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Cablegate: Media Reaction: China's Currency, U.S.-China Trade

VZCZCXRO1284
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2453 2380927
ZNR UUUUU ZZH
R 260927Z AUG 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 5795
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS BEIJING 002453

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: CHINA'S CURRENCY, U.S.-CHINA TRADE
RELATIONS, BRIBERY CASE

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Editorial Quotes
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1. CHINA'S CURRENCY

"We should not be rash about RMB internationalization" (pg 14)

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(08/26): "A signal that China is becoming a
truly powerful country will be when the world starts to purchase and
deposit China's currency, the RMB. The financial crisis has made
China realize the danger of maintaining its wealth in U.S. dollars.
Internationalization of the RMB is connected to China's strength;
however, this will be a long process and we cannot be rash about it.
The RMB's reputation has yet to be established. People in
countries neighboring China are willing to trade in RMB, but are
unwilling to hold deposits in RMB. The RMB must first be widely
used in countries neighboring China; only then can it be
internationalized. The financial crisis seems to have given China
an opportunity to move forward with plans to internationalize the
RMB. However, in reality the situation is less optimistic. China
must have a long-term strategic plan, prepare for various risks, and
adjust its plans in a timely manner according to realistic trade and
tourism circumstances."

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2. U.S.-CHINA TRADE RELATIONS

"China's possible 'revenge list' against the U.S. does not comply
with an optimized and continuous game" (pg 2)

Guangdong 21st Century Publishing Company's business newspaper 21st
Century Business Herald (21 Shiji Jingji Baodao) (08/26): "Some
Chinese officials are concerned that President Obama may give in to
political pressure and decide to take protective measures against
Chinese tire products. Some scholars have suggested creating a
'revenge list' of U.S.-China trade products as a way to deal with
the situation. In fact, China has avoided taking radical measures
to deal with other countries' protectionist policies aimed at
correcting the unbalanced role of China in international trade. As
a major exporter, China will be harmed more than importing countries
if large-scale protectionist measures are adopted. A country's
negotiating ability determines what kind of foreign trade policy it
can choose. If a country has enough domestic demand, it will not be
pressured during trade negotiations by countries it exports to. For
China, the best long-term solution is to cultivate domestic demand,
rather than to create a 'revenge list,' which will only be effective
in the short term and will cause more harm than good."

3. BRIBERY CASE

"What does the CCI case mean?" (pg A13)

The Shanghai-based Shanghai Media Group (SMG) publication, China
Business News (Diyi Caijing)(08/25): "The Control Component Inc.
(CCI)(a U.S. company) case does not target China, but rather U.S.
companies' corrupt behavior overseas. Chinese companies should not
feel disgruntled by the Justice Department's handling of the case,
but rather should take the opportunity to investigate possible
bribery in China. A company's behavior and an individual's
behavior should be taken separately. Taking bribes is normally the
behavior of an individual. When stressing that their companies did
not accept bribes, the Chinese companies affected by this case
should be aware that certain individuals may have been involved in
bribery. These companies should therefore be cautious in their
positions and statements on the issue. International judicial
cooperation should also be stepped up. This will enhance China's
ability to crack down on corruption. The CCI case has in fact
provided a good opportunity for cooperation."


HUNTSMAN

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