US embassy cable - 05TAIPEI1849

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001849 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 04/20/2015 
TAGS: MARR, MASS, PGOV, PREL, TW 
SUBJECT: SOONG ON SPECIAL BUDGET AND UPCOMING PRC VISIT 
 
Classified By: AIT Director Douglas Paal, Reason(s): 1.4 (B/D) 
 
1. (C) Summary:  In an April 19 meeting with the AIT 
Director, People First Party (PFP) Chairman James Soong said 
his party would allow the USD 18 billion Special Defense 
Budget to pass at the end of the current Legislative Yuan 
session in late May/early June despite lingering doubts over 
portions of the package.  He also said that the PFP would 
continue to negotiate to reduce the numbers of certain weapon 
systems and the overall cost of the package.  Soong outlined 
for the Director the guidelines under which he would visit 
the PRC early next month.  He recognized that as an 
opposition party leader, he had no right to negotiate on 
behalf of Taiwan.  While asserting that he will not serve as 
Chen Shui-bian's proxy in dealing with the PRC, Soong said 
the "Ten Point Consensus" that he reached with Chen during 
their February 24 meeting will serve as the basis of his 
talks with PRC leaders.  Soong added that he will keep 
President Chen informed of the details of his visit.  End 
Summary. 
 
Action on the Special Budget 
---------------------------- 
 
2. (C) In an April 19 meeting, People First Party (PFP) 
Chairman James Soong told the AIT Director that his party 
will allow the USD 18 billion Special Defense Budget to pass 
at the end of the current Legislative Yuan session in late 
May/early June.  Soong asserted his commitment to ensure that 
Taiwan has the capability to defend itself and to acquire 
weapons in order to achieve this goal.  He said that U.S. 
officials in Washington had told him that passage of the 
Special Budget has become an important gesture to show the 
world that Taiwan has the will and desire to defend itself. 
 
3. (C) Soong continued, however, that he had reservations 
about portions of the Special Budget package presented by the 
Taiwan Ministry of National Defense (MND).  He complained 
that the MND had misled the Taiwan public by not revealing 
that it was the MND, not the USG, that has pushed for the 
purchase of the eight submarines in the package.  Soong said 
it was his understanding that the current package, especially 
the submarine program, did not have the endorsement of the 
U.S. defense establishment and experts.  The Director 
reminded Soong that items in the Special Budget package were 
requested by the Pan-Blue leadership, not the USG, before the 
2000 election.  The Director noted that these systems were 
chosen as priorities through a consultative process between 
the U.S. and Taiwan based on Taiwan's defense needs.  The 
Director urged Soong not only to support the current Special 
Budget package, but also to back future MND budget requests 
to build-up Taiwan's stock of critical ammunition. 
 
4. (C) Soong said that the PFP would continue to negotiate to 
reduce the numbers of certain weapon systems and the overall 
cost of the package.  He complained that the KMT has been 
spreading rumors that he had yielded to U.S. pressure to 
abandon his reservations about the Special Budget.  The 
PAC-III missiles, he noted, are his personal priority.  Soong 
also expressed support for the acquisition of P-3Cs and other 
advanced weapons systems that would give Taiwan an 
anti-submarine defense capability.  He said that while he 
does not rule out the possibility of buying submarines, the 
timing for this "is not ideal."  Contrary to popular 
perceptions, he added, PFP does not advocate an indigenous 
submarine building program. 
 
5. (C) Soong stated that Taiwan should not resort to a 
military solution to resolve its problems with the PRC.  The 
Director replied that a strong military reduces the 
likelihood that Beijing would seek a military solution. 
Taiwan, he continued, would gain more at the bargaining table 
if it enters into negotiations with the PRC from a position 
of military strength. 
 
Upcoming Visit to the PRC 
------------------------- 
 
6. (C) Soong also outlined for the Director the guidelines 
under which he would visit the PRC early next month.  He 
stressed that the United States was Taiwan's most important 
friend and without its support, Taiwan would not be able to 
deal with the PRC.  Soong said he understands the firm U.S. 
positions regarding the "one China" policy, opposing Taiwan 
independence, and opposing unilateral changes in the status 
quo.  Those were, he noted, his fundamental positions as well. 
 
7. (C) While asserting that he will not serve as Chen 
Shui-bian's proxy in dealing with the PRC, Soong told the 
Director that the "Ten Point Consensus" he reached with Chen 
during their February 24 meeting will serve as the basis of 
his talks with PRC leaders.  Soong said that he fully 
understands that as an opposition party leader, he must 
respect the Presidential Office and accept that negotiation 
with the PRC must involve the Executive branch.  Recognizing 
U.S. regional security concerns, Soong assured the Director 
that his meetings with the PRC will not tilt the strategic 
balance of power toward the PRC or undermine Taiwan's 
democratic institutions.  (Note:  Presidential Office Deputy 
Secretary General James Huang told the press on April 19 that 
 
SIPDIS 
while Soong would not serve as President Chen's "envoy," 
Taipei would have no objection if Soong discusses the 
Chen-Soong "Ten Point Consensus" with Beijing authorities. 
End note.) 
 
8. (C) Noting that the first Chen-Soong meeting had drawn 
criticism from their respective voter base, Soong told the 
Director that while the two parties will maintain informal 
low key contacts he does not want a second public meeting 
with Chen Shui-bian.  Quoting a Chinese proverb, "We stick 
together but not too close," Soong said that through 
discussions between PFP Secretary General Chin Ching-sheng 
and Presidential Office Secretary General Yu Shyi-kun, Chen 
will know exactly what he intends to say to the PRC. 
 
9. (C) Soong said that he has not had time to formulate a 
concrete agenda or to work out the details of his visits. 
Broadly speaking, Soong said he hoped to negotiate some 
formula under which the PRC government could have direct 
talks with its Taiwan counterpart.  Soong suggested that 
Chen's "Five Noes" and the KMT's "1992 Consensus" might be 
possible options.  Soong argued that the "1992 Consensus" had 
already reaped some fruitful results in the past.  He said it 
might be reworded to render it acceptable to all sides.  He 
gave particular emphasis to using the August 1, 1992 National 
Unification Council statement on the meaning of "one China" 
as a basis for direct talks.  In addition, Soong said he 
hoped to urge Beijing to support World Health Assembly (WHA) 
observership for Taiwan and concessions for Taiwan business 
people working in the PRC. 
 
Comment: Can He Deliver? 
------------------------ 
 
10. (C) Soong's commitment to early action on the Special 
Defense Budget is encouraging, but the question remains 
whether he will be able to convince enough of his party to go 
along.  Soong's invitation to Beijing could offer an 
opportunity to rally his increasingly disaffected political 
base.  If handled correctly, Soong may be able to convince 
his followers that his unpopular cohabitation agreement with 
Chen Shui-bian was worth the effort.  However, Soong has 
promised more than he has delivered on defense spending many 
times before.  Soong's equivocation over the details of the 
budget package could leave him an out if members of his party 
caucus like Nelson Ku attempt to sabotage the budget as they 
have in the past. 
PAAL