VZCZCXRO9515
RR RUEHCN RUEHGH
DE RUEHBJ #0342/01 0400848
ZNR UUUUU ZZH
R 090848Z FEB 10
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 8038
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 BEIJING 000342 
 
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 SENV KGHG KMDR OPRC CH
 
SUBJECT: MEDIA REACTION: CAPITALIST DEVELOPMENT, RMB EXCHANGE RATE, 
U.S. POLICY 
 
-------------------- 
  Editorial Quotes 
-------------------- 
 
¶1. CAPITALIST DEVELOPMENT 
 
"Reflection on capitalism in the international financial crisis" 
 
The official Communist Party People's Daily (Renmin Ribao) 
(02/09)(pg 23): "The outbreak of the international financial crisis 
urged many people to reexamine the capitalist's development 
direction.  In the post-crisis era, capitalist society is bound to 
undergo some new changes.  Yoshinobu Onishi, Chairman of Mitsubishi 
UFJ Research and Consulting Co. Ltd, a major Japanese think tank, 
said that Japan is also concerned with the prospect of the U.S. 
dollar. It is still uncertain when where the world's major funding 
is heading will change. Only if the market and the government each 
play a balanced role, will the society soundly develop.  The United 
States represents neo-liberalism, which means that they overly rely 
on the market and curbing the government's role.  Obama won the 
election, indicating that the American people also recognize the 
danger of liberal economy.  After taking office, Obama emphasized 
social security and the introduction of a medical insurance system, 
which is also an amendment to excessive neo-liberalism.  Francis 
Fukuyama, author of 'The End of History and the Last Man,' said that 
after one year of Obama's presidency the post-crisis world hasn't 
significantly changed.  Economic recovery has come too fast, which 
means that the crisis is not serious enough to make the United 
States look for long-term resolutions.  From a global perspective, 
the economic crisis has brought a few high lights: although the 
international financial system's legitimacy was questioned, the 
system did not collapse.  China, India and other countries did not 
abandon their open market policies, which will help the two emerging 
economies grow rapidly.  Another positive consequence of the crisis 
is that the role of the Group of 20 becomes better than the Group of 
¶8.  This new mechanism enables China, India, Brazil and other 
emerging countries to have a voice. From a long-term point of view, 
the issue of American ideology is even more important than the issue 
of economy.  The Americans have become very rigid now and the way 
they look at the world is based on strong ideological bias.  The 
financial crisis may make the Americans change [reevaluate] certain 
prejudices, but overall, their mindset will remain the same, which 
will cause them great trouble.  Unless there is a change on this 
issue, otherwise, the lessons learned in this crisis will be 
wasted." 
 
¶2. RMB EXCHANGE RATE 
 
"Calmly dealing with the RMB exchange rate game" 
 
The People's Daily-sponsored and internationally-focused commercial 
news publication Global Times (Huanqiu Shibao) (02/09)(pg 14): "If 
the U.S. Department of Finance calls China an 'exchange rate 
manipulator' in its semi-annual report, once negotiations with China 
fail, a trade war between the U.S. and China will be triggered.  If 
arms sales to Taiwan are like light machine guns firing, the RMB 
exchange rate is more like heavy bombs because it is related to 
employment and the lives of the people, a substantial livelihood 
issue.  China will be harmed, as if its arm is fractured, if the RMB 
exchange issue is not well dealt with. Despite some divergences 
within China, at least there is one common view: the principle of 
initiative, controllability and the gradual nature, pursued by China 
on the issue, should not be changed in the short term.  We should 
also make an effort to distinguish what are America's test moves and 
what are their real intentions.  The United States should be clear 
that any policy related to the RMB exchange rate must be consistent 
with the pace of development, but not dominated by the U.S.'s club. 
If a larger scale trade war is triggered, the U.S. will also not 
benefit.  Currently, calmness is needed for both countries.  China 
should tease out China's interest structure and sequence, prioritize 
them and make a full preparation for competition with the United 
States." 
 
¶3. U.S. POLICY 
 
"The U.S. has three strategies for maneuvering troops globally" 
 
Elite Reference (Qingnian Cankao), a newspaper affiliated to the 
official Communist Youth League China Youth Daily (02/09) (pg 06): 
"A Lieutenant-General of the U.S. Joint Chiefs of Staff recently 
said at a hearing at the House of Representatives that the U.S. has 
prepared three combat strategies.  The strategies were directly 
targeted at the top three hot areas: the Korean peninsula, the 
Taiwan Strait, and the Persian Gulf - taking North Korea, China, and 
Iran as the assumed enemies.  From a number of contents exposed by 
military media, one can see the clues as to how the U.S. military 
will deploy forces to deal with the three 'focus areas.'  First, the 
U.S. military will use mechanized infantry division to contain North 
 
BEIJING 00000342  002 OF 002 
 
 
Korea army's attack.  As to the possible military conflict on the 
Korean peninsula or on the Taiwan Strait, U.S. troops in the West 
Pacific have quite detailed deployments. The U.S. military's pacific 
headquarter will revise combat plans against China and North Korea 
every two years.  Once any incidents occur in any of these two 
areas, the U.S. military will come from three directions, Japan, 
Guam Island and the U.S.'s west coast, for military support. 
Meanwhile, in the Persian Gulf, the U.S. military has started long 
before to build military base in the east and west sides of Iran, 
aiming to contain Iran." 
 
HUNTSMAN