US embassy cable - 05TAIPEI4159

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 004159 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 10/12/2015 
TAGS: PGOV, TW 
SUBJECT: PAN-BLUE OPPOSITION TO DEFENSE SPENDING:  A 
DIFFERENT VISION OF TAIWAN'S FUTURE 
 
REF: A. TAIPEI 3284 
 
     B. TAIPEI 3778 
     C. TAIPEI 3962 
     D. TAIPEI IIR 6 818 0184 05 
 
Classified By: AIT Director Douglas Paal, Reason(s): 1.4 (B/D) 
 
1.  (C) Summary.  The long-stalled Defense Procurement 
Special Budget has become increasingly identified in Taiwan 
domestic politics with the "Pan-Green" agenda of maintaining 
distance from the PRC and relying on the U.S. to protect 
Taiwan.  At the same time, the opposition "Pan-Blue" 
coalition, which developed the components of the Defense 
Special Budget package when it was in power before 2000, has 
shifted to a very different world view that sees defense 
against the PRC's massive military build-up as futile and 
stresses cross-Strait confidence-building measures as the 
best guarantor of Taiwan security, an outgrowth of the May 
2005 Lien/Soong PRC visits.  The opposing Green-Blue stances 
on the Defense Special Budget go beyond "just politics" in 
the run up to year-end elections; rather, they are rooted in 
a perceptual and ideological divide between the two camps 
based on very different views of cross-Strait relations and 
visions of Taiwan's future.  End Summary. 
 
Legislative Mirage 
------------------ 
 
2.  (C) The opposition of Pan-Blue parties, People First 
Party (PFP) and Kuomintang Party (KMT), to the Defense 
Procurement Special Budget (PAC-III missiles, P-3c 
surveillance aircraft, diesel electric submarines) 
continuously changed over the past year.  Stated reasons for 
opposition shifted from economics (too expensive), to funding 
mechanism ("fiscally irresponsible" special budgets), to 
public opinion.  In the Spring 2005 Legislative Yuan (LY) 
session, the Pan-Blue also attacked the ruling DPP for 
allowing the regular defense budget to decline to 2.4 percent 
of GDP and demanded the regular defense budget be enhanced to 
cover large weapons procurement.  When the Ministry of 
National Defense (MND) responded in early September by 
shifting the PAC-III missiles into the regular defense budget 
and reducing the Defense Special Budget from NTD 480 billion 
to NTD 340 billion, however, Pan-Blue legislators responded 
with a new argument:  PAC-III procurement is "illegal" 
because a March 2004 island-wide referendum "rejected" 
(foujue) acquisition of more missile systems.  Despite the 
government's insistence that the referendum did not cover 
PAC-III's, since that acquisition had been previously 
decided, Pan-Blue parties have dug in their heels on the 
PAC-III's, KMT legislator Su Chi told AIT on October 11. 
(For a discussion of the defense referendum, see Ref A.) 
 
3.  (C) In step with its shifting explanations for opposing 
the Defense Special Budget, Pan-Blue promises of future 
support also shifted further into the future.  "After the 
December 2004 LY elections" shifted to the Spring 2005 LY 
session, then to the end of that session and finally to the 
regular Fall 2005 LY session.  Now, after three rejections in 
the current session, Blue legislators are beginning to hint 
that following the December 2005 local elections, the time 
might be right for considering (vice passing) the Defense 
Special Budget. 
 
Differing World Views 
--------------------- 
 
4.  (C) There are deeper issues at stake in the Green-Blue 
stand-off over the Defense Special Budget than just political 
jockeying for advantage in the year-end local elections. 
Rather, the two camps hold very different perceptions of 
cross-Strait relations and Taiwan's future.  Former 
(unsuccessful) KMT candidate for Taipei County Magistrate 
Spencer Yang (Tang-shun) told AIT that KMT legislators see 
the rise of China and its arms build-up as "unstoppable."  In 
their view, Taiwan can never match China militarily and, 
thus, has no choice but to accommodate this new power 
reality.  At the same time, Yang continued, Pan-Blue 
legislators and activists believe the U.S. is "dumping" old 
or ineffective weapons on Taiwan; for example, he said, 
Patriot missiles have only a 30 percent success rate, "too 
low to provide Taiwan with effective missile defense."  Yang, 
who is a political scientist involved in KMT polling 
operations, told AIT that 80 percent of Kuomintang supporters 
do not/not believe the U.S. will really help Taiwan in the 
event of a PRC attack.  KMT legislator Su Chi separately told 
AIT that a retired U.S. admiral he met with on his last U.S. 
visit told him it would take "at least 3 weeks" for the U.S. 
to get reinforcements to Taiwan in the event of a PRC attack, 
"too late to be of use," said Su.  The moral of this story, 
Su concluded, is that Taiwan cannot count on the U.S. 
 
5.  (C) On the other hand, cross-Strait specialist Philip 
Yang (Jung-ming) -- Blue-leaning, but with close contacts in 
the government Mainland Affairs Council (MAC) -- told AIT 
that most Pan-Green supporters are convinced the U.S. will 
support, even defend, Taiwan.  Yang pointed to President 
Chen's reported statement during his recent Central American 
trip that he (Chen) believed the U.S. would come to the aid 
of Taiwan in the event of an attack.  The main reason the 
Pan-Green parties, DPP and Taiwan Solidarity Union (TSU), so 
strongly support the Defense Special Budget, Yang argued, is 
that they believe this will commit the U.S. to Taiwan's 
defense.  At the same time, he continued, the DPP government 
is working to limit and control relations with the PRC, as 
demonstrated by its effort to establish "effective 
management," and continues to enforce the "40 percent rule" 
discouraging investment in the PRC.  Other than its sporadic 
and provocative efforts to push a separate Taiwanese 
identity, Yang told AIT, the Taiwan government's most 
dangerous policy is its focus on use of Hsiung-feng missiles 
to attack mainland targets in order to provide "military 
deterrence," which is "useless, even counterproductive," in 
the context of Mainland China's overwhelming military 
advantage.  Taipei's flirtation with deterrence strategy, 
Yang feared, will only stimulate PRC military buildup, 
leaving Taiwan in a relatively weaker security situation. 
 
6.  (C) Pan-Blue legislators and activists tell AIT that they 
believe passage of the Defense Special Budget would send a 
message to Beijing that cross-Strait relations are basically 
confrontational.  KMT Spokeswoman Zheng Li-wen told AIT that 
Pan-Blue leaders see China's rise and development as 
inevitable and the two sides of the Taiwan Strait as 
increasingly interdependent.  PFP legislator and Policy 
Director Vincent Chang (Hsien-yao) told AIT that while the 
PFP recognizes the PRC military threat, cross-Strait tensions 
are on the decline, in large part because of the Lien and 
Soong trips and the resulting cross-Strait progress 
(duty-free fruit, possible Chinese tourists to Taiwan and 
passenger and cargo charter flights, and PRC attentiveness to 
Taiwan students and business people living in Mainland 
China).  Most Blue supporters are convinced that China has no 
intention of attacking Taiwan, Spencer Yang explained, unless 
the DPP government makes any movements toward independence or 
raises cross-Strait tensions.  Many Blues, Philip Yang noted, 
see the Special Budget peace-through-strength approach as 
atavistic "Cold War mentality" that could provoke conflict. 
Pan-Blue leaders especially oppose Taiwan's procurement of 
submarines, Yang continued, because of their offensive 
potential, not to mention the fact that production and 
deployment would take ten years and Taiwan would have no part 
in the manufacture.  While the Pan-Blue accepted the need for 
P3c's, Su Chi explained, submarines were highly questionable 
and PAC-III's out of the question, the last because Taiwan 
voters "vetoed" (sic, see Ref A) further missile acquisitions 
in March 2004 referendum. 
 
KMT Appeals for U.S. Understanding 
---------------------------------- 
 
7.  (C)  Su Chi told AIT that the KMT "really resents" being 
painted by some U.S. academics and think tanks as pro-China, 
pro-unification, anti-defense, and/or obstructionist.  This, 
he argued, is a "shallow" perception and misperception of the 
Blue position.  It is in part Pan-Blue's own fault, Su 
acknowledged, because it had not clearly explained its stance 
or objectives but rather had focused wholly on domestic 
politics.  U.S. critics, Su continued, failed to comprehend 
the KMT's carefully nuanced strategy for creating real, 
long-term security for Taiwan.  Beijing, moreover, is 
cooperating in this prudent game and, for example, carefully 
refrained from even mentioning "one China" or unification 
during Lien's visit to China.  (On the other hand, he noted, 
Lien gave explicit orders that there must be no criticism of 
President Chen Shui-bian while the Lien delegation was in the 
PRC.)  The KMT, Su stressed, is not pro-unification, but only 
anti-independence and supports the status quo. 
8.  (C) Blue legislators, Philip Yang told AIT, view the Chen 
government's support of the Defense Special Budget as "buying 
insurance," intended to obligate the U.S. to defend Taiwan. 
This sense of security will, in turn, encourage the Chen 
government and pro-independence elements to promote Taiwan 
separateness.  The September 25 "Defend Taiwan" march in 
support of the Defense Special Budget sponsored by 
"deep-Green" pro-independence organizations (Refs B,C), Yang 
noted, further identified the Defense Special Budget with 
pro-independence sentiments in the mind of Blue supporters. 
 
Comment:  Different Politics, Different Visions 
--------------------------------------------- -- 
 
9.  (C) The Special Budget is not the only legislation 
deadlocked in the LY.  Very little legislation, in fact, 
passed the gridlocked 2004-2005 LY, and the current session 
portends to be equally constipated.  Pan-Blue legislators' 
suspicions of the Defense Special Budget and of U.S. motives 
are difficult to counter with explanations and information. 
AIT notes that some of the Pan-Blue legislators spouting 
inaccurate information about the Defense Special Budget 
weapons systems, pricing, and capabilities, have been 
provided with accurate, detailed information.  They choose to 
ignore the information for political purposes, as Blue and 
Green camps seek issues to gain advantage in the December 3 
local and future elections. 
 
10. (C) Beyond politics, the Green and Blue camps have 
fundamentally different perceptions of cross-Strait relations 
and visions of Taiwan's future.  The DPP government and 
Pan-Green leaders now strongly support the Defense Special 
Budget (though they did little to promote it until criticism 
from the U.S. sharpened).  The Pan-Blue camp, on the other 
hand, is operating in the continuing aftermath of the May 
2005 Lien-Soong visits to Mainland China.  Five months after 
the two visits, it is clear that they have had a significant 
impact on cross-Strait relations and on Pan-Blue thinking. 
Beijing's fruit, charter, student, and panda overtures this 
past Summer came straight from the pages of the Joint 
Statements of the two visits.  A Niandai (pro-Blue) series of 
monthly public opinion polls of voter satisfaction showed a 
quick five-point bump in KMT and PFP support and parallel 
drop in ruling DPP support in mid May just after the 
Lien-Soong visits.  This bump/drop has held steady for four 
months down to the most recent poll last week, and will 
likely fuel Pan-Blue determination to continue the Lien-Soong 
approach and to oppose the Defense Special Budget in all its 
reconfigurations. 
PAAL