise 
of the safety of U.S. bond assets, but promises can't always be 
fulfilled." 
 
b. "U.S. Treasury Secretary tells China not to worry" 
 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao)(06/02): "On June 1st, U.S. Secretary of the 
Treasury began his visit to China in Beijing. For American trade 
protectionists, Geithner's omission of the RMB exchange rate issue 
is disappointing.  What he did discuss was the continued power of 
the U.S. and China's continued purchase of T-bills.  87% of 
netizens, when polled, expressed worry over the American bonds that 
China holds.  Geithner's earlier comment about setting up U.S.-China 
relations similar to those of the U.S. and the G-7, has also aroused 
broad concern.  It shows Obama finally has treated China as an equal 
partner. 
 
Geithner did not mention the human rights issue and RMB exchange 
rate issue on his visit, which was carefully planned.  Like Pelosi 
and Hillary, who did not mention the topics either, Geithner now 
advocates enhancing cooperation and minimizing divergences.  But it 
doesn't mean that the U.S.-China negotiation will also have such a 
relaxed and comfortable environment.  In a real negotiation, the 
U.S. and China will both bring forward requests.  It is possible 
that Geithner's visit will make it possible to build up a new system 
between the two countries." 
 
¶2. NORTH KOREA 
 
"North Korea's logic when developing nuclear weapons" 
 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao)(06/02): "Even if the UN Security Council 
passes a new sanctions resolution, the DPRK will not change their 
strategic determination to develop nuclear weapons.  North Korea 
develops nuclear weapons for domestic political reasons as well as 
to build up their defense capabilities.  Because of the war in Iraq, 
the whole world is facing serious threats from the U.S.  How can the 
world feel safe?  Remembering its own experience of developing 
nuclear weapons to fight against suppression, China can understand 
the logic of other countries hoping to walk the similar road.  The 
nuclear proliferation in China's history, helped by Soviet Union, 
finally has led the improvement of foreign relations in the east. 
Though the era has changed, if China advocates non-proliferation in 
North Korea it may create a moral problem. 
 
Non-proliferation of nuclear programs is not always the most 
important interest of the U.S.  When more sincere challenges arise 
 
BEIJING 00001464  002 OF 002 
 
 
than non-proliferation, the U.S. will compromise on it, even give it 
up to contain China.  China's ability is limited, unable to protect 
the world's security, especially when the U.S. requests China to be 
responsible and meanwhile it is not quite responsible for China. 
Though North Korea's coercively developing nuclear weapons have 
impacted on the regional situation, finally the world will think 
about developing normal relations with the country (North Korea) who 
has developed nuclear weapons." 
 
¶3. U.S.-CHINA RELATIONS 
 
"Washington needs to hear more voices from ordinary Chinese people" 
 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao)(06/02): "Looking at the frequent visits to 
China by America Senior Leaders, many people have discovered that 
the old way of 'U.S. pressures on China and China passively reacts 
to it' has changed. This time, Secretary Geithner is hoping to gain 
China's support through promises instead of pressure and warnings. 
Based on the comparative strength of the U.S. and China, if the U.S. 
needs China's cooperation and support, the U.S. must first 
understand China and listen to China's requests.  The U.S. officials 
start to look at China at an equal basis.  Washington gradually 
realized the increasing influence of ordinary people's opinion. 
U.S. senior official's coming to China not only means having more 
dialogue with Chinese officials, but also means listening more 
opinions of Chinese ordinary people.  To listen to their requests 
has been especially emphasized on the issue of China purchasing 
American bonds.  Many netizens have brought forward their requests 
directly to Geithner on the internet: maintaining the stability of 
the U.S. dollar, relaxing high-tech export restrictions on China, 
ensuring China's investment security in the U.S., admitting China's 
position as marketing economy and cancelling trade protectionism 
measures aimed at China." 
 
PICCUTA