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05TAIPEI2673 2005-06-20 07:16:00 CONFIDENTIAL American Institute Taiwan, Taipei
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					  C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 002673 



E.O. 12958: DECL: 06/17/2015


Classified By: AIT Director Douglas H. Paal, Reason 1.4 b

1. (C) Summary. Taipei has portrayed the selection of
former Premier Chang Chun-hsiung to be Straits Exchange
Foundation (SEF) Chair as an effort to restore SEF as a major
player in cross-Strait relations. In his June 13 speech
proposing to move forward cross-Strait dialogue, however,
Premier Frank Hsieh omitted SEF from the list of private and
semi-private facilitating organizations. For their part,
opposition "Pan-Blue" leaders dismiss both Chang as Chair and
SEF as significant cross-Strait actors. While Taipei would
prefer working through the quasi-official SEF than through
genuinely private organizations, there are no indications
that SEF is poised to recover the central role in
cross-Strait negotiations it played in the 1990's under the
highly respected Koo Chen-fu. In the event that SEF does
find a role, it will be a SEF under Chang Chun-hsiung that
is, as one senior Democratic Progressive Party (DPP) leader
told AIT, "safe" and "compliant." End Summary.

Remembrance of Things Past


2. (U) Premier Frank Hsieh (Chang-ting) nominated, and the
SEF Board elected on June 10, former Premier and DPP Chair
Chang Chun-hsiung to be the new SEF Chair, replacing the
inimitable Koo Chen-fu who died in January. Hsieh presented
Chang as "upright and pragmatic," and government officials
and Pan-Green leaders rushed to praise the Chang appointment
as signaling a new day for SEF, which has been sidelined
since 1998, serving primarily as a visa office for the
Mainland Affairs Council (MAC). MAC Chair Joseph Wu declared
the selection of such a prominent senior leader as Chang
Chun-hsiung would reinvigorate SEF and strengthen Taiwan's
cross-Strait policy. Just as quickly, however, Pan-Blue
political leaders dismissed Chang as "a patsy" and the wrong
person for the job, given his well-known pro-independence
views and his lack of experience or interest in cross-Strait

Marking Time


3. (C) Former MAC Vice Chair Alexander Huang (Chieh-cheng),
a Chen Shui-bian appointee, agreed that Chang was not the
right person for the SEF Chair since, as he told AIT, Chang
has little experience with cross-Strait issues and is neither
close to, nor has much contact with, President Chen. Noting
that the Foundation on International and Cross-Strait Studies
(FICSS), of which he is now Vice President, was hosting a
delegation from Beijing's China Institute for Contemporary
International Relations (CICIR) on the day he (Huang) talked
with AIT, Huang argued that President Chen "miscalculated" in
selecting Chang because Beijing will see the Chang selection
as an indicator that Chen is not serious about cross-Strait
negotiations. Also pointing to Chang's lack of direct
cross-Strait experience, DPP Deputy SecGen Yan Wan-chin,
himself a former SEF Deputy Director, told AIT that Chang's
appointment was another sign that SEF's "time has passed."
Instead, he said, future cross-Strait negotiations will
likely follow a variation of the 2005 Chinese New Year
charter flight negotiations between private entities with
functional government participation.

A Safe Choice


4. (C) People First Party (PFP) Policy Research Director
Vincent Chang (Hsien-yao) told AIT that Presidential Office
Deputy SecGen James Huang (Chih-fang) had called him (Chang)
in mid May to ask what the PFP thought about Chang
Chun-hsiung as SEF Chair. Noting that President Chen had
long hoped Soong would assume the SEF Chair, Vincent Chang
suggested Chen was trying one last time to coax Soong into
the SEF Chair.

5. (C) Examination Yuan President and pro-independence
fundamentalist Yao Chia-wen informed AIT that President Chen
had told him the Chang Chun-hsiung selection was intended to
keep SEF compliant and quiescent. This occurred during Yao's
meeting with Chen to discuss the concerns that DPP "elders"
(dalao) have over what they see as Chen's too-conciliatory
approach on cross-Strait relations. Noting that Premier
Hsieh's June 13 statement (Ref A) had further disturbed the
elders, Yao said he has arranged for a meeting next week
between a group of elders, including Yao and Peng Ming-min,
and President Chen to discuss cross-Strait issues and
constitutional reform. The elders intend "to keep the
pressure" on Chen to adhere to "DPP principles," Yao told
AIT, noting that he regularly meets and coordinates with
former President and independence fundamentalist Lee

6. (C) Former MAC Chair and current KMT legislator Su Chi
told AIT that the Chang selection was wrong because Chang is
"too political," whereas SEF needed a more centrist person to
give it credibility with Beijing. On the other hand, Su
surmised, President Chen may have intended Chang's
appointment to "cleanse" the SEF of its close association
with the controversial "1992 consensus" (one China, different
interpretations). The private and quasi-private
organizations PM Hsieh proposed on June 13 to facilitate
cross-Strait cargo charter flight and agricultural trade
negotiations, Su continued, indicated the Chen
administration, too, understood that SEF's time had passed.

Comment: Not Wave of Future


7. (C) The appointment of Chang Chun-hsiung appears designed
both to ensure SEF compliance in the event a role
materializes for SEF in the current spate of cross-Strait
maneuvering, as well as to give face to a party warhorse who
wanted to resign his Legislative Yuan (LY) seat when he
failed to become LY president. Precisely because Chang is so
clearly identified as a "deep Green" political leader,
Beijing will likely have little trust in him and little
interest therefore in dealing with him. Chen insiders have
greater hopes for using the yet-to-be-appointed Cross-Strait
Peace and Development Commission, expected to be announced
later this year.

8. (C) The recent spate of cross-Strait movements on the
Taiwan side derived from Premier Hsieh's June 13 public
response to Beijing's earlier offers to Taiwan's opposition
leaders of cooperation on cargo charter flights, Taiwan
agricultural exports to Mainland China, and PRC tourists to
Taiwan. In only one of these areas has SEF even been
mentioned as a possible facilitator -- tourism, at once
Beijing's highest and Taipei's lowest current cross-Strait