BEIJING PRESSURES PRO-DPP BUSINESS LEADER TO

S E C R E T SECTION 01 OF 02 TAIPEI 001438

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 02/01/2015
TAGS: PREL PGOV PINR CH TW
SUBJECT: BEIJING PRESSURES PRO-DPP BUSINESS LEADER TO
ENDORSE "ONE CHINA"

REF: TAIPEI 1403

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


1. (S) Summary: Long-time pro-DPP business leader Hsu
Wen-lung penned a letter to a Taiwan newspaper on March 26
endorsing the PRC's position on "one China." Hsu's move was
widely interpreted by the media and political world as a sign
of mounting PRC pressure on Taiwan business leaders.
Presidential Office Deputy Secretary General James Huang told
AIT that Hsu informed President Chen Shui-bian before hand
that he was going to issue the letter. Taiwan officials say
that Hsu's letter was the most prominent of a series of
statements that Beijing pressured various Taiwan business and
student leaders to make in the lead-up to the March 26 rally.
While the Mainland Affairs Council (MAC) interprets the
PRC's actions as targeted at the March 26 event, President
Chen and his advisors appear to see the episode as a
harbinger of further moves aimed at isolating the DPP
government. End Summary.

Green on Red
--------------


2. (SBU) Chi-mei Corporation founder and long-time Democratic
Progressive Party (DPP) supporter Hsu Wen-lung took out a
prominent ad in the Economic Daily News (owned by the
pro-opposition United Daily News group) endorsing the PRC's
"one China" policy. Hsu wrote in the article that his past
support for President Chen was based on the DPP's commitment
to economic reform and not its pro-independence ideology.
Hsu went on to state that it was his view that "the Mainland
and Taiwan both belong to one China," borrowing word-for-word
language used in the PRC's 16th Party Congress Work Report on
Taiwan. The Chi-mei corporation has major high-tech
investments on the Mainland and was reportedly the target of
PRC harassment after the March 20, 2004 presidential
election. The Tainan-based Hsu has been the most prominent
business supporter of the Chen government. Hsu's money
funded the creation of the pro-DPP Taiwan Think Tank. Hsu
has told AIT privately that he personally favors Taiwan
independence, but acknowledges that this is impossible under
current conditions.

PRC Manipulation
--------------


3. (S) Most media outlets and political observers attributed
Hsu's sudden public embrace of "one China" to PRC pressure on
Chi-mei's Mainland interests. Presidential Office Deputy
Secretary General James Huang told AIT on March 28 that Hsu

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informed President Chen before hand the letter would be
published on the day the President was to join a mass rally
to protest the Anti-Secession Law. Although Huang was
clearly reluctant to provide details of the conversation, he
made it clear that he had no doubt that the PRC determined
both the timing and the content of Hsu's article. MAC Chief
Secretary Jan Jyh-horng told AIT that PRC officials pressured

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a number of Taiwan student and business association leaders
on the Mainland to make similar statements in the days
leading up to the March 26 rally, with Hsu being the most
prominent. Jan said that Taipei had firm information that
Hsu resisted Beijing's original demand that he personally
endorse "one China" in public. Instead, according to Jan,
the two sides settled on having Hsu sign the March 26 article
for the Economic Daily.


4. (C) Political leaders reacted sympathetically to Hsu's
plight, with former President Lee Teng-hui saying he had no
choice but to show "understanding" for Hsu's decision to pen
the article. KMT Chairman Lien Chan praised Hsu on March 27
for his "courage in expressing what he really feels in his
heart." MAC issued a press release on March 28 condemning
Beijing for extorting Taiwan business leaders, including Hsu,
into publishing articles in support of the Anti-Secession
Law. MAC's Jan said the release was aimed at protecting Hsu
from criticism from Pan-Green supporters of selling out
Taiwan.

Isolated Incident or First Shot in New Campaign
-------------- --


5. (C) The Presidential Office's Huang said that senior
leadership in Taipei views the Hsu episode as part of a
coordinated campaign by Beijing to isolate the Chen
administration (Septel). However, MAC's Jan offered a less
bleak assessment, noting that PRC statements and actions
seemed to be aimed primarily at undermining attendance at the
March 26 mass rally in Taipei. Jan noted that PRC public
statements in the days following the march were considerably
milder than in the lead-up to the event. He stated that the
next key indicator of whether Beijing is preparing to keep up
the drum beat on the Anti-Secession Law will be the PRC State
Council Taiwan Affairs Office press conference on March 30.

Comment: Can Taipei Hold Its Course?
--------------


6. (C) One key assumption behind Taipei's plan to use the
March 26 rally to bring Taiwan anger over the Anti-Secession
Law to closure was that the PRC would avoid further actions
that would exacerbate negative feelings in Taiwan (Reftel).
The Hsu letter may have been one of those very actions.
While it is too early to assess the full impact of Beijing's
manipulations on the Taiwan public and business community,
President Chen and his senior aides appear to have already
concluded that the action was made in bad faith. To this
day, DPP officials cite the PRC's diplomatic snub over Nauru
on July 15, 2002 -- the day Chen assumed the chairmanship of
the DPP -- as the start of the destabilizing spiral in
cross-Strait relations. The recent international boost Chen
has gained from his skillful handling of the Anti-Secession
Law may suffice to avoid a repeat of that experience.
However, the Hsu episode may significantly slow the process
of resuming positive cross-Strait contacts.
PAAL