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Viewing cable 09BEIJING820, MEDIA REACTION: CURRENCY, CHINA'S MILITARY STRENGTH

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Reference ID Created Released Classification Origin
09BEIJING820 2009-03-27 08:52 2011-08-23 00:00 UNCLASSIFIED Embassy Beijing
VZCZCXRO1873
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0820/01 0860852
ZNR UUUUU ZZH
R 270852Z MAR 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 3129
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHMFIUU/CDR USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 02 BEIJING 000820 
 
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: CURRENCY, CHINA'S MILITARY STRENGTH 
 
BEIJING 00000820  001.2 OF 002 
 
 
-------------------- 
  Editorial Quotes 
-------------------- 
 
1. CURRENCY 
 
a. "Enlarge the influences of the RMB and promote China's RMB 
internationally " 
 
21 Century Business Herald (21Shiji Jingji Baodao) under Guangdong 
21 century publishing company Ltd. (03/27): 
"While the U.S. dollar crisis it is a good time to reform the 
international currency system.  But, as the tool of the U.S.' global 
hegemony, the weakened position of the U.S. dollar means the 
weakened position of the U.S.' power. It is therefore understandable 
that the U.S. is against this. Although Europe hopes to replace the 
U.S. dollar with the Euro and strengthen the supervision and 
restraint in the American financial system, Europe may not support 
the new proposal of a super-sovereign currency, because if they do 
so, the position of Euro will be weakened as well. 
 
The new proposal, which reflects the opinions of most countries, 
might do three things; spur America to responsibly stabilize their 
exchange rate, highlight the unreasonable international status of 
U.S. dollars (USD), and point out a direction for the reform of the 
IMF.  For China, the present is not the time to destroy the status 
of the dollar. It is time to accelerate the regional influence and 
internationalization of the RMB. China's aim is to support the 
existing IMF framework rather wiping out the existing international 
system." 
 
 
b. "The call for international reserve currency is aimed at warning 
America" 
 
The Beijing based News Agency co-founded by Guangming Daily and 
Nanfang Daily Group Publication; The Beijing News (Xin Jing Bao) 
(03/27): "As the supporting foundation for the USD starts to shake 
due to the global financial crisis; America continues to conduct 
easy money policies. The voices for "pulling down (the current 
international currency system) to build up a new one" have become 
stronger.   But in this situation, when the global economy hasn't 
yet recovered, if the USD's position as the reserve currency 
fluctuates, there are more disadvantages than advantages.  Most of 
the countries will suffer huge deficits from the devaluation of the 
USD. Due to a lack of consensus on the future direction of reform 
measures for the international currency system, 'the super-sovereign 
currency' is hard to implement. 
 
Although China has called for a new international reserve currency; 
China's economic power is not up to the standard needed to lead. The 
real purpose is to warn America. If America wants to keep its 
international reserve currency status, it will have to restrain the 
U.S. dollar. America must be responsible and respect the assets of 
other countries. This is a signal to emerging economies, a call 
towards participation in the reform of the international currency 
system." 
 
2. CHINA'S MILITARY STRENGTH 
 
a. "Pentagon Report 'grossly distorts facts'" 
 
The official English-language newspaper China Daily (03/27): 
"Beijing yesterday dismissed a Pentagon Report on the country's 
military strength, saying it "grossly distorts facts" and "smacks of 
Cold War mentality". The report continues to play up the fallacy of 
China's military threat and interferes in China's internal affairs. 
China unswervingly sticks to a path of peaceful development and 
pursues a policy which is purely defensive in nature, a Foreign 
Ministry Spokes person said, noting that Beijing is committed to 
safeguarding world peace and stability. "We urge the United States 
to respect this basic fact. We suggest the United States drop the 
Cold War thinking and prejudices, stop releasing such reports and 
stop groundless accusations to prevent further damage to the 
relationship between the two countries and two armies." Yesterday 
the Ministry of Defense said that it was annoyed with the U.S. 
Report. There are still many hurdles to be removed in the China-U.S. 
military relations, which are experiencing a difficult period. 
 
Song Xiaojun, a Beijing-based military expert, said the Pentagon 
routinely uses the "China military threat" to seek increases in the 
defense budget from Congress. "The Pentagon has always put China's 
defense budget at twice the level of the Chinese government's 
figure. Its motives are not pure," he said. 
 
"The negative view of the U.S. military shows that some people in 
the U.S. still view China as a threat. They always try to make the 
worst-case scenario about China, said Niu Xinchun, vice-director of 
the Center for American Studies at the China Institute of 
 
BEIJING 00000820  002.2 OF 002 
 
 
Contemporary International Relations.  The U.S. military needs to 
create a potential enemy after the Iraq War and some are picking 
China," a military officer said yesterday on condition of 
anonymity." 
 
PICCUTA