US embassy cable - 05TAIPEI1826

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 001826 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 04/18/2015 
TAGS: PGOV, PREL, TW 
SUBJECT: CHEN SHUI-BIAN: SURPRISES AHEAD? 
 
REF: A. TAIPEI 1407 
     B. TAIPEI 1438 
     C. TAIPEI 1625 
     D. TAIPEI 1684 
     E. TAIPEI 1437 
     F. 2004 TAIPEI 3807 
 
Classified By: AIT Director Douglas H. Paal, Reason 1.4 (b/d) 
 
1.  (C) Summary.  The moderate "presidential" persona that 
President Chen Shui-bian has cultivated for the past four 
months masks a hard driving political tactician who continues 
to work backstage to destroy the opposition Pan-Blue majority 
coalition.  The &reconciliation8 agenda of this moderate 
Chen is in sharp contrast to the historical Chen, who for 
four years pushed Taiwan to the limits on constitutional 
revision, name change, and referenda, greatly exacerbating 
cross-Strait tensions with Mainland China.  Chen, moreover, 
has shown himself to have a penchant for surprise.  This 
report discusses some of the possibilities for Chen surprises 
and the tools with which he could reassert his more hardline 
agenda, given the current state of opposition fragmentation 
and renewed pressure from Mainland China.  End Summary. 
 
Controlling Cross-Strait Agenda 
------------------------------- 
 
2.  (C) Following his Democratic Progressive Party (DPP) 
setback in the December 2004 Legislative Yuan (LY) election, 
President Chen Shui-bian wrapped himself in a "presidential" 
mantle emphasizing "reconciliation and coexistence8 in 
Taiwan domestic politics and cross-Strait relations.  Behind 
this more moderate facade, however, Chen continued his 
political maneuvering, deftly manipulating People First Party 
(PFP) Chairman James Soong to fragment the Pan-Blue 
coalition, and consolidating his Pan-Green coalition with the 
March 26 &million-person8 protest against Beijing,s 
Anti-Secession Law that mollified his &deep-Green8 
independence flank. (Ref A) 
 
3.  (C) Over the past three weeks, however, Chen has faced an 
array of new challenges.  Mainland China,s coercion of 
long-time Chen supporters, notably Chi-mei founder Hsu 
Wen-lung and ex-Acer CEO Stan Shih, directly threatened 
Chen,s political base, and the high-visibility KMT visit to 
Beijing undercut Chen's hopes for taking control of the 
cross-Strait agenda (Refs B,C).  With Chen's options limited 
-- the LY election demonstrated lack of support for immediate 
independence and Beijing,s Anti-Secession Law clearly 
demarcated the permissible -- stabilizing and improving 
cross-Strait relations was Chen,s only realistic hope for 
establishing a presidential legacy.  (A variety of Taipei 
political operatives, both "Green" and "Blue," tell AIT that 
the search for a legacy is one of Chen's main goals for his 
final three years in office.)  The KMT cross-Strait 
initiative, however, threatened Chen,s option for pioneering 
a cross-Strait settlement and left him cornered, with little 
room to maneuver, and angry. 
 
Destabilizing Options 
--------------------- 
 
4.  (C) Moderate DPP and KMT supporters have expressed 
concern to AIT that a cornered Chen might revert to his old 
independence ways.  Chen, moreover, has shown himself to have 
a penchant for surprise and finding creative ways around 
political obstacles by veering suddenly in new policy 
directions.  Moderate DPP contacts tell AIT that they have 
worked hard to get Chen onto his current course and keep him 
there.  They -- and moderate Blue supporters -- express 
particular concern over a series of challenges that Chen,s 
current policy line will face in the months ahead and which 
could derail the moderate track Chen has been following since 
December. 
 
5.  (C) If Chen were to resort to his pro-independence roots, 
upcoming events and tools he might use to destabilize and 
push a hard line agenda include: 
 
-- May 14 National Assembly election:  The current atmosphere 
of distrust and anger in the Pan-Green camp, could stimulate 
Chen to return to fundamentalist pro-independence themes he 
employed in the presidential and legislative campaigns )- 
new constitution, name change, and referendum.  The 
government,s earlier decision not to respond to overtures 
from Beijing before May 14 (Ref E) indicates the importance 
the DPP places in those elections.  Nevertheless, the 
December LY election experience, which brought home to Chen 
the political limits of these themes, could serve as a 
cautionary note. 
 
-- December 5 mayor/county magistrate elections:   These 
local elections offer another venue for Chen and the DPP to 
resurrect some of the more provocative themes they adopted in 
the 2004 presidential and legislative elections.  Local 
elections in Taiwan, however, tend to focus largely on local 
issues and personalities, and are not readily conducive to 
such issues as cross-Strait relations and constitutional 
change.  Nonetheless, the December elections will give Chen a 
number of opportunities to speak to rallies of southern, deep 
Green supporters.  These venues have in the past led Chen 
into some of his most dramatic rhetorical excursions. 
 
-- Constitutional reform:  The push for Constitutional reform 
has been a constant through Chen,s first five years in 
office and a litmus test of &Green-ness.8   Chen's May 2004 
inaugural address renewed his campaign promise to establish a 
new constitution by 2008, but he promised not to change name, 
flag, territory or national anthem.  During the December 2004 
LY campaign, President Chen again pledged that the current 
constitution would be revised, with a referendum in 2006 and 
a "New Taiwan Constitution8 in 2008 (Ref F).  Since the LY 
elections, however, constitutional change, beyond the LY 
amendments passed last August, has been rarely mentioned. 
Chen did leave theoretical wriggle-room when he announced 
that he would not raise controversial issues but could not 
rule out others doing so.  If Chen does return to pushing 
constitutional change, however, he would still confront the 
requirement for 75 percent LY approval of any amendments 
beyond the August 23 legislative referendum reforms.  Any 
change not supported by the KMT is consequently dead on 
arrival. 
 
-- Name change:  While Premier Hsieh has downplayed the issue 
of changing the name of institutions from &China8 to 
&Taiwan,8 this is still a highly emotive theme that could 
be refurbished. 
 
-- Referendum:  The call for referendum, which has raised the 
temperature of cross-Strait relations in the past, would be 
even more destabilizing given the Anti-Secession Law.  After 
Taiwan officials briefly threatened to hold a "defensive 
referendum8 to counter the Anti-Secession Law, the 
referendum issue fell by the wayside in favor of the March 26 
&million person8 protest rally.  The May 14 election, 
however, is likely to be a competition for non-mainstream 
voters, raising the risk of TSU and PFP appeals to save their 
parties and offering a public platform for TSU and other 
pro-independence elements to press for a referendum.  Though 
Chen Shui-bian has not mentioned the referendum issue in 
recent weeks, the visceral anger he feels over the KMT visit 
and the coopting of Hsu, Shih and other DPP business leaders 
could bring him back to the referendum issue again. 
Nevertheless, this option will still be limited by the 
requirement that any referendum question must be approved by 
fifty percent of all eligible voters, a very high threshold 
that the Pan-Green camp would like to reduce, but with 
limited prospects. 
 
Comment: But the Landscape has Changed 
-------------------------------------- 
 
6.  (C) Despite Chen Shui-bian,s penchant for surprise and 
dramatic policy shifts, the political landscape of Taiwan has 
substantially altered in the past four months in ways that 
limit his options.  Expectations for another round of 
constitutional reform were dependent on the Pan-Green 
coalition winning a clear majority in the December LY 
elections, with the DPP setback effectively sidelining talk 
of constitutional reform.  While constitutional reform, name 
change, and referenda, could rear their heads if the 
situation continues to sour, the likelihood is not high, as 
Chen has apparently accepted the lessons of the December LY 
election, and the Anti-Secession Law has clearly demarcated 
the boundaries of the permissible, limiting Chen,s room for 
maneuver.  Moreover, the about-face of Hsu Wen-long and 
resignation of presidential advisor Stan Shih demonstrated at 
close range the changed political environment in Taiwan, a 
fact that Chen and supporters recognize, as evidenced by 
their low key response to both incidents. 
 
7.  (C) While Chen has succeeded in dividing the Pan-Blue 
coalition, the chances that he and the DPP might establish a 
workable LY majority are slim, and that they might then 
pursue a radical agenda nearly nought.  (On the contrary, 
there are nascent signs that Chen's divisive tactics could 
backfire and push the PFP back towards the Pan-Blue camp.) 
Rather, Chen,s very day-to-day governing will depend on his 
and Premier Frank Hsieh,s ability to repeatedly cobble 
together ad hoc, issue-by-issue majorities -- a process that 
will leave precious little time or political capital for 
pushing a hard line &Green8 agenda. 
PAAL