POST-PRC SOONG ON SPECIAL BUDGET, CROSS-STRAIT

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002229

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 05/18/2015
TAGS: PGOV PREL TW
SUBJECT: POST-PRC SOONG ON SPECIAL BUDGET, CROSS-STRAIT

REF: A. TAIPEI 02214

B. TAIPEI 02126

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


1. (C) Summary: In a May 17 meeting with the AIT Director,
People First Party (PFP) Chairman James Soong stated that his
party will continue to block the Special Defense Procurement
Budget and all other proposals initiated by the ruling
Democratic Progressive Party (DPP) until Chen Shui-bian
publicly apologies for his criticisms of Soong during his PRC
visit. Soong said that while he does not hold a personal
grudge, he must pay heed to the deep anger among the PFP
members. Soong also told the Director that in his meeting
with PRC President Hu Jintao he had spent considerable time
explaining "Taiwan's agony" and sense of separate identity to
Hu and other Beijing officials. He explained that he had
offered the new "two shores, one China" formula as a
compromise between PRC's and Chen Shui-bian's different
understanding of the "1992 Consensus." Acknowledging that
the PRC was very reluctant to accept this new term, Soong
said he felt Hu is ready to exercise flexibility as long as
Taiwan does not pursue independence. While it is clear the
PRC will not soften its anti-independence position, he said,
he believes his visit had moved the debate forward by
prompting the PRC to agree to the wording "as long as Taiwan
does not move toward independence, military conflict in the
Strait is avoidable." Soong said he believes President Chen
was serious about finding a way to restart official talks
with Mainland China at the time of their February 24 meeting,
but that he does not know Chen's current mind or intentions.
End Summary.

PFP Stance on Special Budget
--------------


2. (C) In a May 17 meeting with the AIT Director, People
First Party (PFP) Chairman James Soong stated that his party
will continue to block the Special Defense Procurement Budget
and all other DPP-initiated proposals until Chen Shui-bian
publicly apologizes for his criticisms of Soong during his
visit to the PRC. Soong charged that Chen's accusations were
tantamount to being "stabbed in the back" and had set back
his negotiations with the authorities in Beijing. He noted
that Hu Jintao had actually chided him about his relationship
with Chen, citing a traditional Chinese story about betrayal.
Soong told the Director that Chen's public broadside had put
him into a very difficult position because he did not want to
respond in kind to Chen while visiting the PRC and had
deliberately kept his statements brief and low-key. Soong
told the Director that Presidential Office Secretary General
Yu Shyi-kun apologized privately to PFP Secretary General
Chin Ching-sheng, but that a private apology is not enough to
compensate for Chen's verbal attack. Soong said that a
number of PFP "maverick" legislators have seized on Chen's
actions, along with "the NA election fiasco," to boycott
cooperation with the DPP (Ref A).


3. (C) Despite internal discord within his PFP and his harsh
treatment by the President, Soong told the Director that he
is still willing to cooperate with the DPP "for the sake of
Taiwan and people's livelihood." However, Soong said that he
is currently in "waiting mode" and that until Chen offers a
public apology, negotiation with the DPP will be impossible.
When AIT reminded Soong of his previous pledges to support
the Special Defense Budget, Soong side-stepped, and said that
the demand for a DPP apology has become an "emotional" issue
for the PFP. When AIT rejoined that for the sake of Taiwan's
defense needs the KMT has continued to support the Budget,
Soong replied, "if you believe the KMT really supports the
Budget, then put it to a vote." When AIT reminded Soong
about his pledge to put Taiwan's interests ahead of his
personal concerns, Soong signaled that he had to leave.

Explaining Taiwan to the PRC
--------------


4. (C) On his recent PRC visit, Soong told the Director that
his primary goal had been "to create a bridge between Taiwan
and the PRC." He said that when he met Hu Jintao on May 12,
after a short press conference, they dispensed with all
banquets and formalities and talked very candidly until ten
o'clock in the evening. Soong said he followed up on the
themes in his Qinghua University speech that afternoon,
spending a considerable length of time explaining "Taiwan's
agony" and why Taiwan is reluctant to talk to the PRC. Soong
said that he explained to Hu that over the centuries Taiwan
had developed a "special socio-economic cultural identity"
that could not simply be dismissed as a political tool. He
quoted the old Chinese proverb to Hu that "when distant
people will not come to you, you cannot use force to compel
them." This idea, Soong told the Director, was part of the
message that Chen Shui-bian had asked Soong to convey to Hu
-- that the PRC needed to acknowledge the reality of a
separate Taiwan identity and take the initiative to create
good will. Although he did not mention Chen's name, Soong
continued, "both Hu and I understood what I was doing."
Soong told the Director that he felt Hu received his message
well and replied that "we agree to disagree."

Reformulating "1992 Consensus"
--------------


5. (C) Another part of the message Soong carried with him to
Beijing was Taipei's willingness to consider new formulations
for the "1992 Consensus" -- which the DPP refers to as the
exchange between the two sides during and after the 1992 Hong
Kong talks -- as a platform for restarting formal political
dialogue (Ref B). Soong told the Director that he wanted to
find a formula that would permit the kind of flexibility that
former Secretary Kissinger's Shanghai Communique created. He
noted that Chen Shui-bian had accepted the 1992 idea when it
was worded as "in the spirit of the fruitful results of the
1992 Hong Kong talks." Noting that he personally preferred
the term "two shores" rather than "two sides," Soong told the
Director that his new formulation, "Two shores, one China"
connoted "two separate administrations." This would allow
room, he explained, for Taiwan to call itself "ROC" and the
other side to call itself "PRC."


6. (C) When the Director asked why the Presidential Office
reacted so quickly and so negatively to his new formula,
Soong repeated his earlier statement that Yu Shyi-kun
telephoned PFP's Chin Ching-sheng immediately afterward
Chen's public rejection. Soong said that Yu explained that
Chen was actually pleased with Soong's formula and that the
DPP would accept any PFP "retaliation" against its public
rejection.


7. (C) Regarding the PRC response to his proposed formula,
Soong conceded that "they were very reluctant to accept a new
term." He told the Director, however, that "it is my feeling
Hu is ready to exercise flexibility as long as Taiwan does
not publicly push for independence." In response to the
question of whether the PRC is willing to talk to Chen
Shui-bian, Soong said, "They are still hesitant but it is my
feeling that they were talking to me not merely because they
are pursuing a united front strategy." Soong told the
Director that he believed the PRC would talk to Chen
Shui-bian if Chen accepted the "1992 Consensus" and renounced
Taiwan independence. The fact that PRC officials spent so
much time discussing those two conditions during his meetings
with them, Soong emphasized, indicated that "they mean
business."

Renouncing Taiwan Independence
--------------


8. (C) The second of the "Six Points" that Soong reached with
Hu stated that both PFP and CCP firmly oppose any "Taiwan
Independence Movement" activities. Soong told the Director
that he is convinced the PRC "will not soften its
anti-independence position." He said that he explained to Hu
that he was not asking for independence but rather that
Taiwan be allowed to maintain the status quo of de facto
independence and that Beijing not threaten Taiwan. Soong
said Hu had told him that if he were to lose Taiwan, he would
not be able to face his ancestors and insisted that decisions
on Taiwan were not his personal decisions and, thus, he
should not be provoked by efforts to gain de jure
independence. Soong told the Director that Beijing wanted
Chen to reiterate the "Five Noes" and that only in the last
minutes of the meeting with Hu did the PRC side agree to
include the final important sentence, "As long as Taiwan does
not move overtly or covertly toward independence, military
conflict in the Strait is avoidable" into the PFP-CCP "Six
Points" agreement.

Following up with President Chen?
--------------

9. (C) Soong told the Director that he does not hold a
personal grudge against President Chen for his public
criticisms of him. However, Chen had insulted the PFP
membership and the resulting anger within the party has
limited his flexibility. Soong said that, while he cannot
judge Chen's current sincerity, when they met on February 24,
Soong felt that Chen was serious about restarting talks with
the PRC. Soong told the Director that Chen had emphasized
that his term in the presidential office was about to expire
and that he wanted to leave a legacy. Soong said that Chen
had twice complained to him during their February meeting
about former President Lee Teng-hui, noting that Lee had
advised him to accept "ROC" and not to change the names of
the state-owned enterprises. "Let us see if Chen is sincere
enough," Soong concluded, "to ask me to make a second PRC
trip."
PAAL