Identifier
Created
Classification
Origin
04TAIPEI3667
2004-11-17 07:22:00
CONFIDENTIAL
American Institute Taiwan, Taipei
Cable title:  

BEIJING ACCELERATING GLOBAL CAMPAIGN AGAINST

Tags:  PGOV ECON TW 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 06 TAIPEI 003667 

SIPDIS

STATE PASS AIT/W
HAGUE ALSO PASS AMSTERDAM
FRANKFURT ALSO PASS DUSSELDORF

E.O. 12958: DECL: 11/11/2029
TAGS: PGOV ECON TW
SUBJECT: BEIJING ACCELERATING GLOBAL CAMPAIGN AGAINST
TAIWAN


Classified By: AIT Director Douglas Paal; Reasons: 1.4 (B/D)

C O N F I D E N T I A L SECTION 01 OF 06 TAIPEI 003667

SIPDIS

STATE PASS AIT/W
HAGUE ALSO PASS AMSTERDAM
FRANKFURT ALSO PASS DUSSELDORF

E.O. 12958: DECL: 11/11/2029
TAGS: PGOV ECON TW
SUBJECT: BEIJING ACCELERATING GLOBAL CAMPAIGN AGAINST
TAIWAN


Classified By: AIT Director Douglas Paal; Reasons: 1.4 (B/D)


1. (C) Summary. Taiwan officials say Beijing is effectively
leveraging its growing international clout to orchestrate a
global campaign to isolate Taipei. Officials assert that
Beijing's recent efforts have become increasingly
coordinated, organized, and creative. Taiwan MOFA officials
maintain that the PRC's most recent tactic has been to cite
Taiwan's non-participation in international forums, such as
the Chemical Weapons Convention (CWC) to pressure some
Taiwanese companies into supporting Beijing's interests. In
Europe, officials claim that Beijing has offered substantial
economic carrots to France and Germany in exchange for
leading the charge to lift the EU arms embargo. In Latin
America, the PRC has upped the stakes in the PRC-Taiwan
diplomatic chess match by employing surrogates like Venezuela
and Brazil to pressure Taiwan's diplomatic partners in the
region and increasing aid. Beijing has continued effectively
to block Taipei's efforts to join international
organizations. Taiwan believes that its international
position is only getting worse, and it sees little hope of
countering Beijing's efforts in light of the PRC's growing
international clout. Most Taiwan officials believe Taipei's
only option is to rely on the U.S. for support. End summary.

Beijing's Full-Court Press More Unified
--------------


2. (C) MOFA officials report that Beijing has stepped up its
full court press around the world to isolate Taipei. MOFA
International Organizations Deputy Director General (DDG)
Jieh Wen-chieh told AIT that what concerns him most is that
it has only been in the last couple of years that the PRC's
efforts have become so focused, unified, and global in scope.
He said that it seems all PRC officials and organizations
around the world are working in unison to pursue Beijing's
goal of isolating Taiwan. Jieh remarked that he has never
seen such an effective campaign before. Jieh said that this
is occurring on all fronts -- politically, economically, and
through international organizations.

A Dangerous New Tactic?
--------------



3. (C) MOFA officials say that the PRC has adopted a new
tactic of approaching Taiwanese companies and asserting that
Taipei cannot effectively represent their interests abroad.
DDG Jieh told AIT that he believes this has the potential to
be Beijing's most powerful weapon. For example, Jieh said
Beijing has started to warn Taiwanese chemical companies
about the negative impact on their business interests that
has resulted from Taiwan's lack of membership in the CWC.
Jieh said that in order for certain chemicals to be traded or
bought on the market legally, the company's host government
must be a member of this organization. Jieh told AIT that
because Beijing has blocked Taipei from joining the CWC,
Taiwanese firms are having difficulty acquiring or selling
certain chemicals on the open market. An Industrial
Development Bureau official told AIT separately that it is
very difficult for Taiwan entities to acquire Category I and
Category II chemicals because CWC member countries are not
permitted to export such chemicals to non-members. However,
Taiwan can import Category III chemicals if the importing
company applies to the Bureau of Foreign Trade (BOFT) for an
end-user certificate (Note: The BOFT reports that some CWC
members may be selling chemicals to Taiwan in violation of
the CWC and some non-CWC members may be selling CWC
restricted chemicals to Taiwan. End note).


4. (C) Jieh told AIT that this PRC strategy is a huge and
growing concern because it is not just a matter of political
face and prestige, but of economic survival. He said it is
increasingly difficult to protect Taiwan's own basic economic
interests as well those of individual companies. Jieh added
that some Taiwanese corporations, which are involved in joint
ventures with PRC firms, are also feeling the heat from
Beijing. Jieh expressed concern that if current trends
continue, more of Taiwan's firms will be at a disadvantage
and may look to Beijing rather than Taipei for support out of
necessity. Jieh said that Taiwan's membership in certain
organizations is essential for its economic and business
interests and as long as Beijing continues its present
course, the future is bleak.

Using Carrots to Lift the Embargo in Europe
--------------


5. (C) Taiwan officials note that the PRC is equally
aggressive in using its economic prowess in Europe to
convince EU nations to overturn the embargo on weapon sales
to Beijing. Although it is not expected to be lifted this
year, MOFA officials believe some form of the ban could be
lifted as early as next year. MOFA DDG for European Affairs,
Hsieh Chun-teh, told AIT that he felt by next year there is
no way to predict what will happen, and he was not
optimistic. Hsieh said that Beijing has adeptly convinced
Germany and France, who often champion human rights causes,
to take the lead in convincing other EU member states to lift
the embargo. Hsieh noted that French President Jacques
Chirac, during a recent visit to the PRC, pledged to work
hard to lift the embargo and was rewarded by billions in
business deals. Hsieh added that in December, German
Chancellor Gerhard Schroeder is scheduled to visit Beijing
and will likely sign similar trade pacts.

Upping the Stakes in Latin America
--------------


6. (C) Beijing has expanded the scope of its diplomatic
pressure on Latin American nations that recognize Taiwan.
MOFA DDG for Latin America, Wu Chin-mu, noted that the PRC is
leveraging its new found clout to redouble its efforts to
erode Taiwan's last bastions of international diplomatic
influence. Wu cited the case of Dominica, which earlier in
the year switched diplomatic relations from Taiwan to China
after Beijing offered a $112 million aid package over 5
years. In addition, Wu believes the situation in Panama,
arguably Taipei's most important diplomatic partner, is
clouded as Panama City did not support Taiwan's recent bid to
become a member of the UN as it had in previous years. The
new Torrijos administration in Panama has pledged that it
will increase ties to Beijing and Wu noted that the PRC is
looking to increase business activities there. National
Security Council (NSC) Deputy Secretary General Parris Chang
told AIT that Beijing has offered Panama advisors and
engineers who worked on the Three Gorges dam project to widen
the Panama canal in exchange for diplomatic recognition.


7. (C) Beijing is also using its clout with other countries
in the region to pressure nations that recognize Taiwan. Wu
asserted that in a recent visit to Beijing, Brazilian
President Luiz Inacio Lula promised to encourage Paraguay to
switch diplomatic recognition to Beijing in exchange for
trade concessions from the PRC. Wu said that Taiwan is
concerned over Paraguay's ability to resist the PRC's
regional pressure. He noted that Beijing is also linking
free trade negotiations with MERCOSUR to the Taiwan issue.
Beijing has reportedly warned that Paraguay's ties to Taiwan
are an obstacle to finalizing any PRC-MERCOSUR free trade
framework. Chang told AIT that Beijing also encouraged
Argentinean President Nestor Kirchner to lobby Paraguay to
recognize the PRC after Kirchner visited the PRC earlier this
year and the two countries signed billions of dollars worth
of commercial contracts. The NSC's Chang added that PRC
President Hu Jintao will likely reinforce this pressure
during his upcoming state visit to Buenos Aires.


8. (C) Chang noted that the PRC is increasingly looking to
Venezuela as its surrogate in the region. He asserted that
Venezuelan President Hugo Chavez has recently pressured the
Dominican Republic on the Taiwan issue. According to Chang,
Chavez has threatened to cease its sale of oil at so-called
"friendship prices" to the Dominican Republic if Santo
Domingo does not sever ties with Taipei. Chang added that
Taiwan is also concerned that the PRC peace-keepers deployed
to Haiti may be used as a tool to influence the upcoming
election campaign there.

Blocking International Organization Bids
--------------


9. (C) Taipei officials say they see no let-up in the PRC's
efforts to block Taipei's membership in all forms of
international organizations. MOFA International
Organizations DDG Jieh told AIT that Beijing views Taiwan's
membership in international organizations as a "zero sum
game." Jieh remarked that in the PRC's eyes, if Taipei gains
membership to any international organization, then it is the
same as diplomatic recognition. To illustrate how serious
Beijing is, he cited a recent APEC meeting where the PRC
delegation approached Taipei's delegation and bluntly warned
Taiwan that its position on the cross-Strait issue will have
a negative impact all over the world and demanded that Taipei
accept its "proper position," as defined by Beijing. The
NSC's Chang noted that Beijing appears eager to call for a
vote in the Organization of American States to reject
decisively Taiwan's bid for observership.


10. (C) Jieh said that Beijing's efforts are having dire
consequences for Taiwan politically and economically in an
increasingly globalized economy. According to Jieh, no
organization is too obscure for Beijing to keep Taiwan out
of. Jieh told AIT that Taiwan recently was interested in
becoming a member of the Indian Ocean Tuna Commission, which
is composes of nations that have fishing interests in the
Indian ocean. Despite the fact that Beijing does not have
even one fishing vessel in the Indian ocean, the PRC sought
membership so it could block Taiwan's own entry, just in case
Taipei might seek to join. He commented that Beijing's
hard-line is also preventing Taipei from implementing key
international law enforcement commitments such as money
laundering, narcotics trafficking, and terrorism. Jieh
remarked that this will impact the international community at
large, not just the PRC-Taiwan competition. Jieh illustrated
the case of Beijing's efforts to keep APEC from working
counter-terrorism issues because the PRC did not want Taiwan
involved in any type of global law enforcement issues that go
beyond economics. Jieh lamented that with the importance of
membership to international organizations growing, Taiwan is
increasingly at a disadvantage.

Comment: Time to Face the Music
--------------


11. (C) Taiwan officials seem to have concluded that there
is little they can do. Practically every MOFA official that
AIT met with pleaded for increased U.S. support. It is clear
they do not have an effective plan for how to deal with the
quandary they face. There is some debate within MOFA circles
over whether this chess match can be continued. Taiwan has
continued to do all it can diplomatically and financially to
maintain its diplomatic partners, but no one is confident
over how long can Taiwan keep its 27 formal diplomatic
relationships in the face of Beijing's money diplomacy and
pressure tactics. On the home front, legislators and the
public are also growing weary of blank checks being offered
to third world nations simply to maintain formalistic
diplomatic ties. The embarrassing ongoing scuffle over
Vanuatu will only increase that sense. However, no one seems
to willing to contemplate what happens if it loses what
minimal space it has carved out for itself.
PAAL