US embassy cable - 05TAIPEI266

S E C R E T SECTION 01 OF 03 TAIPEI 000266 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 01/21/2015 
TAGS: PREL, PGOV, TW, Cross Strait Politics 
SUBJECT: CHEN WARNS PRC OF CONSEQUENCES OVER ANTI-SECESSION 
LAW 
 
REF: 04 TAIPEI 2662 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: President Chen Shui-bian announced on January 
20 that Taiwan may pass an "Anti-Annexation Law" or hold a 
public referendum if the PRC proceeds with plans to enact an 
Anti-Secession Law in March.  Chen told a Japanese newspaper 
that there are growing calls to hold a referendum on the 
issue to coincide with a National Assembly (NA) election that 
will be organized before May 26, 2005.  Chen administration 
officials say the president's announcement was calibrated to 
lay down a marker with Beijing before it proceeds any further 
with the new law.  The National Security Council (NSC) has 
assured AIT that no formal decision on a referendum or 
counter-legislation will be made until Taipei knows the full 
contents of the PRC's draft law.  Nevertheless, officials say 
the president's January 20 warning is consistent with a 
broader policy framework that seeks to balance a soft line on 
cross-Strait economics with a tough stance on political 
relations.  While this NSC policy initiative is ostensibly 
aimed at protecting Taipei's interests vis-a-vis the 
Mainland, senior Chen administration officials admit that 
domestic political factors are at least equally central to 
the president's calculations.  End Summary. 
 
Eye for an Eye 
-------------- 
 
2. (C) President Chen Shui-bian warned that a PRC decision to 
proceed with its proposed Anti-Secession Law could provoke a 
public and political backlash in Taiwan, according to a 
transcript of an interview with the Japanese Mainichi Shimbun 
released on January 20.  Chen characterized the proposed PRC 
law as a counter-weight to the U.S. Taiwan Relations Act, and 
said Beijing's moves have already "hurt the feelings of the 
Taiwan people."  Chen asserted that public pressure could 
"force" his administration to draft an "Anti-Annexation Law" 
(fanbingtun fa) or hold a referendum on May 26 to protest the 
PRC's action.  Chen told a group of distinguished U.S. 
scholars on January 20 that the Democratic Progressive Party 
(DPP) may also organize massive demonstrations similar to 
those held in Hong Kong in 2003 against Article 23 of Hong 
Kong's Basic Law. 
 
Coordinated Move 
---------------- 
 
3. (C) Chen administration officials say that the president's 
initiative came at the suggestion of NSC Secretary General 
Chiou I-jen.  Strait Exchange Foundation (SEF) Deputy 
Secretary General Yen Wan-ching told AIT that the president's 
 
SIPDIS 
warning was meant to lay down a marker with Beijing before it 
finalizes the text of the Anti-Secession Law.  "We want to 
let them know that a strongly-worded law will be met with a 
tough political reaction on this side," he added.  Yen said 
that the president's comments also fit within a broader 
"two-pronged" (liangshou) strategy that combines concessions 
on the cross-Strait economic front with toughness on the 
political side.  "We gave in on almost all of our past 
conditions for the charter flight agreement and will continue 
to be flexible on economic issues," he added, "but we will 
balance this with firmness on the political front." 
 
4. (S) NSC Aide Chang Hsiang-hui contacted AIT on January 21 
under instructions to explain the government's decision. 
Chang emphasized that the president has not committed to 
either a referendum or action on new legislation.  Instead, 
Chang claimed that Chen's announcement was meant to caution 
Beijing that its actions would have consequences.  Chang 
offered assurances that Taipei would not make any formal 
decision to proceed on either a new law or a referendum until 
it saw the contents of the PRC legislation.  She added that 
NSC SecGen Chiou also promised to consult with the U.S. side 
before making a formal response to Beijing's proposed law. 
When pressed on the timing of the January 20 announcement, 
Chang cited growing domestic political pressure to respond 
over the PRC draft law. 
 
Domestic Calculations 
--------------------- 
 
5. (C) Other senior DPP officials also cited the domestic 
political motives behind the president's remarks.  Long-time 
Chen confidante and Hakka Affairs Council (HAC) Minister Luo 
Wen-chia told AIT on January 21 that moderates in the DPP are 
fearful that the PRC's initiative may re-energize 
pro-independence fundamentalists still reeling from the 
party's December 11 LY electoral setback.  "We moderates have 
had the upper hand since the election," he commented, "and it 
looks like we'll even succeed in purging fundamentalists from 
the cabinet next week."  However, Luo warned that if the 
president appeared to go soft in the face of Beijing's 
"ill-timed provocation," Chen would hand Lee Teng-hui and his 
allies the chance to make a comeback.  Executive Yuan (EY) 
Research, Development, and Evaluation Council (RDEC) Vice 
Minister Chen Chun-lin offered a similar assessment.  He 
noted that the president's emphasis on "opposing unification" 
is meant to pre-empt calls by DPP fundamentalists to 
"accelerate independence" in response to PRC pressure.  Chen 
joked that "the U.S. should welcome both the PRC's 
Anti-Secession Law and a Taiwan Anti-Annexation Law since 
both would ostensibly be enacted to prevent the other side 
from forcing a change in the status quo." 
 
Fear of the Unknown 
------------------- 
 
6. (C) Chen administration officials acknowledge that it is 
too early to assess the severity of the Anti-Secession Law 
draft, but many are already assuming the worst.  A common 
fear expressed by senior Taiwan officials is that the law 
will "criminalize" support for Taiwan independence.  Chunghwa 
Institute for Economic Research (CIER) Vice President Michael 
Chang (Jung-feng) told AIT that DPP officials worry that 
Beijing will use threats of criminal action against 
ideological opponents in the same way they did during the 
Chinese civil war.  Chang noted that during the civil war, 
many KMT generals cut side deals with the CCP to avoid the 
threat of prosecution later on, thus undermining morale 
within the KMT's ranks.  "Even if they don't enforce a law 
aimed at 'splittists,'" Chang assessed, "the fact that 
supporting Taiwan independence could carry a criminal penalty 
would send a chill through anyone in Taiwan who transacts 
business on the Mainland."  However, Chang noted that since 
the proposed PRC law could well be as benign as Taiwan's 
Cross-Strait Relations Statute, Taipei should probably hold 
its fire until it sees the full text. 
 
Road Ahead 
---------- 
 
7. (C) While NSC officials tell AIT that no formal policy 
decision has been reached on a new law or referendum, many 
are focusing on President Chen's suggestion of linking a 
referendum to the upcoming election to select members of the 
National Assembly (NA).  The NA will convene to formalize 
constitutional changes passed by the LY on August 23, 2004 
(Reftel).  SEF's Yen remarked that if the president does 
decide to schedule a referendum together with the NA vote, he 
would do so by invoking Article 17 -- the controversial 
"Defensive Referendum" clause -- of the 2003 Referendum Law. 
Following the president's announcement of a possible 
referendum on May 26, an official from the Central Election 
Commission (CEC) clarified to reporters that there has been 
no date set for the NA election.  The LY voted on January 14 
to give the CEC leeway in selecting a date sometime before 
May 26. 
 
Comment: Predictable but Problematic 
------------------------------------ 
 
8. (C) Despite assurances that President Chen's January 20 
warning was aimed at moderating the contents of the draft 
Anti-Secession Law, the DPP government may well follow 
through with a referendum or new law regardless of how severe 
or moderate the draft PRC law turns out to be.  DPP officials 
tell AIT that Chen remains deeply frustrated with the results 
of the December 11 LY election and some suggest that he may 
seek to use the NA election to recover lost momentum.  While 
the NA will be elected simply to vote up-or-down on the 
package of constitutional reforms passed by the LY last 
August, the DPP may well use the campaign to re-energize its 
support base ahead of the critical (in domestic political 
terms) magistrate/mayor elections in December. 
PAAL