US embassy cable - 05TAIPEI3663

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003663 
 
SIPDIS 
 
E.O. 12958: DECL: 09/02/2030 
TAGS: CH, PGOV, PREL, TW, US, Domestic Politics, Foreign Policy, Cross Strait Politics 
SUBJECT: CHEN SHUI-BIAN VERSUS MA YING-JEOU, AND TAIWAN'S 
FUTURE 
 
Classified By: ADIR DJKeegan; reason 1.4 (b,d). 
 
1.  SUMMARY. Over the next several months President Chen 
Shui-bian and the Chinese Nationalist Party (KMT) Chairman Ma 
Ying-jeou will compete to shape Taiwan's future.  Each has 
chosen a strategy, and the victor will be determined by whose 
party wins two critical elections in December 2005 and March 
2008. Taiwan's long-term interests will be considered only if 
the offer either side a political advantage. Our challenge 
will be to call clearly and impartially for both sides to be 
constructive and avoid provocation. END SUMMARY. 
 
2.  Looking toward the end of his presidency, President Chen 
has decided that his strategy, his legacy and the key to the 
survival of the Democratic Progressive Party (DPP) will be a 
new Taiwan identity (ren-tong).  His repeated provocative 
pronouncements, including most recently his August 25 call 
for Taiwan to reject the "One-China myth," are intended to 
persuade Taiwan independence advocates that he has won 
acceptance by the people and friends of Taiwan that 
reunification with China is impossible now or at any time in 
the future and that Taiwan is, at least psychologically, 
independent.  At the same time, he has sought to retain a 
veneer, however tenuous, of continuity with the form of the 
Republic of China in order to claim to Washington and Beijing 
that he has not crossed China's red-line by declaring de-jure 
independence.  Chen is trying to win sufficiently broad 
support for this identity that whoever emerges as the DPP 
candidate for President in 2008 will be obliged to campaign 
and govern as the champi 
on of Taiwan's independent identity. 
 
3.  Chen's major challenge over the intervening months will 
be to resist allowing increased ties with China that risk 
compromising Taiwan's independent identity.  Since Beijing 
invited former KMT Chairman Lien Chan to visit China in late 
April, it has relentlessly urged Taiwan to allow fruit 
exports, passenger charter flights, and Mainland tourism in 
Taiwan.  Chen has resisted by denigrating the value of these 
proposals, insisting on government talks or the closest 
possible equivalent, and warning of dangers and difficulties. 
Throughout he has insisted, probably accurately, that 
implementing these cross-Strait linkages could help undermine 
his campaign for a new independent Taiwan identity.  Chen's 
problem is that Taiwan's prosperity relies on linkages to the 
Chinese economy.  At least half a million people from Taiwan 
live and work in China (some estimate the real figure could 
be two million, or 0.8 percent of Taiwan's population). 
Millions more work in businesses that are now or soon could 
be dependent on 
linkages to China.  Throughout Taiwan, for example, new 
hotels and shopping malls are being built with the hope that 
thousands of Chinese tourists will come, many on direct 
flights, to fill them. 
 
4.  Ma Ying-jeou hopes to offer Taiwan a contrasting vision 
of clean, reasonable, and effective leadership.  After months 
of reticence and indecision (what we called in one cable Ma's 
"Achilles spine"), Ma challenged KMT Chairman Lien Chan and 
the party organization's chosen successor, Legislative Yuan 
President Wang Jin-pyng, and won election as KMT Chairman 
with over 70% of the vote.  He campaigned by promising to 
remake the KMT into a cleaner and more youthful party that 
can challenge President Chen's DPP for the hearts and minds 
of Taiwan. 
 
5.  Immediately after his victory, Ma overcame a series of 
challenges from Wang and the KMT organization.  Wang demanded 
Ma apologize for suggesting that KMT politics, including 
Wang's campaign, bought votes through gift-giving and 
banquets.  Ma politely "apologized" but made it clear he 
stood by his criticisms.  Wang organized opposition to Ma at 
the KMT party convention August 16-19 and, Wang associates 
tell AIT, is still in no mood to forgive or cooperate with 
Ma.  By the end of the convention, Ma had clearly prevailed, 
despite some confusion and the election of several Wang 
loyalists to the KMT Central Standing Committee.  At the 
first meeting of this new Central Standing Committee, August 
31, Ma won approval of his first reform - selling off party 
real estate acquired through the KMT's authoritarian, often 
brutal, rule. 
 
6.  Having won the first battles with the KMT party 
organization, Ma must reshape the party.  He must persuade 
the party faithful that the KMT offers Taiwan the prospect of 
an ethical effective government.  He must attract younger 
voters who abandoned Lien's uninspiring gray KMT for the more 
youthful DPP.  He must persuade the KMT and its "Pan-Blue" 
allies who control Taiwan's Legislative Yuan to cease simply 
defeating the DPP government's legislation and begin 
initiating and passing alternative legislation.  (It should 
be noted that one rationale for President Chen's unrelenting 
emotional agenda has been his inability to initiate 
government reforms as long as the Pan-Blue LY refuses to pass 
any government legislation.)  Next, Ma must offer an 
emotionally satisfying vision of how the KMT represents 
Taiwan and the ROC even while it opposes, or at least does 
not support, Taiwan independence. To accomplish this, he must 
overcome the DPP accusation that the KMT is an "alien" 
political party that used force to imp 
ose itself on Taiwan.  Finally, Ma must present a vision of 
how Taiwan can co-exist with the Mainland in ways that offer 
practical benefits to the people of Taiwan without giving the 
DPP an opening to portray Ma as a Mainlander who does not 
really care about Taiwan. 
 
7.  Since Chen won election in 2000, the KMT has focused its 
efforts on criticizing him personally.  Since Ma won election 
as KMT chairman the DPP has returned the favor.  It has 
clearly concluded, as has almost everyone in Taiwan, that Ma 
is the presumptive Pan-Blue presidential candidate for 2008. 
The DPP campaign for the next two and a half years will focus 
on defeating Ma.  The first real test of strength between 
Ma's KMT and Chen's DPP will be the December 2005 election 
for Taiwan county magistrates and city mayors.  Except for 
the Taipei and Kaohsiung city mayors, every local leader will 
be up for election.  If either the KMT or DPP exceeds 
expectations, that will give Ma or his DPP opponent a major 
edge in the race to 2008. 
 
8.  Both the KMT and the DPP are completely focused on 
winning these two elections.  Both remember that President 
Chen won his second term by less than one-third of one 
percent.  Strategic issues including self-defense, 
international relations, and economic reform will be pursued 
only to the extent that they affect the battle for domestic 
political control. 
 
9.  If Ma succeeds in making the KMT into a competitive 
centrist party, he will also force the DPP to move away from 
Chen's platform of independent identity to compete for 
Taiwan's pragmatic center.  This could make Taiwan a more 
cooperative partner for the U.S. in a variety of endeavors. 
If Ma fails, Chen may feel further emboldened to expand his 
current campaign, increasing the risks for regional security 
and U.S. policy. 
 
10.  The challenge for the U.S. in the months ahead will be 
to state both publicly and privately our expectation that 
Taiwan's leaders be constructive, seek mutually beneficial 
cross-Strait linkages and avoid provocation without favoring, 
even inadvertently, the domestic political efforts of either 
side. 
KEEGAN