PRESIDENTIAL ADVISOR WARNS OF DETERIORATING

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001437

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 02/01/2015
TAGS: PREL PGOV PINR CH TW
SUBJECT: PRESIDENTIAL ADVISOR WARNS OF DETERIORATING
CROSS-STRAIT RELATIONS

REF: TAIPEI 1188

Classified By: AIT Deputy Director David J. Keegan, Reason: 1.4 (B/D)


1. (C) Summary: Presidential Office Deputy Secretary General
James Huang told AIT on March 28 that Taipei will need some
time before returning to the path of engagement with the PRC.
Huang said that the government has concluded that Beijing
timed the release of the Hsu Wen-lung letter (Septel) and the
invitation to KMT Vice Chair Chiang Ping-kun in the wake of
the Anti-Secession Law (ASL) to isolate and embarrass the DPP
government. This has led Taipei to fear that Beijing is
reverting to the "united front" tactics of President Chen
Shui-bian's first term, using the opposition parties and
Taiwan business community to isolate the DPP government.
Unless Beijing changes course, Huang warned, Taipei will have
to resist strongly and cross-Strait relations could return to
the negative cycle of the past three years. Huang said that
the DPP government had no choice but to reflect the deep
suspicion of the people in the wake of this series of events.
He expressed deep skepticism that Beijing might be sincere
in its stated desire to ease cross-Strait tensions. End
Summary.

Return to United Front
--------------


2. (C) Presidential Office Deputy Secretary General James
Huang told AIT March 28 that Taipei remains suspicious of PRC
intentions and is watching carefully what Beijing does in the
coming several weeks. Huang said that the Chen
administration is concerned that the ASL may prove to have
been the first shot in a renewed "united front" campaign that
will combine incentives to the Pan-Blue opposition with
pressure on the Taiwan business community to isolate the
Democratic Progressive Party (DPP) government. Huang said
that the Anti-Secession Law, PRC pressure on pro-DPP business
leader Hsu Wen-lung to endorse "one China" (Septel) and
anticipated red carpet treatment for KMT Vice Chairman P.K.
Chiang formed a troubling pattern.

Beware of Chinese Bearing Gifts
--------------


3. (C) Between now and the May 14 elections for the National
Assembly to ratify constitutional amendments passed by the LY
last August, Huang said the government will focus on
maximizing domestic and international attention to the
Anti-Secession Law and its reference to the use of
"non-peaceful" measures. Huang stated that the Chen
administration appreciated the USG's efforts to urge Beijing
to offer concrete gestures to Taiwan in the aftermath of
the Anti-Secession Law's passage. He said he would welcome
any additional information we might obtain about what
specifically the PRC side might do, but he added that Taipei
would be hard pressed to respond positively in the current
atmosphere. Huang said that people in Taiwan and the
international community may view Taipei's acceptance of a PRC
offer on things like agricultural liberalization or cargo
flights as tacit acknowledgment of the PRC's new law. When
pressed on how Taipei would react if Beijing did offer trade
concessions in the coming days or weeks, Huang replied that
Taipei would not likely reject them, but would find
"technical reasons" to string the process along until after
the May 14 NA election.

Especially Beware a KMT Messenger
--------------


4. (C) However, if the concessions were presented to KMT Vice
Chairman P.K. Chiang, they would be impossible to accept.
Huang said that if the Taiwan government accepted a
concession offered to Chiang, then the PRC government would
simply treat the KMT as its preferred channel to Taiwan, and
the DPP might as well give up its claim to govern Taiwan.
Huang made it clear that there is little stomach for any
flexibility on this issue. If Chiang receives particularly
high level treatment (which he defined as either PRC
President Hu Jintao or Premier Wen Jiabao) that would only
confirm suspicions in Taipei that Beijing has decided on a
return to the "united front" tactics of the first four years
of Chen's term in office.


5. (C) Huang said that the government does not plan to offer
any high-profile reaction either to the Hsu letter or the
Chiang visit, but he acknowledged that ongoing legislative
interpolations will make it impossible for Premier Frank
Hsieh to avoid the subject completely. The government hopes
it will be possible to avoid reacting for a couple of months,
but he warned that, if Taipei does determine that the PRC is
again trying to isolate the Chen administration by dealing
directly with the opposition parties and Taiwan business
community, the government will react strongly. While Huang
did not offer specifics over what measures Taipei might be
contemplating, he stated that there was a real possibility of
a return to the "vicious cycle" of the past three years.


6. (C) AIT urged Huang against rushing to conclusions, noting
that the PRC has signaled its intention publicly and
privately to take steps to ease cross-Strait tensions. AIT
also pointed out that Taipei's restrained handling of the
Anti-Secession Law, including its willingness to leave the
door open to further cross-Strait economic liberalization,
has greatly enhanced Taiwan's international position. We
stressed that the Taiwan government needs to look beyond its
domestic political situation to consider how to advance
Taiwan's long-term strategic interests, including both
cross-Strait stability and Taiwan's economic interests.
Huang made it clear that such an approach was difficult for
Taiwan's leadership to conceive in the present atmosphere.

Comment: Focusing on the Negatives
--------------


7. (C) Huang's take on PRC intentions was considerably more
pessimistic than recent assessments provided to AIT by
cross-Strait specialists at the Mainland Affairs Council
(MAC) and the NSC. Nevertheless, they reflect an important
strain of analysis within President Chen Shui-bian's circle
of advisors. Huang, who is by no means a radical, was
clearly approaching PRC policy through a prism of domestic
politics. While Huang and those with whom he works had
clearly been prepared to move past the ASL, the additional
negatives of the Hsu letter and the Chiang visit appear to
have made their assessment of PRC behavior decidedly
negative. Both of these new factors will complicate the
Taiwan policy process if and when the dust settles from the
Anti-Secession Law.
PAAL