Cablegate: Media Reaction: U.S. President-Elect Obama and China;

P 100902Z NOV 08



E.O. 12958: N/A

1. U.S. president-elect Obama and China
2. Financial tsunami
3. U.S. presidential election


1. U.S. president-elect Obama and China

"China has to be high on the Obama agenda"

The independent English-language South China Morning Post commented
in an editorial (11/10): "U.S. president-elect Barack Obama has
been gradually responding to the congratulatory messages from
overseas leaders. He would appear to be getting back to foreign
counterparts in the order of importance he perceives their countries
to be to his international policy agenda. On Thursday, he made
phone calls to Australia, Britain, Canada, France, Germany, Israel,
Japan, Mexico and South Korea and on Friday to Egypt, Italy,
Pakistan, Poland, Saudi Arabia and Spain. Surprisingly, despite the
significance of China to the U.S. and the world, the conversation
with President Hu Jintao came only on Saturday, the same day as a
call to Russia's head of state.... Mr. Hu rightly told the senator
the two nations should accommodate each other's concerns. Senator
Obama reportedly said that strong Sino-U.S. ties were good for the
world. The leaders would seem to have got their relationship off on
a sound footing. It is important that the president-elect now sets
aside what was said in the heat of electioneering and work closely
with his counterpart to nurture and build ties beneficial to both
sides and the world."

"China and the U.S. should enhance cooperation to resolve the
financial crisis"

The working-class Chinese-language Sing Pao Daily News wrote in an
editorial (11/10): "Chinese President Hu Jintao had a telephone
conversation with Obama, the U.S. President-elect. Apart from
congratulating him, Hu also discussed with Obama the development of
Sino-U.S. relations and the strategy to deal with the financial
tsunami.... Now, the global economy is in a predicament. The
impacts of the financial tsunami have not yet ended. Western
politicians who have a vision understand that China can play an
important role in assisting the U.S. to overcome this
once-in-a-century financial crisis. Chinese leaders know that the
financial crisis has gravely affected worldwide economic development
and people's livelihood. China is willing to lay down forceful
measures with other countries to avoid a global economic recession."

2. Financial tsunami

"Obama should introduce an 'extra large' bailout plan"

The mass-circulation Chinese-language Apple Daily News remarked in
an editorial (11/10): "...Facing such a grim economic situation,
Obama had a meeting with several heavy-weight economic consultants
last Friday. After the meeting, he pledged that he would adopt
contingency measures, including a second-round U.S.$170 billion
economic stimulus package, to stimulate the economy after taking
office. He would also use part of the U.S.$700 billion bailout plan
to assist industries other than the financial industry, especially
the auto industry, to avoid the closure of the three car-making
giants which may lead to tens of thousands of workers losing their
jobs. Details of Obama's U.S.$170 billion economic stimulus plan
are not yet known. However, judging from the flagging U.S. economy,
the second round economic stimulus plan is not only necessary, but
the scale of the plan must also be increased in order to avoid a too
quick and too deep economic recession.... The election of Obama
reminds the American people that it may take a long time to boost
the economy. Since the economic recovery takes time, Obama should
seize the opportunity to introduce an 'extra large' scale economic
stimulus package after taking office so as to reduce the 'pain' of
the economic recession."

"Obama can deliver on a fairer financial framework"

The independent English-language South China Morning Post said in an
editorial (11/9): "No one is more aware than U.S. president-elect
Barack Obama of the need for him to hit the ground running. Despite
the overwhelming support he enjoys at home and abroad, Senator Obama
realizes he has no time to enjoy a honeymoon amid the global
financial crisis. One reason people are hopeful is that he is seen
as a leader who can build an international consensus and serve as a
catalyst in helping to contain the economic meltdown. In a
globalized economy, a crisis of this kind requires global
co-operation. Senator Obama has made it clear he understands that
the economic crisis is the most urgent challenge confronting him by
convening his top economic advisers for his first policy meeting
after his election victory on Tuesday. He sent out an unmistakable
message when he lined them up behind him at his first post-election
news conference and vowed to act "swiftly" to confront the crisis
head-on as soon as he took office.... Senator Obama's team should
work with summit participants to set in motion agreements that can
be obtained farther down the road. A Bretton Woods 2 that produces
a fairer, more stable and efficient global framework is possible in
Barack Obama's first term."

"U.S. economic policy is not yet known; stocks will have ups and

The center-left Chinese-language Sing Tao Daily News commented in an
editorial (11/9): "The U.S. presidential election has just
finished. The jubilation of the investment market also came to an
end. Media focus now returns to the economy. Global stock markets
plunged again. Though Obama has not yet taken office, he
immediately tried to keep public expectations under control. He
anticipated that the U.S. problem could not be resolved in one term.
If Obama is right, he is indirectly saying that global investment
prospects will be dim in the next two to three years. If this
situation really comes true, even though Obama will not step down
halfway, he may not be re-elected.... If Obama only focuses on the
idea of evening-up wealth distribution and if he relies on
increasing taxes to solve problems, it will further undermine
investors' confidence. And it will not be surprising that the
economic recession cannot be resolved within one term. On the
contrary, if Obama can effectively adjust the huge U.S. resource
base, it is believed that the time needed to alter the unfavorable
situation can be largely shortened. However, there will at least be
a period of uncertainty between laying down an economic policy and
putting it into practice. Before the market receives any
information about the polices of the new administration, the stock
market will feel uneasy. It may have ups and downs. Thus,
investors must get psychologically prepared for the roller-coaster

"Obama will face challenges"

The pro-PRC Chinese-language Macau Daily News remarked in an
editorial (11/9): "The U.S. presidential election is over. America
will welcome the 'Obama era.' Obama has been elected when the U.S.
is facing economic difficulties internally and is involved in two
wars externally. People around the world are generally concerned
about whether Obama can form his cabinet smoothly, turn his campaign
platform into feasible domestic and foreign policies, and lead the
U.S. out of its predicament to open up a new future for the U.S....
Due to the domestic and external situation of the U.S., boosting the
national economy and safeguarding national security are the two
major tasks for Obama, which will become the core of his domestic
and foreign policies."

3. U.S. presidential election

"The gargantuan task"

The independent English-language South China Morning Post's foreign
editor, Peter Kammerer, wrote in the 'Insight' page (11/7): "So
those of us who plumped for Barack Obama to be the man have had our
day. Life is indeed sweet, we are patting one another on the back
and basking in the fact that George W., Dick and that lot will soon
be out of the White House. In their place will be a man of purpose,
understanding, intelligence, charisma and, yes, color. But, before
we get too carried away in our belief that he is going to solve all
our problems, let's face a few truths. The world is in a mess,
thanks largely to outgoing President George W. Bush and his cohorts.
Not for seven decades has there been such financial turmoil; years
will pass before there is a recovery. Instability abounds: Pakistan
is on the verge of implosion and Afghanistan and Iraq are far from
the stability that was promised with the US invasions. Al-Qaeda and
its terrorist friends remain primed for mayhem. North Korea still
has nuclear weapons and Iran seems likely to get them no matter
what. A deepening rift has been opened with Russia, and China
remains distrustful of American intentions.... America's electing
its first black president has immeasurable worth for the cause of
non-whites the world over. In Senator Obama, ethnic groups sense
that racial equality has dawned. He must capitalize on this gain to
get his country and the world working together again."

"Waiting Obama to create a miracle by his new policies"

The mass-circulation Chinese-language Apple Daily News remarked in
an editorial (11/7): "...While the American people and indeed the
whole world are waiting for Obama's leadership in fighting the
financial tsunami, can Obama respond quickly in his personnel
arrangements, in adjusting policies, and in responding quickly to
domestic and foreign issues so as to maintain the public confidence?
Such responses will not only determine whether his popularity will
face a sharp fall, like Lee Myun-bak and Ma Ying-jeou, but will also
determine whether he can create a miracle through his new policies
and whether he will succeed in fighting the financial crisis. Obama
will not take office until January 20 next year. The financial
tsunami will not quiet down for two months to wait for Obama's team
to beat it. Time waits for no man. Obama will, therefore, need to
show some performance at the G20 international financial summit in
Washington next week."

"The executive and legislative branches act in unison; Obama's
policies will face no obstacles"

The independent Chinese-language Hong Kong Economic Journal
commented in an editorial (11/7): "...After the presidential
election, the Democratic Party has control over both the White House
and the Congress. The President will face no obstacles in
implementing his policies. Judging from this angle, as long as
Obama can clearly suggest a bailout measure that is acceptable to
the financial market, the stock market should have a positive
response. Sources said that after Obama takes office, his first
budget will continue to be a deficit budget. In order to rescue the
flagging economy, he may listen to the call of the economists to
inject at least U.S.$150-500 billion to boost the economy, create
jobs, and encourage American people to keep spending.... The
non-partisan research institute, Tax Policy Centre, reported that
Obama's tax policy will raise the U.S. deficit to U.S.$3 trillion in
the next decade. The situation will be more serious than during the
Bush administration. After the victory of Obama, House Speaker
Nancy Pelosi pledged to introduce several economic stimulus plans in
the next few months. When the executive and legislative branches
are under the control of the Democrats, all plans will get passed
smoothly. The U.S. administration's spending will endlessly


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