Cablegate: Media Reaction: Rmb Exchange Rate, China's Trading

VZCZCXRO2610
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #3192 3341038
ZNR UUUUU ZZH
R 301038Z NOV 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 6983
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS BEIJING 003192

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: RMB EXCHANGE RATE, CHINA'S TRADING
RELATIONSHIPS

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Editorial Quotes
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1. RMB EXCHANGE RATE

"Wen Jiabao: I hope the world's major reserve currencies remain
stable"

The Shanghai-based Shanghai Media Group (SMG) publication, China
Business News (Diyi Caijing)(11/30)(pg A4): "At present, each
country's macroeconomic policy should continue to focus on dealing
with the crisis and stimulating economic growth. A premature 'exit'
from these policies could cause us to lose the gains we have
achieved. As two major economies and important trading partners,
China and Europe should take real action to jointly oppose trade and
investment protectionism. China has maintained the stability of the
RMB exchange rate, which has been an important contribution to
global financial stability and economic development. We will
continue to keep the RMB stable at a reasonable and balanced level
and to make the RMB exchange rate more flexible. We hope that the
world's major reserve currencies also remain stable."

2. CHINA'S TRADING RELATIONSHIPS

a. "China-U.S. economic and trade imbalances are a false topic"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(11/30)(pg 15): "History has shown that, over
the last 30 years, the trading position and structure of the United
States and China have resulted from globalization. Cargo trade is
only part of the China-U.S. bilateral economic relationship. An
imbalance in cargo trade should not be taken to represent and
overshadow the entire China-U.S. economic relationship. The United
States has a large lead in services trade and investment when
compared to China. Over the past 10 years, the accumulated surplus
in U.S. services trade with China was more than $20 billion.
Furthermore, the imbalance in China-U.S. cargo trade is related to
U.S. controls on exports to China. The United States' rigid and
conservative thinking has restricted American companies' exports to
China. Even though China has taken significant steps to expand
imports from the United States, the trade imbalance between the two
countries still remains. Therefore, more attention should be paid
to the cause of the imbalance and its underlying unfairness than to
the imbalance itself. The China-U.S. trade imbalance is more than a
single issue, not mention the fact that it is not caused by China."

b. "Don't blame trade protectionism on China's excessive
productivity"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(11/27)(pg 8): "The EU Chamber of Commerce
issued a report criticizing China's 'excessive productivity' for
causing global trade disputes. Chinese experts believe that this is
a ridiculous conclusion. Liu Zhiqin at the Beijing office of Zurich
Bank said that China's economic stimulus measures are primarily
focused on the domestic economy, rather than on exports or foreign
demand. In addition, China's consumption goods, which do not
include iron, steel, cement, or wind and electricity-related
products, are not produced excessively. The report is not based on
facts. It is inappropriate to blame protectionism on China. Some
Westerners made this theory up in order to scare China and exploit
the unnecessary tension to their benefit. Western countries'
current increased protectionism towards China is in fact aimed
solely at protecting their own interests. "

HUNTSMAN

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