LY SPEAKER WANG JIN-PYNG ON DEFENSE BUDGET AND

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004113

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/13/2031
TAGS: PGOV TW
SUBJECT: LY SPEAKER WANG JIN-PYNG ON DEFENSE BUDGET AND
DOMESTIC POLITICS


Classified By: AIT Director Stephen M. Young,
Reasons: 1.4 (b/d)


1. (C) Summary: Legislative Yuan (LY) Speaker Wang
Jin-pyng discussed progress on the defense budget and
Taiwan's post-election political landscape with the Director
on December 12. Wang suggested that the 2007 annual defense
budget is likely to pass during the current legislative
session, with all three major U.S. weapons systems likely to
be approved. Regarding the recent mayoral elections, Wang
charged that the DPP narrowly won the Kaohsiung race through
vote-buying, and he characterized the outcome as a personal
defeat for KMT Chairman Ma Ying-jeou, suggesting Ma's
leadership ability is now coming under serious question.
End Summary.


2. (C) Legislative Yuan Speaker Wang Jin-pyng discussed
progress on the defense budget and Taiwan's post-election
political landscape with the Director on December 12. Wang
assured the Director that the 2007 annual defense budget is
likely to pass during the current legislative session. He
expects all three major U.S. arms procurement items (P-3C
anti-submarine aircraft, PAC-II missile upgrades, and a
submarine feasibility study) to be approved. He added that
the KMT will also seek to move the 2006 supplemental budget
package through the LY Procedural Committee next week.
(Note: The KMT and PFP blocked the supplemental package for
the 68th time yesterday. End Note.) Wang indicated that the
proposal in the 2007 defense budget to purchase F-16 fighters
has not yet been discussed in the LY or between MND and the
LY. The general understanding, he said, is that the LY will
begin discussion of the F-16 proposal only after MND receives
Price and Availability data from the USG. The Director made
it clear that Washington understands this arrangement.


3. (C) Turning to the December 9 mayoral elections, Wang
charged that the DPP won the narrow contest in Kaohsiung
through vote-buying. Moreover, he claimed that the DPP
fabricated vote-buying charges against the KMT on the eve of
the election, asserting that the KMT "did not buy one single
vote." He said that the KMT will contest the Kaohsiung
election in court.


4. (C) Looking toward the future, however, Wang indicated
that the KMT was also reassessing its own strengths and
weakness in light of the Kaohsiung loss. Wang suggested that
the defeat has raised many questions about KMT Chairman Ma
Ying-jeou's leadership ability. Ma, the Kaohsiung native
Wang told the Director, simply does not understand Taiwan or
the Taiwanese people. While Ma has lived in Taiwan for many
years, Wang noted, almost all of his time has been spent in
Taipei. Rather, what the KMT needs to compete with the DPP
is a leader who is a Taiwanese (bentu) backed by mainlanders.
Wang argued that Ma is just too much of a lightning rod for
the DPP. The KMT needs a candidate who is not so divisive
and who can then move ahead to push forward cross-strait
reconciliation. When the DIR suggested that it appears that
Wang is just that candidate, Wang laughed and said that there
were many other Taiwanese in the KMT party, besides himself.


5. (C) Wang criticized PFP Chairman James Soong for his
abysmal performance in the Taipei mayoral race. Soong, he
said, had run in order to support the other members of his
party in their run for the city council. Wang told the
Director that Soong is angry at KMT Chairman Ma Ying-jeou for
publicizing an election eve meeting between the two men
during which Soong sought concessions from the KMT in return
for PFP cooperation. Soong wanted the KMT to offer one of
the two Taipei vice mayoral positions and the Keelung mayoral
position to the PFP in addition to some single-member
districts in the upcoming 2007 LY election. (Note: The press
is now reporting that it was Soong's own right-hand advisor
Vincent Chang who leaked the Ma-Soong meeting to the press,
reports that Chang has thus far not denied. End Note.)


6. (C) In response to the Director's query about media
reports, Wang denied that he had immediate plans to travel to
mainland China. Nonetheless, he said, he would be willing to
go if there were a substantive agenda for him to negotiate.

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He said he was last there over 14 years ago. Noting that
Taipei and Beijing are likely to reach an agreement on PRC
tourist travel to Taiwan by the end of December, Wang said
the next item on the cross-strait agenda would be expansion
and regularization of charter flights beyond the current four
annual holiday periods, entailing both "more charter flights
and longer routes." When the Director asked if such an
agreement would require Taiwan government approval, Wang
responded "in strict confidence" that the government had
already discussed this issue with him, and suggested the
Director raise this with NSC Secretary-General Chiou in their
meeting the next day, December 13. (Note: Chiou indeed
confirmed that the government has discussed such a trip with
the LY Speaker, but added that China may balk at anything
that could be seen as favoring the Chen government. End
Note.)

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


7. (C) The KMT performance in the Taipei and Kaohsiung
mayor elections, especially the loss in Kaohsiung, has been
portrayed locally as a disappointment and personal setback
for KMT Chairman Ma, who had painted the election as a
referendum on his integrity. Wang is clearly relishing
seeing his erstwhile party rival come under criticism and may
be maneuvering to gain the support of former Chairman Lien
Chan to contest Ma's leadership within the KMT.
YOUNG