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Cablegate: Media Reaction: U.S.-China Relations, Carbon Tariff,

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R 070917Z JAN 10
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 7528
INFO RUEHOO/CHINA POSTS COLLECTIVE
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UNCLAS SECTION 01 OF 02 BEIJING 000028

DEPARTMENT FOR INR/R/MR, EAP/CM, EAP/PA, EAP/PD, C
HQ PACOM FOR PUBLIC DIPLOMACY ADVISOR (J007)
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TAGS: PREL ECON SENV KGHG KMDR OPRC CH

SUBJECT: MEDIA REACTION: U.S.-CHINA RELATIONS, CARBON TARIFF,
AFGHANISTAN, CHINA POLICY

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Editorial Quotes
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1. U.S.-CHINA RELATIONS

"Calmly deal with trade protectionism"

The official Communist Party People's Daily (Renmin Ribao)
(01/07)(pg 3): "Some countries' protectionist measures have added
more difficulty to the global economic recovery. Unfortunately,
following the financial crisis, some countries seem to have
forgotten the lessons history has taught us. These countries try to
pursue short term economic interests at the cost of free trade.
History will prove once again that beg-thy-neighbor policies are not
wise. What's more, developing countries are the main victims in
this round of trade protectionism. Therefore developing countries
should continue to take firm stands when promoting free trade and
opposing trade protectionism. They should also be prepared to fight
a long-lasting war, in which under different circumstances flexible
strategies and calmness will be needed, to face a more complicated
international trade situation."

2. CARBON TARIFF

"A carbon tariff is an attack"

Guangdong 21st Century Publishing Company Ltd.'s business newspaper
21st Century Business Herald (21Shiji Jingji Baodao)(01/07)(pg 3):
"According to the World Bank's research report, if carbon tariffs
are fully implemented, products 'Made In China' will face carbon
tariffs, in average in the international markets, up to 26%.
China's export volume will thus slide down by 21%. Once the
European Union launches these carbon tariffs and China and other
member states object, disputes will occur. As a result, related
proceedings will resort to the WTO's dispute settlement mechanism.
The ruling will then be made by a panel composed of independent
trade experts and lawyers. The panel may either endorse the carbon
tariff as legal according to the Article 20, as the EU believes, or
find it illegal since it could be seen as a means to compensate for
the loss of domestic enterprises rather than address climate change.
However, there aren't any panels that have processed carbon tariff
trade disputes, thus its legality is still in question. It is
likely that the EU will choose to achieve emission reductions goals
of 30% rather than 20%. Under such circumstances, the EU is likely
to adopt carbon tariffs to increase its negotiation chip and urge a
larger devotion from other countries in emission reductions.
However, the EU is also well aware that once carbon tariffs are
implemented, a trade war may be started. As Chinese Ambassador to
the WTO Sun Zhenyu has said, the carbon tariff has changed efforts
to address climate change into a trade war."

3. AFGHANISTAN

"China could step into Afghanistan through the Shanghai Cooperation
Organization"

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(01/07)(pg 14): "A continuously chaotic
situation in Afghanistan will surely influence China's national
interests. Therefore, China should take more initiative in
Afghanistan and play a more constructive role. It is an issue
concerning China's neighboring strategy and its international image.
China could depend on international cooperation in order to achieve
their goals, like the Shanghai Cooperation Organization, the UN, the
Asian Development Bank and others. Besides, China could make an
active effort to realize the reconciliation of various political
parties inside Afghanistan. In this way, China, acting as a
coordinator and a host for the negotiation, will be able to win the
support of the Afghan people and neighboring countries. What's
more, by choosing relatively stable and friendly regions, continuous
economic investment could be made in Afghanistan. Finally, China
could create more opportunities for Afghan young people to come to
China to study. In conclusion, it is a good thing for China to step
into the Afghanistan peace and reconstruction process, but instead
of sending military troops, China should involve itself through
non-military means and assistance."

4. CHINA POLICY

"China provides answers to the international financial crisis"

The official Communist Party People's Daily (Renmin Ribao)(01/05)(pg
1,2): "China performed unbelievably well during the international
financial crisis of 2009. Within just one year after the crisis
occurred, China's economy began to recover. Now, China is acting as
a new growth engine for the world economy should it bottom out.
China's contribution to global economic growth in 2009 will exceed

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50 percent, since the end of World War II the world has been on one
economic pattern, this is a new global economic trend. What enabled
China to sustain this 'impossible miracle?' The truth is, China
prepared early for the challenges. As early as August 2007, Chinese
leader Hu Jintao urged the country to strengthen its monitoring and
early warning system for national economic security, as well as
enhance the capacity of the financial sector to resist the risks in
economic globalization. China's strength comes from the ruling
party's decisiveness, the institutions' support capacity and the
guidance of theories. Even if China has summoned all hands on deck
to boost economic growth, it still made great efforts to improve the
living standards of the people; the harder the economic
circumstance, the more important the livelihood of the people.
Therefore, China has duly undertaken its international
responsibility and obligation, actively taken part in international
cooperation to fight the crisis, promoted reform of the
international financial system and coordinated its macroeconomic
policies with other economies. The institutional defects of
capitalism have been fully exposed as neo-liberalism that has came
to a dead end amid the financial crisis. China, when pushed to a
crossroads, has demonstrated its national capability to meet
challenges with a superior system of socialism with Chinese
characteristics. [NB: This article was featured on CCTV's Tuesday
news. The author 'Ren Zhongping' is in fact an abbreviation of
Renmin ribao zhongyao pinglun (important commentary from People's
Daily)."

GOLDBERG

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