Cablegate: Media Reaction: Financial Crisis

VZCZCXRO0589
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4608 3540918
ZNR UUUUU ZZH
R 190918Z DEC 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 1496
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI

UNCLAS BEIJING 004608

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: OPRC KMDR CH

SUBJECT: MEDIA REACTION: FINANCIAL CRISIS

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Editorial Quotes
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FINANCIAL CRISIS

a. "The rumors say that China has warned that it will stop lending
money to the U.S."

The official Communist Party international news publication Global
Times (Huanqiu Shibao)(12/19): "China has warned that it will stop
lending money to the U.S. Recently news about the possibility that
China will stop purchasing American debt, and that China will not
support the U.S. economy forever, have been spread throughout the
World. These stories have created a sensation. The fact that China
is holding American debt has always been a sensitive and complicated
issue between the two countries. At present, the U.S. is
experiencing a very sensitive and fragile period, and China is also
having economic difficulties. Both countries have economic concerns
and this issue, concerning the U.S. national debt only adds more
pressure. Chinese experts indicate that China has no other choice
but to hold a lot of American debt because China has a large amount
of foreign exchange reserves which don't have other appropriate
outlets. Most of these reserves are used to invest in U.S. national
debt. The financial position of the U.S. in the world has also
contributed to this situation. Currently, it is not possible that
China will continue large scale investments in the U.S. China should
not be the one to pay the bills of the crisis. China is unable to do
it. However, China will not decrease its purchasing or its selling
of American debt in the hope that the U.S. will walk away from the
crisis as soon as possible, reducing the influence of the crisis."

B, "The financial crisis may be a good thing"

The China Radio International sponsored newspaper World News Journal
(Shijie Xinwenbao)(12/19): "The American financial crisis has fully
exposed the flaws in the Western economic system. It also shows
that the system that the West previously advocated is unreliable.
This crisis is a lesson for developing countries concerning
financial operations and rules. Developing countries will have a
clearer understanding of the subtle operation and rules of U.S.
financial capital markets. Because of this, they will make an effort
to promote international cooperation and set up a fair and healthy
international financial system. What's more, developing countries
will increase their efforts to set up 'sovereignty funds', seeking
more independence in finance. The U.S. dollar, as the major
international reserve and settlement currency, should have the
necessary transparency and receive strict supervision."

RANDT

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