US embassy cable - 05TAIPEI2164

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002164 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, PINR, CH, TW, Cross Strait Politics 
SUBJECT: CHEN ADMINISTRATION DISAPPOINTED BY SOONG-HU 
MEETING, POLICY UNCHANGED 
 
REF: A. BEIJING 7503 
     B. TAIPEI 2126 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: President Chen Shui-bian publicly rejected 
People First Party (PFP) James Soong's "two sides, one China" 
formulation, announced following Soong's May 12 meeting with 
PRC leader Hu Jintao.  National Security Council (NSC) 
Secretary General Chiou I-jen told the AIT Director on May 13 
 
SIPDIS 
that the government views Soong's formula as much worse than 
the KMT's "one China, different interpretations."  Chiou 
attributed the President's strong response to Soong's 
announcement to deep disappointment on Chen's part that Soong 
not only failed to make progress towards breaking the "1992" 
deadlock, but may have complicated future efforts to achieve 
a domestic and cross-Strait consensus behind negotiations on 
the basis of the "Republic of China."  Chiou said the May 12 
joint PRC-PFP press statement has also led Taipei to conclude 
that Beijing is committed to isolating the Chen 
administration, at least for the next several months.  That 
said, Chiou stated that in the coming week, Taipei will offer 
to open talks with Beijing on agricultural, transportation, 
and tourism.  The President also plans to proceed with 
meetings with both Soong and KMT Chairman Lien Chan to work 
towards a domestic consensus on cross-Strait and domestic 
policy.  End Summary. 
 
Dashed Expectations 
------------------- 
 
2. (C) Senior Chen administration officials expressed deep 
disappointment over the outcome of PFP Chairman James Soong's 
May 12 meeting with PRC President Hu Jintao (Ref A).  During 
a TV interview on May 12, President Chen rejected Soong's 
formulation of "two sides, one China" (Liangan Yizhong) and 
expressed regret that the PRC failed to offer any new 
flexibility during meetings with the PFP Chairman.  While the 
Presidential Office had originally planned not to respond to 
a Soong endorsement of the "1992 consensus," (Ref B), NSC 
Secretary General Chiou I-jen told the Director on May 13 
 
SIPDIS 
that Soong's new formulation went beyond the government's 
worst case scenarios for the Soong-Hu meeting.  Chiou said 
that Chen's decision to respond so quickly to Soong's new 
formulation was in part motivated by electoral politics, but 
was primarily a reflection of his personal disappointment 
over Soong's performance. 
 
3. (C) Chiou said that Chen had also expected Soong to do a 
better job than Lien at conveying the Chen administration's 
position on cross-Strait relations.  Instead, Chiou said that 
Soong did more damage to Taipei's position than Lien did. 
"We can accept (the KMT's) 'one China, different 
interpretations,' since it leaves room for the 'Republic of 
China,'" Chiou stated, "but we were unhappy with Soong's new 
formula and his public rejection in Xian of 'two Chinas.'" 
Chiou said that PFP Secretary General Chin Ching-sheng called 
Presidential Office SecGen Yu Shyi-kun after the May 12 press 
conference, but only conveyed what was already in the press. 
Chiou added that the government will try to get a full 
briefing from the PFP over Soong's private discussions with 
Hu after Soong's return on May 13. 
 
Proof of Darker Motives? 
------------------------ 
 
4. (C) Chiou said that the government's assessment in the 
wake of the Lien/Soong visits is that Beijing is planning to 
continue to isolate the Chen government at least until the 
Autumn in order to see how much further they can erode the 
President's political support base.  If Chen manages to keep 
in control, Chiou hypothesized, then Beijing may decide it 
will talk to him.  If the government is forced to cede 
cross-Strait policy to the opposition, Chiou continued, then 
there would be little reason for Beijing to explore a 
dialogue with the government in Taipei.  Chiou noted that 
Pan-Blue legislators are already demanding that cabinet 
ministers implement agreements their leaders reached in the 
PRC.  NSC Senior Advisor for cross-Strait affairs Chen 
Chung-hsin commented separately that the PRC's agreement with 
both the KMT and PFP to establish a regularized dialogue 
between Beijing and the two parties could indicate a 
long-term decision to conduct all communications with the 
Pan-Blue.  Chen warned that the Democratic Progressive Party 
(DPP) administration will not accept a situation where the 
Pan-Blue strikes deals with Beijing, then uses its 
legislative majority to demand the government implement them. 
 
5. (C) KMT Vice Chairman and LY President Wang Jin-pyng 
offered a similar assessment over PRC motives.  Wang assessed 
that Beijing used the Soong visit to drive a wedge between 
the PFP and the DPP while encouraging the Pan-Blue to 
solidify its LY majority.  Wang told the AIT Director that 
Beijing may eventually deal with Chen, but only when they are 
confident that they hold all the cards in the relationship. 
(Comment: More surprisingly given his reputation as a 
statesman, Wang asserted that the KMT is likely to cooperate 
with PRC "united front" tactics, since they offer the KMT an 
opportunity to steal key DPP constituencies such as farmers, 
Septel.  End Comment.) 
 
Keeping Open Options 
-------------------- 
 
6. (C) Despite Taipei's renewed concerns over a PRC "united 
front" offensive, Chiou told AIT that the government would 
maintain a positive tone in dealings with Beijing.  Chiou 
said that relevant cabinet ministers would publicly announce 
next week that Taipei is prepared to engage in technical 
discussions with Beijing over PRC offers to Lien and Soong on 
agriculture, tourism, and transportation links.  Chiou noted 
that the Council of Agriculture (COA) will link the opening 
of the Mainland fruit market with talks on direct cargo 
flights, noting that fruit like lychees spoil too quickly to 
be exported by ship.  The NSC's Chen expressed regret that 
Beijing's offer to use the "Lunar New Year charter" model to 
negotiate cargo flights was listed in the Soong-Hu "Six 
Points" as coming only after negotiations over the more 
complicated subject of passenger flights.  Chen asserted that 
if Beijing were to agree to Taipei's offer to talk about 
direct cargo flights, "everyone from the President on down 
would be convinced that the PRC is sincere in reaching out to 
Taipei." 
 
7. (C) Chiou told the Director that the President is unlikely 
to make any major cross-Strait policy statements in the 
coming weeks in order to work on building a domestic 
consensus on cross-Strait and other policies.  Chiou insisted 
that Chen will not waver in his commitment to seek 
reconciliation with Beijing in his second term, regardless of 
actions by the PRC or opposition leaders.  Chiou cited four 
factors that underlined Chen's support for cross-Strait 
engagement: 1) Chen himself decided to pursue this course 
only after a long period of reflection; 2) Chen sees 
cross-Strait stability as a legacy issue; 3) the December 
2004 election left Chen no other options; 4) USG support and 
encouragement.  Chiou noted that this last factor has been 
especially crucial in defending the President's centrist 
policy line from both the opposition and from Pan-Green 
fundamentalists.  Chiou said Taipei welcomed the USG's recent 
statements encouraging Beijing to engage with the Chen 
administration.  Chiou noted that if Hu Jintao were to offer 
contacts on either "high politics" -- finessing the "1992" 
deadlock -- or on technical issues like transportation and 
trade, Taipei will respond immediately. 
 
Comment: A Hiccup, Not a Derailment 
----------------------------------- 
 
8. (C) Chen's quick and public rejection of the results of 
the May 12 Soong-Hu meeting appears to have been more a 
matter of personal pique than a shift in policy direction. 
Chen officials may have set overly optimistic goals for 
Soong's meetings, and may now be drawing overly pessimistic 
conclusions over Beijing's next steps.  Nevertheless, we are 
encouraged by Chen's continued commitment to seeking 
engagement with Beijing, be it over technical or political 
subjects.  AIT will continue to press Chen and his government 
to probe the PRC for new opportunities and will urge Pan-Blue 
leaders to resist the temptation to exploit PRC contacts for 
domestic purposes.  Sustained public and private messages 
over our expectations that Beijing will reach out to the Chen 
government should also help set a positive atmosphere for 
reconciliation, both within Taiwan and across the Strait. 
PAAL