NSC SECGEN CHIOU ON CROSS-STRAIT/U.S.-TAIWAN

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003796

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 10/10/2013
TAGS: PREL PGOV TW
SUBJECT: NSC SECGEN CHIOU ON CROSS-STRAIT/U.S.-TAIWAN
RELATIONS

Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D)


1. (C) Summary: National Security Council (NSC) Secretary
General Chiou I-jen acknowledged continued USG concerns over
where President Chen Shui-bian is leading Taiwan, but
asserted that Chen knows that a move towards de jure
independence would mean war. Chiou said that Taiwan will
continue to seek channels to convey Taipei's intentions to
Beijing and asked Washington to help facilitate contacts.
Chiou expressed optimism over passage of the USD 18 billion
special procurement budget in the lame duck Legislative Yuan
(LY) session that will open after the December 11 election.
Chiou was upbeat over Pan-Green chances in the December 11
election, estimating that the government will be able to
exert working control over the LY with the help of 3-5
non-partisans even if it does not secure an outright majority
on its own. End Summary.

Chiou Says CSB Knows His Limits
--------------


2. (C) During a November 25 dinner with the AIT Deputy
Director, NSC Secretary General Chiou I-jen acknowledged that
rhetoric used during the 2004 presidential election campaign
has left many in Washington worried about President Chen's
second term intentions. Chiou said that President Chen is
equally cognizant of this fact and is trying to rebuild the
trust that was lost during the election period. Chiou
asserted that the USG "should not worry" that Chen will lead
Taiwan towards independence in his second term because the
president is fully aware that Beijing and the international
community would not permit it. "If there was no PRC military
threat, the president, myself, and everyone else in the
Democratic Progressive Party (DPP) would prefer that Taiwan
was independent," Chiou asserted, "but we are not blind to
reality." Chiou dismissed speculation that Chen seeks a
declaration of Taiwan independence as his historical legacy.
"Why would someone decide to make something that is
impossible to achieve his overriding political goal?" Chiou
asked rhetorically.


3. (C) Chiou acknowledged that there were elements within the
president's base who were less realistic about Taiwan's
constraints. However, he noted that these voices were almost
all from the older generation. "If you talk to the
up-and-coming generation in the DPP, you will not hear the
sorts of things advocated by people like the vice president,"
he added. Chiou pledged to keep an eye on actions by the
government that may impact on cross-Strait stability. As an
example, Chiou said he previewed the Executive Yuan's (EY)
recently introduced revisions to the opposition-passed
Referendum Law to ensure that they did not lower the bar to
initiate referenda on constitutional-related subjects.
(Comment: Chiou acknowledged, however, that he had not
considered whether the revisions would make it easier to
initiate a referendum on sensitive subjects like "one
country, two systems" that were not necessarily related to
constitutional reform. Nor did he address a possibility
raised with AIT by KMT Taipei Mayor Ma Ying-jeou, that
non-binding "consultative" referenda on sensitive subjects
could be used to cow the LY opposition into passing
constitutional amendments they would otherwise oppose,
Septel.)

Reality as Beijing Sees It
--------------


4. (C) Chiou said he fully shares USG concerns over Beijing's
increasingly alarmist views of developments in Taiwan, and
stated that this is the reason Taipei is so eager to
establish some sort of a dialogue channel with the PRC. "We
may think they are worried about 10 issues when it turns out
they are focused on 100," he stated, "the only way we will be
able to clarify their concerns is by talking to them as we do
with the U.S. and other countries." Chiou noted that recent
PRC public statements indicate that Beijing is unwilling to
show flexibility on the "one China" precondition for formal
talks. If this is the case, he continued, Chiou suggested
that the two sides open a private channel "where face will
not be an issue." Chiou appealed to Washington to help
facilitate such a channel.
Special Procurement Budget: Cautious Optimism
--------------


5. (C) Turning to bilateral issues, Chiou expressed optimism
that the USD 18 billion special defense procurement budget
would pass in the December-January lame duck LY session.
Chiou said he expected Lien Chan and other Pan-Blue leaders
to oppose the budget out of spite for their losses in the
presidential and LY elections. However, Chiou asserted that
the DPP would exploit anticipated splits within the KMT over
leadership secession to assemble a majority. "KMT reformists
are likely to embrace the special budget as one of the issues
to push Lien and his cadre out of power," Chiou stated.
Chiou assessed that KMT LY President Wang Jin-pyng would try
to use cooperation over the special budget as a bargaining
chip with the DPP to secure his own political future. Chiou
said the DPP would accommodate Wang to some extent, but not
as far as allowing him to keep his speakership in the next
LY. Chiou predicted that, in the end, Wang would facilitate
passage in order to curry favor with KMT reformists as part
of his own bid for the KMT chairmanship.

Domestic Politics: Pan-Green Majority Within Reach
-------------- --------------


6. (C) Chiou said that the DPP's LY campaign is generally on
track, but said the Pan-Green is not yet confident enough to
predict an outright Pan-Green majority. Chiou offered that
the DPP currently projects that it will win 96 seats, with
the Taiwan Solidarity Union (TSU) picking up an additional
14, for a total of 110 (out of 225). Chiou estimated that
the DPP could gain an additional three seats if it dropped
one candidate each from its lists in Taipei County Second
District, Taipei City North, and Taoyuan County. However, he
said no decision on shifting resources away from struggling
candidates would be made until December 1. Chiou asserted,
however, that even if the Pan-Green falls short of the 113
needed for a majority, the DPP can assemble a working LY
majority with the help of 3-5 friendly non-partisans
(Septel). Chiou added that the DPP will certainly appoint a
non-partisan as LY Vice President, most likely fourth-term
aboriginal legislator Walis Pelin, to solidify its control
over the body.

Comment: Is Chiou for Real?
--------------


7. (C) To us Chiou clearly portrays his role in the Chen
administration as the voice of moderation, informing the
political leaders of the international and cross-Strait
implications of their words and actions and balancing against
the influence of the DPP's pro-independence wing. However,
Chiou is actively involved in DPP political strategy, even in
his current foreign policy position. It is unlikely that
Chiou has been as surprised as he claims to be by some of the
more provocative themes the president has floated in recent
weeks. Chen's focus on sovereignty themes on the campaign
trail was not an aberration, it was a core element of the
DPP's plan to stimulate its core support base. As with the
last election, Chen and his senior advisors appear to have
mapped out a strategy that would use "goodwill" gestures such
as the October 10 speech and November 10 "10 Points"
initiatives to distract international attention from more
provocative elements of the DPP's campaign platform. Chiou
is among the most respected campaign strategists in the DPP
camp and thus quite likely a key player in this two-handed
strategy.
PAAL