SOONG ON SPECIAL BUDGET AND UPCOMING PRC VISIT

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001849

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 04/20/2015
TAGS: MARR MASS PGOV PREL TW
SUBJECT: SOONG ON SPECIAL BUDGET AND UPCOMING PRC VISIT

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


1. (C) Summary: In an April 19 meeting with the AIT
Director, People First Party (PFP) Chairman James Soong said
his party would allow the USD 18 billion Special Defense
Budget to pass at the end of the current Legislative Yuan
session in late May/early June despite lingering doubts over
portions of the package. He also said that the PFP would
continue to negotiate to reduce the numbers of certain weapon
systems and the overall cost of the package. Soong outlined
for the Director the guidelines under which he would visit
the PRC early next month. He recognized that as an
opposition party leader, he had no right to negotiate on
behalf of Taiwan. While asserting that he will not serve as
Chen Shui-bian's proxy in dealing with the PRC, Soong said
the "Ten Point Consensus" that he reached with Chen during
their February 24 meeting will serve as the basis of his
talks with PRC leaders. Soong added that he will keep
President Chen informed of the details of his visit. End
Summary.

Action on the Special Budget
--------------


2. (C) In an April 19 meeting, People First Party (PFP)
Chairman James Soong told the AIT Director that his party
will allow the USD 18 billion Special Defense Budget to pass
at the end of the current Legislative Yuan session in late
May/early June. Soong asserted his commitment to ensure that
Taiwan has the capability to defend itself and to acquire
weapons in order to achieve this goal. He said that U.S.
officials in Washington had told him that passage of the
Special Budget has become an important gesture to show the
world that Taiwan has the will and desire to defend itself.


3. (C) Soong continued, however, that he had reservations
about portions of the Special Budget package presented by the
Taiwan Ministry of National Defense (MND). He complained
that the MND had misled the Taiwan public by not revealing
that it was the MND, not the USG, that has pushed for the
purchase of the eight submarines in the package. Soong said
it was his understanding that the current package, especially
the submarine program, did not have the endorsement of the
U.S. defense establishment and experts. The Director
reminded Soong that items in the Special Budget package were
requested by the Pan-Blue leadership, not the USG, before the
2000 election. The Director noted that these systems were
chosen as priorities through a consultative process between
the U.S. and Taiwan based on Taiwan's defense needs. The
Director urged Soong not only to support the current Special
Budget package, but also to back future MND budget requests
to build-up Taiwan's stock of critical ammunition.


4. (C) Soong said that the PFP would continue to negotiate to
reduce the numbers of certain weapon systems and the overall
cost of the package. He complained that the KMT has been
spreading rumors that he had yielded to U.S. pressure to
abandon his reservations about the Special Budget. The
PAC-III missiles, he noted, are his personal priority. Soong
also expressed support for the acquisition of P-3Cs and other
advanced weapons systems that would give Taiwan an
anti-submarine defense capability. He said that while he
does not rule out the possibility of buying submarines, the
timing for this "is not ideal." Contrary to popular
perceptions, he added, PFP does not advocate an indigenous
submarine building program.


5. (C) Soong stated that Taiwan should not resort to a
military solution to resolve its problems with the PRC. The
Director replied that a strong military reduces the
likelihood that Beijing would seek a military solution.
Taiwan, he continued, would gain more at the bargaining table
if it enters into negotiations with the PRC from a position
of military strength.

Upcoming Visit to the PRC
--------------


6. (C) Soong also outlined for the Director the guidelines
under which he would visit the PRC early next month. He
stressed that the United States was Taiwan's most important
friend and without its support, Taiwan would not be able to
deal with the PRC. Soong said he understands the firm U.S.
positions regarding the "one China" policy, opposing Taiwan
independence, and opposing unilateral changes in the status
quo. Those were, he noted, his fundamental positions as well.


7. (C) While asserting that he will not serve as Chen
Shui-bian's proxy in dealing with the PRC, Soong told the
Director that the "Ten Point Consensus" he reached with Chen
during their February 24 meeting will serve as the basis of
his talks with PRC leaders. Soong said that he fully
understands that as an opposition party leader, he must
respect the Presidential Office and accept that negotiation
with the PRC must involve the Executive branch. Recognizing
U.S. regional security concerns, Soong assured the Director
that his meetings with the PRC will not tilt the strategic
balance of power toward the PRC or undermine Taiwan's
democratic institutions. (Note: Presidential Office Deputy
Secretary General James Huang told the press on April 19 that

SIPDIS
while Soong would not serve as President Chen's "envoy,"
Taipei would have no objection if Soong discusses the
Chen-Soong "Ten Point Consensus" with Beijing authorities.
End note.)


8. (C) Noting that the first Chen-Soong meeting had drawn
criticism from their respective voter base, Soong told the
Director that while the two parties will maintain informal
low key contacts he does not want a second public meeting
with Chen Shui-bian. Quoting a Chinese proverb, "We stick
together but not too close," Soong said that through
discussions between PFP Secretary General Chin Ching-sheng
and Presidential Office Secretary General Yu Shyi-kun, Chen
will know exactly what he intends to say to the PRC.


9. (C) Soong said that he has not had time to formulate a
concrete agenda or to work out the details of his visits.
Broadly speaking, Soong said he hoped to negotiate some
formula under which the PRC government could have direct
talks with its Taiwan counterpart. Soong suggested that
Chen's "Five Noes" and the KMT's "1992 Consensus" might be
possible options. Soong argued that the "1992 Consensus" had
already reaped some fruitful results in the past. He said it
might be reworded to render it acceptable to all sides. He
gave particular emphasis to using the August 1, 1992 National
Unification Council statement on the meaning of "one China"
as a basis for direct talks. In addition, Soong said he
hoped to urge Beijing to support World Health Assembly (WHA)
observership for Taiwan and concessions for Taiwan business
people working in the PRC.

Comment: Can He Deliver?
--------------


10. (C) Soong's commitment to early action on the Special
Defense Budget is encouraging, but the question remains
whether he will be able to convince enough of his party to go
along. Soong's invitation to Beijing could offer an
opportunity to rally his increasingly disaffected political
base. If handled correctly, Soong may be able to convince
his followers that his unpopular cohabitation agreement with
Chen Shui-bian was worth the effort. However, Soong has
promised more than he has delivered on defense spending many
times before. Soong's equivocation over the details of the
budget package could leave him an out if members of his party
caucus like Nelson Ku attempt to sabotage the budget as they
have in the past.
PAAL