US embassy cable - 05TAIPEI2655

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002655 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, MARR, PINR, CH, TW, Cross Strait Politics 
SUBJECT: PRATAS ISLAND: TAIWAN'S STRATEGIC WEAKEST LINK? 
 
REF: TAIPEI 2433 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: The May 27 confrontation between Taiwan Coast 
Guard vessels and a suspected PRC research ship off the 
Taiwan-controlled Pratas Island has focused minds in the 
Taiwan government on the strategic risks associated with the 
disputed South China Sea island.  Given its location between 
Hong Kong, Taiwan, and the Philippines, Taiwan officials 
suspect that recent incursions by PRC fishing boats and 
research ships are part of an effort to assert control of the 
island and its facilities in order to project power into the 
Luzon and Taiwan Straits.  The Taiwan military completed its 
turnover of the facility on Pratas to the Taiwan Coast Guard 
in 2002, having deemed in 1999 that the island was 
undefendable from a dedicated PRC attack.  Since that time, 
the Taiwan Coast Guard has managed the island with little 
policy guidance from above.  The May 27 episode, however, has 
triggered a higher level policy review, led by National 
Security Council (NSC) Secretary General Chiou I-jen, over 
how to manage the Pratas issue.  Taipei is not prepared to 
cede the island to Beijing for fear it will be used as a base 
for future PLA naval activities, but officials are also 
cognizant of the danger that a possible incident between PRC 
vessels and the Taiwan Coast Guard, headed by anti-China 
hard-liner Syu Huei-you, could provoke an unanticipated 
cross-Strait crisis.  End Summary. 
 
The Island That Time, and Taiwan, Forgot 
---------------------------------------- 
 
2. (C) Located on the eastern edge of the South China Sea, 
200 nautical miles southeast of Hong Kong, Pratas Island has 
long presented a quandary for Taiwan's defense planners.  The 
island's remote location and topography were cited by the 
Ministry of National Defense (MND) in 1999 as reasons for 
withdrawing the Taiwan Marine Corps detachment that had 
traditionally taken responsibility for defending Taiwan's 
territorial claim in the area.  Even before the turnover, 
current and former Taiwan officials said that MND devoted few 
resources to the island's defense, providing the former 
1,000-man garrison with obsolete equipment and a dilapidated 
physical infrastructure.  By 2002, the Taiwan military had 
completed its turnover of the island's airstrip and port 
facilities to the Taiwan Coast Guard, which made modest 
upgrades to its defenses.  While the Ministry of Interior 
(MOI) put forward a proposal in 2003 to upgrade the island's 
port facilities in order to reinforce Taiwan's control over 
the island and its surrounding waters, the political 
leadership remained generally disengaged on the issue.  One 
Taiwan NSC official noted that the Executive Yuan's (EY) 
interagency "South Sea Task Force" which was charged with 
managing the government's Pratas policy had not held a single 
meeting since 2002. 
 
PRC Delivers a Wake-up Call 
--------------------------- 
 
3. (C) The Pratas issue was thrust back on to the front 
burner on May 27, when a Taiwan Coast Guard vessel threatened 
to board the PRC research vessel Feng-Dow No. 4 if it did not 
immediately depart from the waters off the Pratas Coast.  The 
May 27 incident came in the wake of a series of 
confrontations between the Taiwan Coast Guard detachment on 
Pratas and PRC research and fishing vessels operating in the 
area.  As early as February, the Coast Guard had scuffled 
with PRC fishermen attempting to construct a temporary 
shelter on the island.  Following that episode, officials 
tell AIT that up to 200 PRC fishing vessels tried to blockade 
the Coast Guard facility, ostensibly to protest Taiwan's 
refusal to allow PRC fishermen to land on the island during 
bad weather.  The confrontation with PRC fishing boats was 
followed up in April-May by a series of incursions by two PRC 
research ships, the Tan-Baw and Feng-Dow No. 4, both escorted 
by PRC fishing vessels. 
 
4. (C) While the Taiwan Coast Guard attempted to expel the 
PRC research vessels on several occasions between May 3 and 
the final confrontation on May 27, NSC officials say they 
were not informed of the problem until shortly before the 
Coast Guard's threat to board the Feng-Dow No. 4 on May 27. 
NSC Senior Advisor for Asian Affairs Lin Cheng-wei told AIT 
that Coast Guard Minister Syu Huei-you only informed NSC 
SecGen Chiou I-jen of the problem when he needed Chiou's help 
to press the Taiwan Navy to send reinforcements to the area 
(Reftel).  Lin said Chiou declined the request to dispatch 
naval vessels and warned Syu not to force a violent 
confrontation with the PRC vessels. 
 
Incident Forces Policy Review 
----------------------------- 
 
5. (C) Since the May 27 confrontation, there have been no 
further reports of encounters between Taiwan and PRC vessels 
in the area.  Nevertheless, officials say that the episode 
has sparked a major policy review over the risks that 
developments in the Pratas present to Taiwan's strategic and 
cross-Strait interests.  According to the NSC's Lin, Premier 
Frank Hsieh has agreed to dissolve the EY's South Sea Task 
Force and shift its responsibilities to the NSC.  Lin noted 
that Chiou is personally seized with the Pratas issue and 
will lead the inter-agency process, with Lin serving as the 
executive director.  Lin said the NSC will seek to exchange 
assessments of PRC actions in the region with the United 
States, Japan, and other interested parties.  He added that 
during talks with counterparts in Hanoi in early June, 
Vietnamese officials told Lin that they also have encountered 
more assertiveness from the PRC over disputed waters in the 
South China Sea, including one recent unpublicized incident 
that involved PRC vessels opening fire on Vietnamese 
fishermen that resulted in several fatalities. 
 
6. (C) Officials say the first challenge in formulating a new 
policy course on Pratas will be to gain an inter-agency 
consensus regarding the scope of the problem.  NSC Deputy 
SecGen Henry Ko told AIT that Taiwan (and, he claimed, Japan) 
assesses that the PRC may be seeking to use aggressive, but 
non-violent, measures to gradually push Taiwan personnel off 
the island to allow the PLA to use the island as a base of 
operations in the area.  The NSC's Lin noted that Pratas is 
well-positioned to control shipping lanes into both the 
Taiwan Strait and, more importantly, the Luzon Strait, 
through which much of Japan's trade with Southeast Asia and 
the Middle East flows.  Former NSC Deputy SecGen Chang 
Jung-feng noted that Beijing may wish to control the Pratas 
facility in order to provide its southern fleet, and 
especially its submarine force, greater room to operate 
undetected.  Following the reported early June accident 
involving a PRC Ming-class submarine near Pratas, Taiwan MND 
officials publicly touted the island's potential to monitor 
PLA Navy movements as part of its public campaign to win 
funding for procurement of P-3C anti-submarine aircraft. 
 
7. (C) Despite its attempts to link Pratas with PRC efforts in 
support of the Special Defense Procurement Budget, neither 
MND nor Chen administration senior policymakers appear 
willing to consider expanding the military role of the Pratas 
facilities.  The NSC's Lin noted that Taiwan is seeking a 
formula that will deny the PRC military control over the 
island base without increasing the risk of an unexpected 
maritime clash.  Lin assessed that Beijing's suspected 
efforts to use fishing and research vessels to change the 
facts on the ground are aided by the fact that the Taiwan and 
international media are barely aware of the island's 
existence.  To counter this, Lin said that Taiwan is 
considering ways to draw greater domestic and international 
attention to the Pratas region in a non-military context, 
perhaps by developing it as an environmental protection zone 
or as a model for tropical economic development.  However, 
Lin said that any such plan would not likely become 
operational for another 3-5 years, leaving open the potential 
for continued friction with PRC vessels. 
 
Lack of Coordination Presents Near-Term Risks 
--------------------------------------------- 
 
8. (C) NSC officials acknowledge the dangers in leaving 
operational decisions to the Taiwan Coast Guard, and are 
looking to increase internal coordination and oversight.  One 
immediate challenge facing Taiwan policymakers is the Coast 
Guard's awkward position within the Taiwan bureaucracy and 
the strong-willed personality of its leader, Syu.  The Coast 
Guard was created only in 1999 out of elements of the 
National Police, Army, Navy, and Customs Service.  Resentment 
among these agencies over the loss of personnel and missions 
has created a major informal barrier to coordination between 
the Coast Guard and other military, intelligence, and law 
enforcement agencies.  International cooperation has been 
similarly mixed.  The Coast Guard has maintained strong 
cooperation with AIT and the U.S. law enforcement community 
over issues such as drug trafficking and human smuggling. 
AIT has also recently re-established contact with the Coast 
Guard's operational and intelligence offices.  Taiwan and 
Japan have created a regular working-level intelligence 
exchange program, but Japan has resisted Taiwan's attempts to 
establish operational contacts between the two sides 
(Septel). 
 
Comment: Sleeper Issue with Strategic Implications 
--------------------------------------------- ----- 
 
9. (C) The May 27 incident served as a useful reminder to 
Taiwan policymakers over the risks that exist in its South 
China Sea policy.  The NSC's intervention on the issue should 
help reduce the danger that an overzealous Coast Guard 
leadership will lead Taiwan into an unwanted maritime 
confrontation with the Mainland.  In the medium term, 
however, Pratas, along with Taiwan-held islands off the coast 
of Mainland China, will remain a strategic vulnerability for 
Taiwan.  Thus far, Taipei appears intent on taking a middle 
course, refusing to cede Pratas to perceived PRC pressure 
tactics while declining to back its control of the island 
with military force.  If Taiwan's assessment that Beijing is 
renewing its efforts to enforce its territorial claims in the 
region is correct, this balancing act may become increasingly 
difficult to accomplish. 
PAAL