MM LEE ON CROSS-STRAIT RELATIONS AND IRAQ

C O N F I D E N T I A L SECTION 01 OF 02 SINGAPORE 000089

SIPDIS

E.O. 12958: DECL: 01/11/2016
TAGS: PREL PGOV CH TW IZ SN
SUBJECT: MM LEE ON CROSS-STRAIT RELATIONS AND IRAQ

Classified By: Ambassador Patricia L. Herbold for Reasons 1.4(b)/(d)


1. (C) Summary: During her January 6 courtesy call,
Ambassador Herbold engaged Singapore's senior statesman,
Minister Mentor (MM) Lee Kuan Yew, in a wide-ranging
discussion covering China, Taiwan, and Iraq. MM Lee
commented that the U.S. presence in Asia created the
stability that engendered the "Asian Miracle." He stated
that China's ascendance and military build-up are not
alarming; China will be focused on its internal economic
growth for the "next twenty years." He noted that President
Chen Shui-bian's New Year's speech was merely an attempt to
boost his domestic standing. He reiterated his view that the
United States must remain engaged in Iraq -- a terrorist
success there will bring dire consequences for Southeast
Asia. End Summary.

China
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2. (U) Ambassador Herbold asked MM Lee for his opinion on
China's ascendance. For at least the next 20 years, China
wants no entanglements and prefers to focus on its economic
growth, Lee said. MM Lee observed that China is growing
quickly, but unevenly, with most growth along the coasts and
major rivers. Developing its interior will remain China's
greater challenge. If the United States had not brought
China into the world community, none of this would be
happening, he said, adding that the process now is "not
stoppable."


3. (C) Turning to Singapore-China relations, MM Lee
recounted that Singapore was the first to recognize China as
a "market economy." Negotiations for a Free Trade Agreement
(FTA) between Singapore and China had been on track until two
things happened. First, Prime Minister Lee Hsien Loong, who
was then Deputy Prime Minister, visited Taiwan in July 2004.
Second, Singapore supported Japan's bid for a seat on the UN
Security Council in the fall. Now, MM Lee wryly observed,
China claims that it needs a committee to study the need for
an FTA. "They punish you in subtle ways," he said.


4. (SBU) Ambassador Herbold remarked on China's significant
military build-up, and MM Lee stated that China wants to
increase the price of any potential U.S. intervention in
Taiwan. Any conflict between China and Taiwan would be a
disaster, said Lee, and China does not want one. Not only
would Chinese be killing fellow Chinese, but any conflict
would result in economic embargo and retaliation from the
United States and Japan, he surmised.

Taiwan
--------------


5. (C) The Ambassador and MM Lee discussed President Chen
Shui-bian's New Year's Day speech. MM Lee thought President
Chen's goal was to boost the standing of his Democratic
Progressive Party, which did not perform well in the December
3 municipal elections. MM Lee also commented that President
Chen is "parochial" and has miscalculated, believing that the
Chinese will be preoccupied with the 2008 Olympics and
failing to recognize that "the world community values peace,
stability and growth more than it values Taiwan."


6. (C) When asked about the opposition party's prospects in
the 2008 Presidential election in Taiwan, MM Lee responded
that the current mayor of Taipei, the Kuomintang's Ma
Ying-jeou, is young and not corrupt. Though the son of a
mainland family, he was born in Hong Kong. MM Lee asserted
that Ma didn't have an emotional bond with China, and a vote
for him would be one way Taiwanese could moderately express a
distinction between themselves and China.

Iraq
--------------


7. (SBU) Turning to Iraq, MM Lee emphasized the importance
of defeating the terrorists there. If they win in Iraq, they
will be emboldened in Southeast Asia. If they are defeated
in the Middle East, however, they will become disheartened.
Comparing the situation to Vietnam in the sixties, he
repeated his frequent admonition that the United States must
remain fully engaged in Iraq. He observed that, in Vietnam,
the South had lost the will to fight, whereas in Iraq, the
Shiites and Kurds have not lost the will to fight, so it is
feasible that Iraqis will begin to take over the fight, and
U.S. casualties will diminish, making the situation more
palatable for Americans. Though a risk, civil war could be
avoided, said the MM, if the Gulf States do not support the
Sunnis, as the Sunnis cannot continue to fight without
outside help. MM Lee noted he will travel to Saudia Arabia
in the next two weeks.

Closing
--------------


8. (U) In closing, MM Lee commented that the United States
had made the "Asian miracle" happen. He observed that the
United States had fought three wars in the region -- World
War II, Korea, and Vietnam. Both Japan and Korea recovered
from these conflicts with U.S. assistance; Taiwan, Hong Kong
and Singapore became the "little tigers"; and China and India
are on the rise. MM Lee said that the United States needs to
remain engaged in Asia for a long time to come. The U.S.
presence is important for stability; without stability, there
can be no growth.
HERBOLD