VZCZCXRO6002
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2391 2310910
ZNR UUUUU ZZH
R 190910Z AUG 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 5711
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS BEIJING 002391 
 
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: NORTH KOREA, U.S.-CHINA ECONOMIC RELATIONS, 
U.S.-CHINA TRADE RELATIONS 
 
-------------------- 
  Editorial Quotes 
-------------------- 
 
¶1. NORTH KOREA 
 
"North Korea Collapse Theory" can stop (pg 14)" 
 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao)(08/19): "Zhang Qiyun, a professor at Beijing 
University, said that Western media always focuses on speculating 
North Korea's collapse.  The rumors say that the U.S. has frequently 
invited China to discuss the aftermath of North Korea's eventual 
collapse.  Repetitive moves by North Korea this year; launching 
missiles, conducting a nuclear test, voicing challenges, leaders 
inspecting construction projects etc., are believed to relate to the 
new leader's succession arrangement.  In order to ensure a smooth 
power transition in North Korea, the current leader has made great 
efforts to consolidate his successor's authority.  Due to these 
preparations, the chaotic situation in North Korea that western 
countries expect is unlikely to occur.  North Korea, under the 
possible leadership of Kim Jong-un, will slowly develop, open up and 
reform their country in order to survive the current international 
situation.  North Korea's policy, in the long term, will combine 
reliance on China, peace with South Korea, an opened country and a 
developed economy." 
 
¶2. U.S.-CHINA ECONOMIC RELATIONS 
 
"Is it inappropriate to 'sell short-term U.S. bonds while holding 
long-term bonds'?" 
 
Guangdong 21st Century Publishing Company Ltd.'s business newspaper 
21st Century Business Herald (21Shiji Jingji Baodao) 
(08/19):"Analysts believe that 'selling short-term bonds while 
holding long-term bonds' may not be the best choice.  If in the 
future, the Federal Reserve's benchmark interest rate continues to 
rise, China can be hardly be expected to maintain its decision to 
decrease its short-term bond holdings.  The economist Lu Zhengwei, 
said that China's reduced holding of short-term U.S. bonds is a 
tentative measure taken because of the ups and downs in the U.S. 
national debt market.  It reflects that China anticipations there 
will be a slight drop in the yield of U.S. bonds.  Many analysts 
indicate that their reduced holding will not be maintained. The 
ability of U.S. bond holders to avoid risks is further strengthened 
by the slide in the U.S. stock market.  China Academy of Social 
Science's Zhang Ming said that 'the Chinese and international 
investors have chosen to increase their holdings of long-term U.S. 
bonds.' This shows that their faith in the U.S. market has 
increased.  'Selling long-term bonds and holding short-term bonds' 
may be an investor's next move." 
 
¶3. U.S.-CHINA TRADE RELATIONS 
 
"China may take counter measures concerning the U.S.-China tire 
industry tariff case" 
 
The independent Chinese weekly business newspaper distributed in 
major cities throughout China, Economic Observer (Jingji 
Guanchabao)(08/19): "Deng Yali, the Secretary General of the Chinese 
Rubber Industry, said that the tire tariff case can still be 
seriously considered.  The American Trade Commission feels great 
pressure and finds it difficult to make a decision.  The Chinese 
Rubber Industry is planning to suggest that the Ministry of Commerce 
should take counter measures, sanctions, against the U.S. In order 
to pressure U.S. President Obama, these measures could include 
increasing import tariffs on products from the U.S., limiting U.S. 
imports or not allowing any importing.  Xu Youming at Hangzhou 
Zhongce Rubber Company Ltd. indicated that the tire dispute does not 
only affect the tire industry. Once the U.S. implements tariffs, 
those tariffs will also concern other aspects of U.S.-China trade. 
The Chinese lobbying delegation to the U.S. has realized that the 
U.S. Worker's Union is using this case as a test of the Obama 
administration's attitude on the issues such as this.  The Bush 
administration denied special protection measures against China.  If 
Obama approves these special protective measures, China will take 
immediate counter measures.  China should reflect on what is wrong 
with its trade patterns, which rely too much on exports." 
 
GOLDBERG