US embassy cable - 05TAIPEI1407

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 001407 
 
SIPDIS 
 
STATE PLEASE PASS TO AIT/W 
 
E.O. 12958: DECL: 03/28/2015 
TAGS: PGOV, PREL, TW 
SUBJECT: CHEN SHUI-BIAN: RESILIENT, IN CONTROL, BUT BOXED IN 
 
REF: A. 2004 TAIPEI 3956 
 
     B. TAIPEI 00019 
     C. TAIPEI 00020 
     D. TAIPEI 00130 
 
Classified By:  AIT Deputy Director David J. Keegan, Reason: 1.4 (B/D) 
 
1. (C) Summary.  In the three months since he led his 
Democratic Progressive Party (DPP) into its December 
legislative election setback, President Chen Shui-bian has 
stepped back from the confrontational public rhetoric he 
brought to both the presidential and legislative campaigns 
last year.  His change in behavior was personified in his 
January appointment of the more moderate Frank Hsieh as 
Premier and his willingness to compromise to achieve a lunar 
new year charter flight agreement with Mainland China.  At 
the same time, Chen has continued to apply the divisive 
tactics of the campaign to his backroom political maneuvering 
within the DPP and with the opposition in the Legislative 
Yuan (LY). 
 
2.  (C) Belying predictions that he had been gravely weakened 
by the LY setback, Chen demonstrated extraordinary 
resilience, repositioning himself in full control of the DPP 
and its secession struggle and driving wedges into the 
Pan-Blue majority coalition, all the while maintaining ties 
with his fundamentalist, pro-independence base.  In recent 
days, Beijing's Anti-Secession Law has challenged Chen's 
"conciliation" policy, but not his hold on the DPP, where he 
remains the final arbiter, ensuring that he will not soon 
become a lame-duck president and that he may be able to 
determine the issue that now concerns him most -- his own 
presidential legacy.  End Summary. 
 
Conciliation and Cooperation 
---------------------------- 
 
3.  (C) Surprised and humiliated by the failure of his DPP to 
win a majority of seats in the December 11 LY election, 
President Chen Shui-bian resigned as party Chairman.  He 
adopted a lower profile in sharp contrast to the supremely 
confident leader who relentlessly pushed his independence 
agenda in the campaign and kept the opposition reeling.  Chen 
showed unaccustomed humbleness in his New Year's address, 
calling for the ruling party to show "humility" (Refs A,B,C). 
 
4.  (C) In January, Chen further shifted tactics and began 
calling for cross-partisan cooperation, urging Blue and Green 
camps to reconcile and begin working together for the good of 
Taiwan.  In late January, he appointed Frank Hsieh 
(Chang-ting) to replace the more confrontational, inflexible 
Yu Shyi-kun as Premier.  Hsieh brought a more moderate face 
to the Chen government, both domestically and cross-Strait, 
by working to build a &consultative and co-existence8 
government style and to defuse cross-Strait tensions that had 
built up over DPP campaign issues, announcing he would not 
engage in precipitous &name rectification8 and would go 
slow on constitutional reform, while respecting the extant 
Republic of China constitution.  The January 15 lunar new 
year charter flight agreement with Mainland China was made 
possible when Chen agreed not to insist that Taiwan 
government officials responsible for cross-Strait relations 
must be part of Taiwan,s negotiating delegation (Ref D). 
 
Chen in the Catbird Seat 
------------------------ 
 
5.  (C) In January, Chen also moved to reassert unquestioned 
leadership of the DPP through an adroit set of personnel 
moves.  Shunting the popular Su Tseng-chang into the DPP 
Chair and bringing Chen,s longtime nemesis Frank Hsieh back 
to Taipei as Premier left Chen squarely in the party driver's 
seat, with the two leading presidential successors now 
vulnerable to failure and wholly beholden to Chen.  The other 
two contenders for the DPP presidential succession have been 
relegated to back seats.  Former Premier Yu Shyi-kun was 
demoted to Presidential Office Secretary General, while Vice 
President Annette Lu (Hsiu-lien) has, either reading the 
writing on the wall or under instructions, played a more low 
key role over the past three months. 
 
6.  (C) Chen used a similar divide-and-conquer approach with 
the opposition, orchestrating a political courtship with the 
PFP, which sowed distrust between the PFP and its Pan-Blue 
coalition partner, the KMT, and effectively undermined the 
Pan-Blue coalition.  When it became clear that no DPP-PFP 
alliance would materialize, Chen held a highly publicized 
meeting on February 24 with PFP Chair James Soong, announcing 
a &Ten Point8 agreement.  The once-proud majority Pan-Blue 
coalition was left in tatters, with only ad hoc cooperation 
between KMT and PFP after the latter announced "equidistance" 
between the two major parties. Instead of two camps, green 
and blue, Taiwan now has three -- green, blue and the orange 
PFP. 
 
Fundamentalist Challenge 
------------------------ 
 
7.  (C) The greatest challenge to Chen,s moderate tack on 
domestic politics and cross-Strait relations has come from 
pro-independence elements within the Pan-Green coalition. 
Independence advocate Yao Chia-wen, President of the 
Examination Yuan, told AIT that independence activists were 
holding back and giving Chen operating room for the time 
being, although they opposed his compromises with Pan-Blue, 
especially the Chen-Soong meeting, and with China. 
Pro-independence Taiwan Solidarity Union (TSU) leaders told 
AIT they expect the pendulum will swing back in their 
direction in the aftermath of Mainland China,s 
Anti-Secession Law.  TSU has announced plans to hold an 
"anti-annexation8 rally on May 8, which would double as a 
campaign rally for the May 14 National Assembly election. 
 
8.  (C) For their part, Chen and the DPP are seeking to 
re-take the initiative in the Green coalition with their 
March 26 rally, which its leaders hope will appease much of 
the Taiwan anger over the Law.  Lo Chi-cheng, Executive 
Director of the pro-DPP Institute for National Policy Review 
(INPR), told AIT that the government is trying to avoid being 
forced to pass legislation retaliating against the PRC 
Anti-secession law.  Protest rallies in Taiwan, Lo explained, 
typically prove the end of the matter, as participants 
departed with their anger expiated.  The DPP government, he 
said, hoped the rally would leave it free to deal with 
cross-Strait issues.  NSC Senior Advisor Lin Jin-chang told 
AIT that the DPP was closely watching to make sure Green 
coalition partner TSU and its mentor Lee Teng-hui were not 
able to &hijack8 the March 26 rally and turn it into a 
launch vehicle for independence rage. 
 
Boxed In 
-------- 
 
9.  (C) Having skillfully dealt with both the opposition Blue 
and his own Green independence fundamentalists, Chen now 
faces a new set of factors that constrain his options and 
reinforce his present moderation.  The nascent DPP-PFP 
cooperation requires restraint to avoid alienating the DPP,s 
skittish new partner.  In addition, public opinion poll after 
public opinion poll show that a majority of Taiwan people 
support the cross-Strait status quo.  INPR's Lo showed AIT a 
copy of an island-wide public opinion poll his institute 
conducted last week, which showed just over 70% of 
respondents opposed a slowdown in exchanges with Mainland 
China -- 40% wanted exchanges to proceed unchanged and 30% 
wanted them to increase.  The December 11 LY election, Lo 
noted, demonstrated the consequences for Chen of ignoring 
public opinion and pushing the line on independence. 
 
Search for a Legacy 
------------------- 
 
10.  (C) A number of DPP and Pan-Blue contacts have told AIT 
that Chen is now wholly focused on building his presidential 
legacy.  Chen Wen-cheng, Special Assistant to Vice Minister 
of National Defense Michael Tsai (Ming-hsien), told AIT that 
Tsai had found his old friend, Chen Shui-bian, largely 
 
SIPDIS 
indifferent to the December city/county elections and wholly 
focused on his own legacy.  As President Chen moved deeper 
into his second term as President, MND's Chen continued, he 
was determined both to avoid becoming a lame-duck president 
and to define and guarantee his own presidential legacy.  At 
this point, MND's Chen noted, that legacy could still go 
either way -- cross-Strait peace and stability or Taiwan 
identity and separation. 
 
11.  (C) INPR,s Lo told AIT that the December LY election 
had made President Chen realize that support for independence 
was limited and that most Taiwan voters wanted to maintain 
the status quo.  Now, Mainland China's Anti-Secession Law had 
effectively closed the independence option for the forseeable 
future.  Chen, Lo concluded, had received this message and 
had moved into line with the majority of Taiwan voters who 
wanted to maintain the status quo and to continue and even 
improve cross-Strait relations. 
 
Comment:  Can the Leopard Change His Spots? 
------------------------------------------- 
 
12. (C) Has Chen Shui-bian changed, as his moderate 
supporters hopefully proclaim, or is this merely one more in 
a long line of course alterations by a master political 
chameleon?  The fact that a number of Pan-Blue leaders and 
analysts, with their deep suspicions and inveterate 
skepticism of Chen, are seeing a shift and even urging the 
U.S. to help reinforce this positive direction, suggests 
there is more than just the wishful thinking of Chen,s 
moderate supporters.  KMT legislator Su Chi and Blue-leaning 
commentator Emile Sheng separately told AIT that Chen 
Shui-bian,s behavior had significantly changed in recent 
months, but expressed concern that hard line DPP independence 
advocates might undermine Chen,s current stance. 
 
13. (C) It would, however, be premature to pronounce Chen 
Shui-bian a changed man, suddenly turned practitioner of the 
Golden Mean.  Pronouncements of Chen change have been legion 
and usually turn out to be nothing more than a brief hiccup. 
Certainly, Chen,s heart lies elsewhere, and he would love 
nothing better than to be the George Washington to a 
&Republic of Taiwan.8  However, Chen,s situation itself 
has altered, necessitating a shift in tactics and, perhaps, 
policy.   Perhaps the December 11 election and numerous 
public opinion polls brought home to Chen the fact that a 
solid majority of Taiwan voters prefer the status quo over 
moves toward independence or unification.  Mainland China,s 
detested Anti-Secession Law, spelling out in black and white 
the consequences for independence, moreover, completed the 
box in which Chen must now live and govern. 
 
14. (C) These changed conditions have produced a Chen who is 
willing, at least for the time being, to pursue development 
of cross-Strait relations if and when the present 
Anti-Secession Law imbroglio can be surmounted.   The 
longevity of Chen moderation will depend entirely on its 
fruitfulness.  If cross-Strait relations can be stabilized 
around a status quo that many in Taiwan term &de facto 
independence,8 then Chen just might begin to secure his 
quest for a legacy.  It will not likely bring him the Nobel 
Peace Prize that some of his moderate supporters 
half-jokingly envision, but it would be the long-term 
&status quo8 that most Taiwan people support. 
 
15. (C) Close Chen aides tell AIT that the LY election 
setback has forced the President to postpone his second term 
agenda, including constitutional reform, by 12-18 months in 
order to give him time to regain full control of the 
political agenda.  Given Chen's leadership style and track 
record in office, his actions in the current period are 
likely motivated more by the tactical objective of regaining 
his first term momentum than any long-term shift in policy 
priorities.  Chen may appear to be weakened by the December 
LY election setback, but in reality he is in a stronger 
position now than he was during the immediate fallout from 
the LY's attempt to impeach him over the Fourth Nuclear Power 
Plant in 2001.  In 2001, Chen convened the Economic 
Development Advisory Council (EDAC) to co-opt, and ultimately 
undermine, the Pan-Blue's perceived strength on cross-Strait 
issues.  Chen's cross-Strait policy moves and cohabitation 
arrangement with the PFP appear to be in this same mold. 
Then, just as now, Chen tugged on internal contradictions 
among his political opponents to effectively drive the policy 
agenda, despite lacking a majority in the legislature.  In 
2001, Chen maintained a moderate course for nearly a year, 
before he reverted to a hardline stance on cross-Strait 
relations that ultimately won him the 2004 election. 
 
16.  Now, as then, it is clear Chen has changed, at least for 
the moment.  How long that change lasts may depend as much on 
external circumstance, including U.S. actions, as it does on 
any change of heart. 
PAAL