CHEN ADMINISTRATION DISAPPOINTED BY SOONG-HU

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002164 SIPDIS STATE PASS AIT/W E.O. 12958: DECL: 02/01/2015 TAGS: PREL PGOV PINR CH TW SUBJECT: CHEN ADMINISTRATION DISAPPOINTED BY SOONG-HU MEETING, POLICY UNCHANGED REF: A. BEIJING 7503 ¶B. TAIPEI 2126 Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) ¶1. (C) Summary: President Chen Shui-bian publicly rejected People First Party (PFP) James Soong's "two sides, one China" formulation, announced following Soong's May 12 meeting with PRC leader Hu Jintao. National Security Council (NSC) Secretary General Chiou I-jen told the AIT Director on May 13 SIPDIS that the government views Soong's formula as much worse than the KMT's "one China, different interpretations." Chiou attributed the President's strong response to Soong's announcement to deep disappointment on Chen's part that Soong not only failed to make progress towards breaking the "1992" deadlock, but may have complicated future efforts to achieve a domestic and cross-Strait consensus behind negotiations on the basis of the "Republic of China." Chiou said the May 12 joint PRC-PFP press statement has also led Taipei to conclude that Beijing is committed to isolating the Chen administration, at least for the next several months. That said, Chiou stated that in the coming week, Taipei will offer to open talks with Beijing on agricultural, transportation, and tourism. The President also plans to proceed with meetings with both Soong and KMT Chairman Lien Chan to work towards a domestic consensus on cross-Strait and domestic policy. End Summary. Dashed Expectations -------------- ¶2. (C) Senior Chen administration officials expressed deep disappointment over the outcome of PFP Chairman James Soong's May 12 meeting with PRC President Hu Jintao (Ref A). During a TV interview on May 12, President Chen rejected Soong's formulation of "two sides, one China" (Liangan Yizhong) and expressed regret that the PRC failed to offer any new flexibility during meetings with the PFP Chairman. While the Presidential Office had originally planned not to respond to a Soong endorsement of the "1992 consensus," (Ref B),NSC Secretary General Chiou I-jen told the Director on May 13 SIPDIS that Soong's new formulation went beyond the government's worst case scenarios for the Soong-Hu meeting. Chiou said that Chen's decision to respond so quickly to Soong's new formulation was in part motivated by electoral politics, but was primarily a reflection of his personal disappointment over Soong's performance. ¶3. (C) Chiou said that Chen had also expected Soong to do a better job than Lien at conveying the Chen administration's position on cross-Strait relations. Instead, Chiou said that Soong did more damage to Taipei's position than Lien did. "We can accept (the KMT's) 'one China, different interpretations,' since it leaves room for the 'Republic of China,'" Chiou stated, "but we were unhappy with Soong's new formula and his public rejection in Xian of 'two Chinas.'" Chiou said that PFP Secretary General Chin Ching-sheng called Presidential Office SecGen Yu Shyi-kun after the May 12 press conference, but only conveyed what was already in the press. Chiou added that the government will try to get a full briefing from the PFP over Soong's private discussions with Hu after Soong's return on May 13. Proof of Darker Motives? -------------- ¶4. (C) Chiou said that the government's assessment in the wake of the Lien/Soong visits is that Beijing is planning to continue to isolate the Chen government at least until the Autumn in order to see how much further they can erode the President's political support base. If Chen manages to keep in control, Chiou hypothesized, then Beijing may decide it will talk to him. If the government is forced to cede cross-Strait policy to the opposition, Chiou continued, then there would be little reason for Beijing to explore a dialogue with the government in Taipei. Chiou noted that Pan-Blue legislators are already demanding that cabinet ministers implement agreements their leaders reached in the PRC. NSC Senior Advisor for cross-Strait affairs Chen Chung-hsin commented separately that the PRC's agreement with both the KMT and PFP to establish a regularized dialogue between Beijing and the two parties could indicate a long-term decision to conduct all communications with the Pan-Blue. Chen warned that the Democratic Progressive Party (DPP) administration will not accept a situation where the Pan-Blue strikes deals with Beijing, then uses its legislative majority to demand the government implement them. ¶5. (C) KMT Vice Chairman and LY President Wang Jin-pyng offered a similar assessment over PRC motives. Wang assessed that Beijing used the Soong visit to drive a wedge between the PFP and the DPP while encouraging the Pan-Blue to solidify its LY majority. Wang told the AIT Director that Beijing may eventually deal with Chen, but only when they are confident that they hold all the cards in the relationship. (Comment: More surprisingly given his reputation as a statesman, Wang asserted that the KMT is likely to cooperate with PRC "united front" tactics, since they offer the KMT an opportunity to steal key DPP constituencies such as farmers, Septel. End Comment.) Keeping Open Options -------------- ¶6. (C) Despite Taipei's renewed concerns over a PRC "united front" offensive, Chiou told AIT that the government would maintain a positive tone in dealings with Beijing. Chiou said that relevant cabinet ministers would publicly announce next week that Taipei is prepared to engage in technical discussions with Beijing over PRC offers to Lien and Soong on agriculture, tourism, and transportation links. Chiou noted that the Council of Agriculture (COA) will link the opening of the Mainland fruit market with talks on direct cargo flights, noting that fruit like lychees spoil too quickly to be exported by ship. The NSC's Chen expressed regret that Beijing's offer to use the "Lunar New Year charter" model to negotiate cargo flights was listed in the Soong-Hu "Six Points" as coming only after negotiations over the more complicated subject of passenger flights. Chen asserted that if Beijing were to agree to Taipei's offer to talk about direct cargo flights, "everyone from the President on down would be convinced that the PRC is sincere in reaching out to Taipei." ¶7. (C) Chiou told the Director that the President is unlikely to make any major cross-Strait policy statements in the coming weeks in order to work on building a domestic consensus on cross-Strait and other policies. Chiou insisted that Chen will not waver in his commitment to seek reconciliation with Beijing in his second term, regardless of actions by the PRC or opposition leaders. Chiou cited four factors that underlined Chen's support for cross-Strait engagement: 1) Chen himself decided to pursue this course only after a long period of reflection; 2) Chen sees cross-Strait stability as a legacy issue; 3) the December 2004 election left Chen no other options; 4) USG support and encouragement. Chiou noted that this last factor has been especially crucial in defending the President's centrist policy line from both the opposition and from Pan-Green fundamentalists. Chiou said Taipei welcomed the USG's recent statements encouraging Beijing to engage with the Chen administration. Chiou noted that if Hu Jintao were to offer contacts on either "high politics" -- finessing the "1992" deadlock -- or on technical issues like transportation and trade, Taipei will respond immediately. Comment: A Hiccup, Not a Derailment -------------- ¶8. (C) Chen's quick and public rejection of the results of the May 12 Soong-Hu meeting appears to have been more a matter of personal pique than a shift in policy direction. Chen officials may have set overly optimistic goals for Soong's meetings, and may now be drawing overly pessimistic conclusions over Beijing's next steps. Nevertheless, we are encouraged by Chen's continued commitment to seeking engagement with Beijing, be it over technical or political subjects. AIT will continue to press Chen and his government to probe the PRC for new opportunities and will urge Pan-Blue leaders to resist the temptation to exploit PRC contacts for domestic purposes. Sustained public and private messages over our expectations that Beijing will reach out to the Chen government should also help set a positive atmosphere for reconciliation, both within Taiwan and across the Strait. PAAL