US embassy cable - 05TAIPEI1438

S E C R E T SECTION 01 OF 02 TAIPEI 001438 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, PINR, CH, TW, Cross Strait Economics, Cross Strait Politics 
SUBJECT: BEIJING PRESSURES PRO-DPP BUSINESS LEADER TO 
ENDORSE "ONE CHINA" 
 
REF: TAIPEI 1403 
 
Classified By: AIT Deputy Director David J. Keegan, Reason: 1.4 (B/D) 
 
1. (S) Summary: Long-time pro-DPP business leader Hsu 
Wen-lung penned a letter to a Taiwan newspaper on March 26 
endorsing the PRC's position on "one China."  Hsu's move was 
widely interpreted by the media and political world as a sign 
of mounting PRC pressure on Taiwan business leaders. 
Presidential Office Deputy Secretary General James Huang told 
AIT that Hsu informed President Chen Shui-bian before hand 
that he was going to issue the letter.  Taiwan officials say 
that Hsu's letter was the most prominent of a series of 
statements that Beijing pressured various Taiwan business and 
student leaders to make in the lead-up to the March 26 rally. 
 While the Mainland Affairs Council (MAC) interprets the 
PRC's actions as targeted at the March 26 event, President 
Chen and his advisors appear to see the episode as a 
harbinger of further moves aimed at isolating the DPP 
government.  End Summary. 
 
Green on Red 
------------ 
 
2. (SBU) Chi-mei Corporation founder and long-time Democratic 
Progressive Party (DPP) supporter Hsu Wen-lung took out a 
prominent ad in the Economic Daily News (owned by the 
pro-opposition United Daily News group) endorsing the PRC's 
"one China" policy.  Hsu wrote in the article that his past 
support for President Chen was based on the DPP's commitment 
to economic reform and not its pro-independence ideology. 
Hsu went on to state that it was his view that "the Mainland 
and Taiwan both belong to one China," borrowing word-for-word 
language used in the PRC's 16th Party Congress Work Report on 
Taiwan.  The Chi-mei corporation has major high-tech 
investments on the Mainland and was reportedly the target of 
PRC harassment after the March 20, 2004 presidential 
election.  The Tainan-based Hsu has been the most prominent 
business supporter of the Chen government.  Hsu's money 
funded the creation of the pro-DPP Taiwan Think Tank.  Hsu 
has told AIT privately that he personally favors Taiwan 
independence, but acknowledges that this is impossible under 
current conditions. 
 
PRC Manipulation 
---------------- 
 
3. (S) Most media outlets and political observers attributed 
Hsu's sudden public embrace of "one China" to PRC pressure on 
Chi-mei's Mainland interests.  Presidential Office Deputy 
Secretary General James Huang told AIT on March 28 that Hsu 
 
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informed President Chen before hand the letter would be 
published on the day the President was to join a mass rally 
to protest the Anti-Secession Law.  Although Huang was 
clearly reluctant to provide details of the conversation, he 
made it clear that he had no doubt that the PRC determined 
both the timing and the content of Hsu's article.  MAC Chief 
Secretary Jan Jyh-horng told AIT that PRC officials pressured 
 
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a number of Taiwan student and business association leaders 
on the Mainland to make similar statements in the days 
leading up to the March 26 rally, with Hsu being the most 
prominent.  Jan said that Taipei had firm information that 
Hsu resisted Beijing's original demand that he personally 
endorse "one China" in public.  Instead, according to Jan, 
the two sides settled on having Hsu sign the March 26 article 
for the Economic Daily. 
 
4. (C) Political leaders reacted sympathetically to Hsu's 
plight, with former President Lee Teng-hui saying he had no 
choice but to show "understanding" for Hsu's decision to pen 
the article.  KMT Chairman Lien Chan praised Hsu on March 27 
for his "courage in expressing what he really feels in his 
heart."  MAC issued a press release on March 28 condemning 
Beijing for extorting Taiwan business leaders, including Hsu, 
into publishing articles in support of the Anti-Secession 
Law.  MAC's Jan said the release was aimed at protecting Hsu 
from criticism from Pan-Green supporters of selling out 
Taiwan. 
 
Isolated Incident or First Shot in New Campaign 
--------------------------------------------- -- 
 
5. (C) The Presidential Office's Huang said that senior 
leadership in Taipei views the Hsu episode as part of a 
coordinated campaign by Beijing to isolate the Chen 
administration (Septel).   However, MAC's Jan offered a less 
bleak assessment, noting that PRC statements and actions 
seemed to be aimed primarily at undermining attendance at the 
March 26 mass rally in Taipei.  Jan noted that PRC public 
statements in the days following the march were considerably 
milder than in the lead-up to the event.  He stated that the 
next key indicator of whether Beijing is preparing to keep up 
the drum beat on the Anti-Secession Law will be the PRC State 
Council Taiwan Affairs Office press conference on March 30. 
 
Comment: Can Taipei Hold Its Course? 
------------------------------------ 
 
6. (C) One key assumption behind Taipei's plan to use the 
March 26 rally to bring Taiwan anger over the Anti-Secession 
Law to closure was that the PRC would avoid further actions 
that would exacerbate negative feelings in Taiwan (Reftel). 
The Hsu letter may have been one of those very actions. 
While it is too early to assess the full impact of Beijing's 
manipulations on the Taiwan public and business community, 
President Chen and his senior aides appear to have already 
concluded that the action was made in bad faith.  To this 
day, DPP officials cite the PRC's diplomatic snub over Nauru 
on July 15, 2002 -- the day Chen assumed the chairmanship of 
the DPP -- as the start of the destabilizing spiral in 
cross-Strait relations.  The recent international boost Chen 
has gained from his skillful handling of the Anti-Secession 
Law may suffice to avoid a repeat of that experience. 
However, the Hsu episode may significantly slow the process 
of resuming positive cross-Strait contacts. 
PAAL