US embassy cable - 05TAIPEI2076

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002076 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, PINR, CH, TW 
SUBJECT: PRESIDENT CHEN TRIES TO BALANCE CONFLICTING 
PRESSURES 
 
REF: A. TAIPEI 1968 
     B. BEIJING 7154 
     C. TAIPEI 2066 
     D. TAIPEI 1977 
     E. TAIPEI 2001 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: Over the weekend, President Chen Shui-bian 
moved dramatically to address discontent within his 
Democratic Progressive Party (DPP) base over his stance on 
recent Pan-Blue contacts with Beijing.  DPP anger is not 
limited to Chen's endorsement of Lien Chan's recent visit, 
but is also driven by concern that Chen will be pressured 
into making concessions toward Beijing detrimental to Taiwan 
interests.  The DPP's performance in the May 14 National 
Assembly (NA) election may determine whether Chen can bring 
his party behind his policy of reconciliation with the 
opposition and Beijing.  In order to stave off a major DPP 
setback while keeping the door open to cross-party 
reconciliation after the NA election, Chen has attempted to 
balance his soft line on the substance of the Pan-Blue visits 
with criticism over public statements made by Lien Chan and 
James Soong on the Mainland.  Chen has also publicly 
admonished major figures in his own Pan-Green camp over their 
failure to appreciate and support his policy course.  At the 
same time, Chen has leveraged USG statements of support to 
bolster his moderate policy line.  Chen aides say the 
President will resist pressure from either camp to adjust the 
substance of the government's policies.  However, if Chen's 
balancing act fails, he could soon find himself without the 
political means to pursue his government's policy objectives, 
either in the cross-Strait arena or on domestic policy.  End 
Summary. 
 
Chen's Challenge 
---------------- 
 
2. (C) DPP officials were dismayed by KMT Chairman Lien 
Chan's decision to visit the PRC in the immediate aftermath 
of the Anti-Secession Law (ASL).  DPP leaders of all stripes 
publicly denounced Lien for serving as a tool for PRC 
propaganda and privately bemoaned that Lien's trip would 
undermine international support for Taiwan in the wake of the 
ASL.  Even moderate DPP figures expressed genuine anger with 
Lien's speech at Beijing University (Refs A and B), 
particularly his criticism over Taiwan's democratic 
institutions and political leadership.  In the lead-up to 
Lien's visit, President Chen Shui-bian had set the tone for 
Pan-Green critics.  Thus, Chen's subsequent decision to 
endorse the Lien visit and later declaration that Lien's 
"five point" joint statement with Hu Jintao did not violate 
Taiwan law came as a shock to the Pan-Green base, leading to 
confusion over the President's policies and objectives. 
 
3. (C) In the wake of Chen's reversal, many DPP officials 
expressed fear that Chen, either voluntarily or under 
external pressure, might jump on the PRC bandwagon by 
compromising on what they perceive as core Taiwan interests. 
Veteran DPP legislator Hong Chi-chang, normally among the 
most pro-reconciliation politicians in the party, expressed 
concern to AIT that Chen's lack of political principles and 
thirst for public attention will encourage him to seek a 
"breakthrough" with Beijing, regardless of the long-term cost 
to Taiwan's interests.  DPP Deputy Secretary General Yen 
Wan-ching told AIT that such suspicions are fueled by the 
fact that Chen shares his thinking with only a handful of 
aides in the National Security Council (NSC) and Presidential 
Office, leaving the rest of his party to divine his 
intentions based on often conflicting public statements. 
 
4. (C) DPP officials are also concerned that Chen's 
positioning has left the party vulnerable to a major setback 
during the May 14 National Assembly (NA) election (Ref C). 
With core Pan-Blue voters expected to be energized by the 
Lien/Soong visits and core Pan-Green voters tempted by the 
Taiwan Solidarity Union's (TSU) unambiguous condemnation of 
Lien and Soong (and, increasingly, of Chen), the DPP may find 
itself holding the middle in an election where most centrist 
voters stay at home.  DPP officials have warned Chen that 
plummeting DPP polling numbers are directly related to the 
President's ambiguous position on the Lien/Soong visits.  An 
informal sampling of DPP supporters in Taichung County in 
central Taiwan found widespread discontent with Chen's 
position on the Pan-Blue visits, with most of those 
interviewed telling AIT they will cast ballots for the TSU as 
a protest to Chen's moderation. 
Chen's Response: Attack on All Fronts 
------------------------------------- 
 
5. (C) Recognizing the threat to his policy course, President 
Chen has moved to quell internal criticism and build support 
for his plans to reach out to the two Pan-Blue leaders after 
May 14.  On May 6, Chen convened a televised meeting in which 
he demanded senior DPP party, local government, and 
legislative leaders defend his policy of reconciliation and 
scolded party leaders for failing to explain his policies to 
the public (Ref D).  Chen used a two-hour television 
interview on May 8 to defend his position on the Lien/Soong 
visits directly to the public.  Chen aides say a second 
pre-recorded installment of the interview to be broadcast on 
the evening of May 9 will include a strong response to 
attacks from former President Lee Teng-hui.  Presidential 
Office Deputy Secretary General James Huang told AIT on May 6 
that Chen's highest priority now is to quiet Pan-Green 
discontent, for fear that major defections from the DPP to 
the TSU on May 14 could complicate the President's efforts to 
build a centrist base for his policies.  DPP Legislator Tsai 
Chi-chang told AIT on May 9 that Chen's recent explanations 
have mollified "about 50 percent" of the party, but asserted 
that more would need to be done to convince the party's voter 
base that he is not simply reacting to external pressures. 
 
6. (C) In crafting his message to the DPP's voter base, Chen 
has tried to walk a fine, if erratic, line between 
acknowledging Pan-Green anger over the Lien/Soong visits 
while defending his outreach to both the opposition and 
Beijing.  On May 6, Chen coined a new mantra of "criticize 
actions, not people" (dui shi, budui ren) to define his 
attacks on the Pan-Blue leadership.  After offering this 
mantra, Chen rebuked both Lien and Soong personally for 
declaring that independence is "not an option" for Taiwan's 
future.  Chen has been especially critical of Lien's 
suggestion of a KMT-CCP "united front" against Taiwan 
independence and his use of the April 29 Beijing University 
speech to criticize Taiwan's democratic institutions. 
However, Chen continues to defend his position that Lien's 
meeting with Hu Jintao was conducted in the proper manner and 
did not undermine Chen's own authority.  Chen has also 
responded to suspicion over his own motives, asserting that 
his shift towards reconciliation is in reaction to political 
realities and not part of an effort to "win a Nobel peace 
prize" at any cost. 
 
USG Key 
------- 
 
7. (C) DPP officials say that USG support remains one of 
Chen's few trump cards in defense of his moderate positions 
from critics on both sides.  The Presidential Office's Huang 
told AIT that President Bush's phone call to Hu Jintao 
provided a major boost to Chen's efforts to quell Pan-Green 
discontent over his policies.  On May 8, Chen hailed the 
Bush-Hu phone call, terming it a significant endorsement of 
Taiwan's democratic institutions.  However, the KMT has also 
continued to claim USG support for its position over Chen's. 
On May 6, the KMT released reports that President Bush 
conveyed to Lien his personal endorsement over Lien's recent 
PRC visit.  KMT Legislator Su Chi told the media the same day 
that the USG has continued to pressure Chen to endorse KMT 
overtures, including by threatening to withhold permission to 
transit the United States.  The DPP's Tsai told AIT that many 
in the party suspect that Chen's endorsement of Lien's visit 
was the result of U.S. pressure. 
 
Game Plan: Consolidate, then Negotiate 
-------------------------------------- 
 
8. (C) Chen aides say that while the President will try to 
balance conflicting pressures from the Pan-Blue and DPP 
fundamentalists, he will offer no major substantive 
concessions to either side even if the DPP loses the NA 
election or the KMT backs out of the proposed Chen-Lien 
meeting in response to Chen's recent attacks.  NSC Senior 
Advisor for cross-Strait policy Chen Chung-hsin told AIT that 
the government has formulated a three-point "bottom line," 
which it has conveyed to the PRC through its own indirect 
channels: 
1) Taipei is willing to facilitate Beijing's offer over 
tourism and agriculture, but if the PRC is serious about 
easing tensions, it should respond to Taipei's offer over to 
establish direct cargo flights.  The government will not 
block the panda initiative, but Beijing should deal directly 
with local Taiwan jurisdictions equipped to accept the gift. 
 
2) The President will not be forced by Beijing or the 
Pan-Blue into accepting the "1992 consensus" or "one China." 
The President has worked hard to build a DPP consensus behind 
the "Republic of China," and offered substantial flexibility 
in his "results of the 1992 Hong Kong talks" formulation. 
Taipei is willing to engage in dialogue with Beijing on any 
subject, but if the PRC is intent on setting preconditions 
for talks, Beijing will need to take the next step towards 
finessing the "1992" impasse. 
 
3) The government's patience for PRC dialogue with opposition 
parties is not unlimited.  If the PRC continues to limit its 
interaction to the Pan-Blue parties while ignoring the DPP 
government, Taipei will reassess its conciliatory position. 
 
Comment: Chen's High-Wire Act 
----------------------------- 
 
9. (C) It is too early to assess whether Chen can 
successfully mollify his Pan-Green base without undermining 
prospects for cross-party reconciliation after the NA 
election.  Chen's May 8 attacks on Lien's Beijing University 
speech and allegation that Soong cut a deal in January with 
the PRC to derail constitutional amendments in the NA have 
provoked warnings from Pan-Blue officials over a new chill in 
ruling-opposition relations.  While senior DPP officials have 
fallen into line after Chen's public rebuke on May 6, 
fissures within the party could quickly re-emerge if the 
party suffers a major setback in the NA election. 
 
10. (C) Chen appears adamant about resisting pressure from 
Beijing and the Pan-Blue to accept "one China" and from 
Pan-Green fundamentalists to freeze cross-Strait substantive 
interactions.  The risk appears to be less that Chen will be 
forced to alter his fundamental policy course than that 
internal discord and Chen's own sharp rhetoric could make it 
impossible to achieve the government's policy objectives, be 
they in the cross-Strait arena or on domestic issues.  USG 
statements in support of a government-to-government dialogue 
across the Taiwan Strait have helped ease political frictions 
inside Taiwan on both sides of the Blue-Green.  Public and 
private statements from U.S. officials in support of a calm 
dialogue among Taiwan's political leaders should also help 
maintain momentum towards cross-party reconciliation after 
May 14, a key ingredient to any movement on the Special 
Defense Procurement Budget during the current legislative 
session (Ref E). 
PAAL