DIRECTOR'S INTRODUCTORY CALL ON TAIPEI MAYOR/KMT

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 001222

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E.O. 12958: DECL: 04/07/2031
TAGS: PREL PGOV MCAP TW
SUBJECT: DIRECTOR'S INTRODUCTORY CALL ON TAIPEI MAYOR/KMT
CHAIRMAN MA YING-JEOU, APRIL 4, 2006


Classified By: AIT Director Stephen M. Young, Reason(s): 1.4 (B/D).


1. (C) Summary: Taipei mayor and Kuomintang (KMT) Chairman
Ma Ying-jeou told the Director on April 4 that as the
"majority" party in opposition, the KMT must assume greater
responsibility for Taiwan's "national" welfare. Ma agreed
that Taiwan's defense capability should not be treated as a
political football, but he could not resist blaming President
Chen for the defense impasse and Taiwan's economic
difficulties. During a short one-on-one meeting, the
Director impressed upon Ma the need for frank, discreet
communications, the U.S. desire for cross-party cooperation,
and the need for both sides to exempt defense and bilateral
issues from Taiwan's political gamesmanship. Ma admitted he
would have to work with the Chen administration if there was
to be any hope in resolving Taiwan's security and economic
problems. End Summary.


2. (C) The Director paid an introductory call on Taipei
mayor and KMT Chairman Ma Ying-jeou on April 4, 2006. The
Director congratulated Ma on the success of his U.S. visit,
and Ma expressed appreciation for the willingness of his U.S.
interlocutors to meet with him and listen to his remarks. Ma
emphasized that he had not publicized the existence or
contents of his private meetings in the States, which was
intended to show that he understands the importance of
direct, discreet communications for building mutual
confidence.

Find Common Ground on Defense
--------------


3. (C) The Director said the April 3 Ma-Chen meeting was a
step in the right direction, and that both Ma and Chen
deserved recognition for their participation.
Decision-making is sometimes more difficult in a healthy
democracy like Taiwan's, said the Director, but Taiwan's
self-defense and its relationship with the United States must
be excepted from partisan bickering. The United States
expects Taiwan's ruling and opposition parties to take U.S.
concerns about Taiwan's security seriously, and further
expects Taiwan to demonstrate the resolve to defend itself.


4. (C) The U.S. is concerned about Taiwan's "drift" on
defense, the Director continued. Although Taiwan and the U.S.
have enjoyed success in areas involving sensitive technical
cooperation, Taiwan's failure to maintain adequate defense
spending has negatively affected Taiwan's relationship with
the U.S., both psychologically and empirically. Beyond
inter-operability problems, some in the U.S. fear Taiwan
question whether Taiwan has the resolve to defend itself.
Citing Ma's meeting with ASD Rodman, the Director urged Ma
not to view defense spending as a tactical matter to be
guided by partisan political concerns, but rather as a
long-term project for the good of all of Taiwan. Better
relations with the PRC may be possible, but only on an equal
footing, where Taiwan can demonstrate its ability to defend
itself, and its strong relationship with the United States.


5. (C) Ma acknowledged that Taiwan should maintain adequate
defenses and demonstrate the resolve to defend itself, but he
blamed the decline in defense spending on President Chen's
administration. Ma also blamed Chen's decision to abrogate
the NUC and NUG for the KMT's inability to reach consensus on
its own arms procurement proposal. More than 20 KMT caucus
members were dead-set against moving forward two weeks ago,
and he did not want to fight with the caucus at that time.
Ma said that after the KMT caucus calms down over the NUC
matter, he will revisit the arms procurement proposal.


6. (C) The Director remarked that Taiwan's relationship with
the U.S. is still good, but could suffer if Taiwan's ruling
and opposition parties remain unable to find common ground to
break through the current defense/security impasse. Ma
agreed, and observed that since the Pan-Blue now controls the
majority of county mayor and magistrate seats (17 of 23) and
holds the majority in the LY, it should begin acting more
responsibly in Taiwan's "national" interest. Ma said the KMT
policy is to demonstrate to the international community that

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Taiwan, like China, wants to be a "responsible stakeholder."

Problem of China's Rise
--------------


7. (C) The Director said Taiwan attracts less support in
Washington than it did five years ago, due in part to the
refocusing of U.S. policy on the Middle East after 9/11. The
U.S. is also paying more attention to a China that is
increasingly important, responsive, and sophisticated. Ma
responded that ten years ago, the PRC was firing missiles
into the Strait. Today, said Ma, the "united front" tactics
employed by Beijing are "very refined and effective," and the
PRC is using these tactics with a "confidence" not seen
before. The Director noted that the PRC is no longer making
the kinds of mistakes Taiwan politicians have become
accustomed to exploiting for domestic political purposes.

8. (C) The Director said the challenge for the United States
in acknowledging China's rise is to convince China to
overcome the idea that it is an aggrieved party with claims
on the rest of the world and understand that, as an important
and powerful country, the PRC has responsibilities as well as
rights on the world stage. If the U.S. is successful in
helping China through this transition, it will be good for
the U.S., Taiwan, and the global community. Ma told the
Director the challenge for Taiwan is to get past China's
"arrogant rise." Only recently Beijing worked to deny Taipei
the chance to host the 2006 conference of the Asian Network
of Major Cities (ANMC),preferring to quit the organization
rather than allow Taipei to host the event.


9. (C) The Director responded that many outside Taiwan remain
sympathetic to President Chen because, despite his early
efforts at rapprochement, he never had a willing partner in
Beijing. Taiwan continues to be a blind spot for an
otherwise increasingly sophisticated PRC government, and it
might seem time is not on Taiwan's side unless one expects
China's economic liberalization to liberalize its political
environment. The U.S. hope is that in the future, five, ten,
or twenty years from now, China could be more open, and
perhaps more flexible in dealing with Taiwan. Throughout
that period, the Director pointed out, Taiwan's democracy
will be an important symbol and could be a possible engine
for change inside China.

Constitutional vs. Economic Reform
--------------


10. (C) Ma said he is worried that President Chen Shui-bian
is increasingly moving away from dealing with Taiwan's
economic problems, and back toward questions of
constitutional reform and de jure independence. Ma said
Taiwan's current constitution deserves special status because
it came into effect while China was still united in 1947.
After seven rounds of constitutional amendment under
Presidents Lee Teng-hui and President Chen, stability is
needed, not more change.


11. (C) The KMT is not concerned that constitutional
amendments will pass through Taiwan's rigorous amendment
process, Ma continued, but that the constitutional amendment
process itself will divert government resources and attention
from more pressing economic issues. Ma regretted that he was
unable during his April 3 meeting with President Chen to
convince Chen to place rectifying Taiwan's economy before
constitutional reform. Chen's continued push for
constitutional reform destabilizes Taiwan's economy and
hurts Taiwan's prospects for improving cross-Strait economic
relations. As evidence Ma cited an increasing number of
Taiwan companies that now choose to register with the Hong
Kong exchange in lieu of Taiwan. Taiwan also faces the
threat of being marginalized if the PRC manages to reach free
trade agreements with Singapore, Korea, and the like. Taiwan
will face increased competition for the U.S. market, and a
one-percent drop in its GDP if the "ASEAN Plus Three"
agreement goes through, Ma predicted.


12. (C) Ma asked whether Washington had felt pressure from
Beijing in opposition to a U.S.-Taiwan FTA. Young said there

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had been no pressure yet, but there would be if the idea
began to attract serious attention. The U.S. is experienced
in standing up to Chinese pressure, said Young, unlike some
of Taiwan's other friends. However, for the U.S. to agree to
an FTA with Taiwan, there would have to be a clear economic
benefit to the U.S., and there could not be a
disproportionate impact on U.S.-PRC relations. Young added
that Taiwan would have to "give up a lot" just to get the
U.S. to discuss an FTA, particularly increased access for
U.S. agricultural products and enhanced IPR enforcement.


13. (C) Ma said former KMT Chairman Lien Chan will be
attending an April 14-15 economic summit in Shanghai to take
the initial steps toward forming a PRC-Taiwan "common
market." The trip will give Lien a chance to meet with PRC
President Hu Jintao before Hu's visit to the United States,
Ma noted. The Director said he hopes Hu takes seriously the
U.S. desire to foster cooperation and communication between
the PRC and Taiwan's elected leadership. Ma responded that
the KMT would like to facilitate such contact. Ma said he
repeated the KMT's cross-Strait policies many times while in
the U.S. to ensure that China understands the KMT wants
Taiwan to be a peacemaker, not a troublemaker. The Director
cautioned Ma that if and when the KMT assumes power, the PRC
may be much less cooperative than it is now, and that the
present might offer special opportunities not available in
the future.

Private Meeting
--------------


14. (C) At the Director's request, Mayor Ma went into a
one-on-one format at this point. Director Young emphasized
the importance of maintaining a discrete dialogue over
certain issues, and sought Ma's concurrence. Toward that
end, Young pointed out the problem with other recent meetings
where the details -- often distorted -- quickly found their
way into the Taiwan press. Ma understood this problem and
pledged to respect the confidentiality of our exchanges.


15. (C) The Director first emphasized his desire to work
closely with the mayor over the next three years on the whole
range of difficult issues, in particular strengthening
Taiwan's defense and preserving and deepening U.S.-Taiwan
relations. The U.S. is very impressed with Taiwan's vibrant
democracy, but it sometimes poses real challenges to getting
the policy right. For example, there needs to be a better
job done by both the government and the opposition to explain
to their public the rationale behind our security cooperation
and the corresponding need for higher defense spending.


16. (C) The Director then emphasized his commitment to work
closely with the Chen administration for the remainder of its
time in office, in the promotion of U.S. interests. We
wanted to be seen as working constructively with the entire
spectrum of political forces on Taiwan in furtherance of U.S.
interests, and would try to be an honest broker with both the
government and opposition. In that regard, Young made a
strong pitch to Ma to broaden areas of common interest with
the DPP, especially as they concerned defense cooperation
with the U.S. and the broader U.S.-Taiwan relationship. In
addition to making progress on key issues more likely over
the next two years, this could create a pattern for such
cooperation across party lines for the future. If the KMT
returned to power in 2008, it would want to draw upon such a
tradition in working with the DPP in opposition to advance
the island's vital interests.


17. (C) Ma was very receptive to this appeal, and claimed
that he would be working within his own party and the
pan-Blue faction to promote such cooperation. But he
cautioned that he faced certain problems in persuading some
of his colleagues that this was the correct path. The
Director, in praising the good start made in the previous
day's Ma-Chen summit, called upon Ma to exercise his
leadership within the pan-Blue movement toward this end. Ma
indicated that he was also working closely with former KMT
Chairman Lien Chan as Lien prepares for his mid-April trip to
China, to ensure that Lien's approach was fully consistent

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with Ma's priorities for cross-strait ties. This was not
always so easy, Ma confided, but he continues to place high
priority on wooing members of the "old KMT" like Lien. The
Director urged Ma to emphasize to Lien the importance of
calling upon China to deal with Taiwan's democratic leaders
as well as the opposition, and Ma claimed to accept this
point.


18. (C) The Director then offered to share his personal
thoughts on dealing with Beijing. As Ma had heard in
Washington, the USG is committed to trying to bring the PRC
into the modern world order as a "responsible stakeholder,"
both because this was in our interests, and because the
alternative of a strong but irresponsible China clinging to
its past suspicions and complexes would threaten both the
U.S. and Taiwan. That said, the way in which the PRC was
treating the KMT now was likely to change if the KMT returned
to power in Taiwan. While it was clearly in Beijing's
interest to treat the KMT with kid gloves while in the
opposition, in large part to put greater pressure on Chen
Shui-bian's government, Ma could expect a very different
approach if the DPP was replaced by the KMT in 2008.


19. (C) The Director used the example of the Dalai Lama, who
had been told he could resume dialogue with China only if he
met certain conditions concerning support for "separatism" in
Tibet. Yet when the Dalai Lama publicly accepted these
conditions, Beijing dismissed his gestures as "insincere" and
raised the bar on resumed dialogue. Ma could expect
something similar on the subject of "one China" if his party
returned to power in 2008. He could also expect Beijing to
insist to an end to U.S. arms sales to Taiwan as part of any
"interim agreement."


20. (C) Ma went to great lengths to stress he was quite aware
of these tactics by the PRC. He referenced both his
background as deputy head of the Mainland Affairs Council in
the early 1990's, and his family history. Several members of
his family back in Hunan had been persecuted and killed by
the communists, Ma emphasized. He was viewed by the mainland
as an "anti-communist." Ma seemed to be proud of this
status, and assured the Director that he would approach
relations with China with a great deal of caution.


21. (C) This brought the conversation back to defense issues.
Ma made a real point of underscoring that he understood the
importance of close defense ties with the U.S. as the
essential prerequisite to negotiating with China. He also
mentioned his desire to work closely with the Japanese on
related security issues. He assured the Director that he
wanted to work closely both with AIT and with Washington to
provide for a strong defense against Chinese threats. We
ended this private discussion by agreeing to continue our
quiet discussion on both Taiwan defense and U.S.-Taiwan
relations in the coming months.

Comment
--------------


22. (C) This marked a good start to our dialogue with the
most promising candidate at this early stage to replace Chen
Shui-bian as Taiwan's president in 2008. Ma seemed both
pleased and chastened by his visit to the United States, in
which he heard from several senior U.S. officials the same
points about strengthening Taiwan's defense and looking to
the maintenance of strong U.S.-Taiwan relations that the
Director reiterated here. That said, there was an underlying
theme of skepticism and disdain for President Chen throughout
our meeting, even as Ma admitted that he needed to work with
the governing administration if he had serious hopes for
change over the next two years. As with Chen himself, we
will find ourselves battling the political instincts of Mayor
Ma to highlight partisan differences with the higher calling
to address Taiwan's security needs and shelter U.S. relations
from the sharpest vicissitudes of democratic infighting here.
YOUNG