US embassy cable - 04TAIPEI3796

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003796 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 10/10/2013 
TAGS: PREL, PGOV, TW 
SUBJECT: NSC SECGEN CHIOU ON CROSS-STRAIT/U.S.-TAIWAN 
RELATIONS 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: National Security Council (NSC) Secretary 
General Chiou I-jen acknowledged continued USG concerns over 
where President Chen Shui-bian is leading Taiwan, but 
asserted that Chen knows that a move towards de jure 
independence would mean war.  Chiou said that Taiwan will 
continue to seek channels to convey Taipei's intentions to 
Beijing and asked Washington to help facilitate contacts. 
Chiou expressed optimism over passage of the USD 18 billion 
special procurement budget in the lame duck Legislative Yuan 
(LY) session that will open after the December 11 election. 
Chiou was upbeat over Pan-Green chances in the December 11 
election, estimating that the government will be able to 
exert working control over the LY with the help of 3-5 
non-partisans even if it does not secure an outright majority 
on its own.  End Summary. 
 
Chiou Says CSB Knows His Limits 
------------------------------- 
 
2. (C) During a November 25 dinner with the AIT Deputy 
Director, NSC Secretary General Chiou I-jen acknowledged that 
rhetoric used during the 2004 presidential election campaign 
has left many in Washington worried about President Chen's 
second term intentions.  Chiou said that President Chen is 
equally cognizant of this fact and is trying to rebuild the 
trust that was lost during the election period.  Chiou 
asserted that the USG "should not worry" that Chen will lead 
Taiwan towards independence in his second term because the 
president is fully aware that Beijing and the international 
community would not permit it.  "If there was no PRC military 
threat, the president, myself, and everyone else in the 
Democratic Progressive Party (DPP) would prefer that Taiwan 
was independent," Chiou asserted, "but we are not blind to 
reality."  Chiou dismissed speculation that Chen seeks a 
declaration of Taiwan independence as his historical legacy. 
"Why would someone decide to make something that is 
impossible to achieve his overriding political goal?" Chiou 
asked rhetorically. 
 
3. (C) Chiou acknowledged that there were elements within the 
president's base who were less realistic about Taiwan's 
constraints.  However, he noted that these voices were almost 
all from the older generation.  "If you talk to the 
up-and-coming generation in the DPP, you will not hear the 
sorts of things advocated by people like the vice president," 
he added.  Chiou pledged to keep an eye on actions by the 
government that may impact on cross-Strait stability.  As an 
example, Chiou said he previewed the Executive Yuan's (EY) 
recently introduced revisions to the opposition-passed 
Referendum Law to ensure that they did not lower the bar to 
initiate referenda on constitutional-related subjects. 
(Comment: Chiou acknowledged, however, that he had not 
considered whether the revisions would make it easier to 
initiate a referendum on sensitive subjects like "one 
country, two systems" that were not necessarily related to 
constitutional reform.  Nor did he address a possibility 
raised with AIT by KMT Taipei Mayor Ma Ying-jeou, that 
non-binding "consultative" referenda on sensitive subjects 
could be used to cow the LY opposition into passing 
constitutional amendments they would otherwise oppose, 
Septel.) 
 
Reality as Beijing Sees It 
-------------------------- 
 
4. (C) Chiou said he fully shares USG concerns over Beijing's 
increasingly alarmist views of developments in Taiwan, and 
stated that this is the reason Taipei is so eager to 
establish some sort of a dialogue channel with the PRC.  "We 
may think they are worried about 10 issues when it turns out 
they are focused on 100," he stated, "the only way we will be 
able to clarify their concerns is by talking to them as we do 
with the U.S. and other countries."  Chiou noted that recent 
PRC public statements indicate that Beijing is unwilling to 
show flexibility on the "one China" precondition for formal 
talks.  If this is the case, he continued, Chiou suggested 
that the two sides open a private channel "where face will 
not be an issue."  Chiou appealed to Washington to help 
facilitate such a channel. 
Special Procurement Budget: Cautious Optimism 
--------------------------------------------- 
 
5. (C) Turning to bilateral issues, Chiou expressed optimism 
that the USD 18 billion special defense procurement budget 
would pass in the December-January lame duck LY session. 
Chiou said he expected Lien Chan and other Pan-Blue leaders 
to oppose the budget out of spite for their losses in the 
presidential and LY elections.  However, Chiou asserted that 
the DPP would exploit anticipated splits within the KMT over 
leadership secession to assemble a majority.  "KMT reformists 
are likely to embrace the special budget as one of the issues 
to push Lien and his cadre out of power," Chiou stated. 
Chiou assessed that KMT LY President Wang Jin-pyng would try 
to use cooperation over the special budget as a bargaining 
chip with the DPP to secure his own political future.  Chiou 
said the DPP would accommodate Wang to some extent, but not 
as far as allowing him to keep his speakership in the next 
LY.  Chiou predicted that, in the end, Wang would facilitate 
passage in order to curry favor with KMT reformists as part 
of his own bid for the KMT chairmanship. 
 
Domestic Politics: Pan-Green Majority Within Reach 
--------------------------------------------- ----- 
 
6. (C) Chiou said that the DPP's LY campaign is generally on 
track, but said the Pan-Green is not yet confident enough to 
predict an outright Pan-Green majority.  Chiou offered that 
the DPP currently projects that it will win 96 seats, with 
the Taiwan Solidarity Union (TSU) picking up an additional 
14, for a total of 110 (out of 225).  Chiou estimated that 
the DPP could gain an additional three seats if it dropped 
one candidate each from its lists in Taipei County Second 
District, Taipei City North, and Taoyuan County.  However, he 
said no decision on shifting resources away from struggling 
candidates would be made until December 1.  Chiou asserted, 
however, that even if the Pan-Green falls short of the 113 
needed for a majority, the DPP can assemble a working LY 
majority with the help of 3-5 friendly non-partisans 
(Septel).  Chiou added that the DPP will certainly appoint a 
non-partisan as LY Vice President, most likely fourth-term 
aboriginal legislator Walis Pelin, to solidify its control 
over the body. 
 
Comment: Is Chiou for Real? 
--------------------------- 
 
7. (C) To us Chiou clearly portrays his role in the Chen 
administration as the voice of moderation, informing the 
political leaders of the international and cross-Strait 
implications of their words and actions and balancing against 
the influence of the DPP's pro-independence wing.  However, 
Chiou is actively involved in DPP political strategy, even in 
his current foreign policy position.  It is unlikely that 
Chiou has been as surprised as he claims to be by some of the 
more provocative themes the president has floated in recent 
weeks.  Chen's focus on sovereignty themes on the campaign 
trail was not an aberration, it was a core element of the 
DPP's plan to stimulate its core support base.  As with the 
last election, Chen and his senior advisors appear to have 
mapped out a strategy that would use "goodwill" gestures such 
as the October 10 speech and November 10 "10 Points" 
initiatives to distract international attention from more 
provocative elements of the DPP's campaign platform.  Chiou 
is among the most respected campaign strategists in the DPP 
camp and thus quite likely a key player in this two-handed 
strategy. 
PAAL