VZCZCXRO1712
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2895 2890905
ZNR UUUUU ZZH
R 160905Z OCT 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 6468
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS BEIJING 002895 
 
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: PREL ECON KMDR OPRC CH
 
SUBJECT: MEDIA REACTION: SECDEF VISIT TO CHINA, EXCHANGE RATE 
MANIPULATION, CARBON TAX 
 
-------------------- 
  Editorial Quotes 
-------------------- 
 
¶1.  SECDEF VISIT TO CHINA 
 
"U.S. Secretary of Defense will pay a quick visit to Asia-Pacific 
region" 
 
The official Communist Party international news publication Global 
Times (Huanqiu Shibao)(10/16)(pg 8): "Experts said that the quick 
visit of the U.S. Secretary of Defense to the Asia-Pacific region 
and his quick return to the U.S. to meet with Xu Caihou, Vice 
Chairman of China's Central Military Committee, show that the 
Asia-Pacific region has become a focus of the United States' global 
strategy.  Military expert Dai Xu said he believes that Gates' visit 
is not a routine official visit, but instead is intended to 
emphasize the urgency of military affairs in the region.  Dai argued 
that Gates' visit is also related to recent changes in the East 
Asian situation.  Gates' visit will test the new Japanese 
government's military and diplomatic red lines and make adjustment 
to U.S. policy on Japan accordingly.  The U.S. may send a warning to 
Japan over its attempt to weaken the bilateral military alliance." 
 
¶2.  EXCHANGE RATE MANIPULATION 
 
"Who is manipulating exchange rates?" 
 
Guangdong 21st Century Publishing Company Ltd.'s business newspaper 
21st Century Business Herald (21Shiji Jingji Baodao) (10/16)(pg 2): 
"Since the U.S. dollar was first floated, its value has always been 
decided by political and financial considerations.  The United 
States is in fact the real manipulator of exchange rates.  Exchange 
rates are now being used by governments to achieve political 
purposes, and their function has gone far beyond regulating 
international balance of payments.  If the U.S. wants to challenge 
China over currency manipulation, it needs to first explain why the 
timing of the increases and decreases in the price of the U.S. 
dollar has been so clever?  After all, the U.S.'s key strategy is to 
use yuan appreciation as a weapon to force China into making 
concessions on the opening of its financial markets.  A currency war 
has already been started." 
 
¶3.  CARBON TAX 
 
"Can China bear the burden of a carbon tax?" 
 
The Shanghai-based Shanghai Media Group (SMG) publication, China 
Business News (Diyi Caijing)(10/16)(pg A2): "The Ministry of Finance 
of China indicated in a report that China's economic growth has 
slowed down due to the impact of the international financial crisis 
on China's macroeconomic situation, which will cause a delay in the 
collection of a carbon tax.  If a carbon tax is collected, the 
worst-case GDP loss predicted will be less than 0.5%.  It is thought 
that the collection of a carbon tax will drive growth in the economy 
of Eastern China, but in Central and Western China, where the 
economy depends on high energy consumption but low efficiency in 
production, the government should adopt different tax collection 
policies.  Cai Fang, Director of Population Studies at the China 
Academy of Social Sciences, argued that the development of a 
low-carbon economy is conditional.  China's current GDP per capita 
is low at USD 3,000.  At the same time, China is in a stage of rapid 
economic development.  China currently does not have green 
technologies.  The implementation of emission reduction measures 
will not automatically create jobs.  If China wants to minimize job 
losses and at the same time reduce emissions to enter the 
'double-dividend club,' it needs to establish a mechanism to do so 
and change the existing economic development model." 
 
 
HUNTSMAN