KMT HONORARY CHAIRMAN LIEN CHAN ON DECEMBER 9

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004064 SIPDIS SIPDIS E.O. 12958: DECL: 12/06/2031 TAGS: PGOV TW SUBJECT: KMT HONORARY CHAIRMAN LIEN CHAN ON DECEMBER 9 MAYORAL ELECTIONS AND DEFENSE BUDGET Classified By: AIT Director Stephen M. Young, Reason 1.4 (b/d) ¶1. (C) Summary: KMT Honorary Chairman Lien Chan told the Director on December 6 that the December 9 Taipei and Kaohsiung mayoral elections will be a contest between the KMT and the DPP as well as one between the candidates. Lien expects Pan-Blue voters in Taipei to ignore James Soong and unite behind KMT candidate Hau Lung-bin, who is widely expected to defeat the DPP's Frank Hsieh. Although most polls give KMT candidate Huang Chun-ying a double digit lead in Kaohsiung, the race there remains too close to call, Lien suggested. The former KMT Chairman predicted that a KMT win in both races would renew pressure on President Chen to resign and precipitate a reshuffling of the Cabinet that could result in LY President Wang Jin-pyng becoming premier. Lien also claimed the double victory could speed passage of the 2007 defense budget in the KMT-controlled legislature. End Summary. ¶2. (C) In a meeting with the Director on December 6, Kuomintang (KMT) Honorary Chairman Lien Chan described the December 9 Taipei and Kaohsiung mayoral elections as a contest between the candidates as well as a vote of confidence on the KMT and the Democratic Progressive Party (DPP). Lien suggested that pan-Blue voters in Taipei are uniting behind KMT candidate Hau Lung-bin, who is widely expected to defeat DPP candidate Frank Hsieh. Pan-Blue People First Party (PFP) Chairman James Soong, Lien's running mate in 2004, continues in the mayoral race despite repeated KMT efforts to offer "opportunities" for KMT-PFP cooperation during next year's legislative elections. Although some within the KMT advocate ignoring an increasingly marginalized Soong, Lien explained that the KMT still requires PFP support to form a majority in the Legislative Yuan. He added that without good KMT-PFP relations, the PFP could become a "noisy" irritant during next year's legislative elections by running too many PFP candidates and splitting the pan-Blue vote. ¶3. (C) Lien suggested that although KMT candidate Huang Chun-ying enjoys a double digit lead in most polls, the race in Kaohsiung remains too close to call. Lien emphasized that last minute vote-buying by the DPP and a sizable number of "hidden" DPP supporters could allow DPP candidate Chen Chu to squeeze out a victory. Both sides are working hard to energize their base supporters while reaching out to swing voters. Lien assessed that the DPP will face difficulty convincing light Green voters dissatisfied with President Chen to go to the polls on election day. ¶4. (C) A KMT win in both Taipei and Kaohsiung would renew pressure on President Chen to resign and precipitate a reshuffling of the Cabinet, Lien suggested. Chen could offer LY President Wang Jin-pyng (KMT) the premiership in order to maintain government stability and deflect criticism of his administration. A Wang premiership under a DPP administration would be an "acceptable" development, with the condition that the KMT fills several cabinet-level positions, Lien said. Wang, who challenged Ma Ying-jeou for the KMT chairmanship in 2005, is an affable politician and enjoys good RELATIONS with former President Lee Teng-hui, James Soong and the PFP, and independent legislators. Lien said he could serve as an intermediary between Wang and Ma to reduce friction between the two KMT leaders and ensure that Wang as premier would fully enjoy Ma's support. ¶5. (C) Turning to defense issues, Lien Chan suggested that a KMT victory in both Taipei and Kaohsiung could make passage of the 2007 defense budget submitted to the legislature easier. A KMT loss in Kaohsiung, however, would not make passage in the KMT-controlled legislature "entirely hopeless." In response to the Director underscoring the need to keep politics from interfering with Taiwan's defense needs, Lien pointed to the KMT's past history of supporting Taiwan's defense and said he personally believes the legislature must approve the defense budget as soon as possible to "catch up" with China. Lien, nevertheless, blamed the DPP for making arms procurement a POLITICAL issue in the 2004 election. At the Director's request, Lien TAIPEI 00004064 002 OF 002 pledged he would continue to urge KMT Chairman Ma and Wang to pass a robust defense budget. Comment -------------- ¶6. (C) Like many other politically savvy local observers, Lien sees the Kaohsiung election as a nailbiter, despite Huang Chun-ying's apparent wide lead in the polls. Lien clearly sees Wang Jin-pyng serving as premier under President Chen Shui-bian as a viable way to improve the contentious political atmosphere. However, it is not clear whether Ma would support a development that could substantially raise the profile of Wang, Ma's primary competitor for influence within the KMT. We have little doubt that both Lien and Wang would take great pleasure in Ma's discomfort, hoping that they can slow the steamroller momentum of their party rival for the KMT presidential nomination next summer. YOUNG