DPP CHAIRMAN YU SHYI-KUN ON DOMESTIC POLITICS,

S E C R E T SECTION 01 OF 03 TAIPEI 004114

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/13/2031
TAGS: PGOV PREL TW
SUBJECT: DPP CHAIRMAN YU SHYI-KUN ON DOMESTIC POLITICS,
ARMS PROCUREMENT, AND DIRECT CROSS-STRAIT LINKS


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


1. (C) Summary: DPP Chairman Yu Shyi-kun told the Director
on December 12 that the results of the December 9 Taipei and
Kaohsiung mayoral elections were a "small victory" for the
party, with Chen Chu winning narrowly in Kaohsiung and Frank
Hsieh turning in a good performance in Taipei. The elections
showed that Taiwan voters are able to judge independently,
despite the barrage of negative publicity about President
Chen and the DPP in the pro-Blue media. The people are
giving the DPP a new opportunity, and Yu underscored his
"absolute confidence" in the party's future. The KMT was
making a mistake in blaming its setback on weak campaigning,
Yu argued; the KMT's essential problem is its lack of a clear
Taiwan focus. If Chairman Ma Ying-jeou continues to press
for unification with the Mainland, he will lose the
presidential election in 2008, Yu predicted. Yu asked the
Director if his recent remarks to AmCham encouraging the
opening of direct cross-Strait links were consistent with
President Reagan's 1982 assurances that the U.S. would not
mediate between Taipei and Beijing and would not pressure
Taiwan to enter into negotiations with the PRC. In response,
the Director pointed out that Taiwan has developed a major
economic relationship with China in recent years in ways no
one could have anticipated 24 years ago. The focus back then
was on political negotiations concerning final status and
arms sales. Opening direct links today is important to
further enhancing Taiwan's economic competitiveness in the
region. End Summary.

Mayoral Elections
--------------


2. (C) Democratic Progressive Party (DPP) Chairman Yu
Shyi-kun told the Director on December 12 that the party's
internal polls had predicted Chen Chu would win the December
9 Kaohsiung election by 6300-7800 votes, which was not far
off her actual 1114 vote margin of victory. This contrasted
with highly inaccurate polls in the pan-Blue media, which
showed Kuomintang (KMT) candidate Huang Chun-ying with a
double digit lead over Chen Chu. Pro-Blue media polls had
been inaccurate in the past, Yu added, including in both the
2000 and 2004 presidential elections. Such polls had misled
U.S. observers into concluding that the March 19, 2004
shooting of President Chen and Vice President Lu had swung
the election from Lien Chan to Chen Shui-bian. In fact, Yu
said, DPP internal polling had shown President Chen was
already slightly ahead of KMT candidate Lien Chan even before
the shooting incident.


3. (C) The December 9 mayoral elections, though called a
draw by some, actually represented a small victory for the
DPP, Yu maintained, adding that many observers had predicted
a defeat, given the party's difficulties. Yu attributed Chen
Chu's victory to Frank Hsieh's good performance as mayor in
Kaohisung, Chen Chu's qualifications, the DPP's efforts, and
late campaigning by President Chen and former DPP Chairman
Lin I-hsiung, who left the party some months ago. Lin, whom
many respect for his personal integrity, was not recruited by
the DPP but campaigned because of his friendship with Chen
Chu. In addition to Chen Chu's victory in Kaohsiung, Frank
Hsieh turned in a good performance in Taipei, winning nearly
41 percent of the votes, though this was below the
percentages registered by Chen Shui-bian in his successful
and unsuccessful races in Taipei City in 1994 and 1998.


4. (C) Yu suggested that the two mayoral elections
demonstrated the Taiwan people's growing ability to think and
judge independently, despite the barrage of criticism
directed at the DPP by the pro-Blue media. The elections
also reinforced the trend toward a two party political
system, highlighting the fact that the space for small
parties is shrinking. In addition, the mayoral elections
showed that the people of Taiwan are giving a second chance
to the DPP, which will need to use this opportunity to carry
out further reflection, review, and reform. Yu stressed his

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"absolute confidence" in the future of the DPP.

An End to Pan-Blue Efforts to Remove President Chen?
-------------- --------------


5. (C) Asked whether the pan-Blue campaign to FORCE
President Chen out of office is over, Yu responded that the
upcoming trial of First Lady Wu Shu-chen will be an important
factor, adding that there are many points of controversy
regarding this case. Yu doubted that Shih Ming-te will be
able to revive his "Depose Chen" movement. Shih would first
have to successfully pressure Ma Ying-jeou into remobilizing
the pan-Blue troops that formed the mainstay of the "Depose
Chen" movement before he could try again to "encircle" the
Presidential Office. (Comment: As Yu undoubtedly realizes,
Ma is highly unlikely to allow Shih to damage his leadership
again. End Comment.)

The KMT's Root Problem
--------------


6. (C) According to media reports, Yu noted, the KMT is
blaming 90 percent of its December 9 election setback on
faulty campaign tactics and just 10 percent on problems with
its own values or policies. The KMT will have no hope so
long as it continues to blame faulty campaigning for its
problems, Yu argued. Despite its many advantages, including
financial resources, a friendly media, and a large cadre of
elected local officials, the KMT has shrunk because it does
not have a Taiwan focus (bentu lunshu, literally,
"localization theme"). The DPP, on the other hand, has grown
and won elections because of its Taiwan focus. However,
those who favor unification want to hurt the DPP because they
do not like this policy. If Ma continues to press for
unification, he will lose the presidential election in 2008,
Yu predicted. He cited recent polling indicating that 65
percent of the people identify themselves as Taiwanese and
over 50 percent support Taiwan independence. Yu also noted
that Ma's approval rating, according to DPP internal polls,
is now under 40 percent, down from a high of about 80 percent
following his trip to the U.S. last March.

Candidate Selection for Upcoming Legislative Elections
-------------- --------------


7. (C) The DPP would like to hold the next legislative and
presidential elections together on January 19, 2008 rather
than having legislative elections in December 2007 followed
by the presidential election in March 2008, Yu said. The DPP
will use a three-step process to select candidates for the LY
elections. The party will seek to recruit candidates in
districts where there are no volunteers. In the other
districts, the DPP will allow party members to register as
possible candidates, working to identify a single consensus
candidate for each district through a consultation process.
In districts where it is impossible to reach consensus on a
single candidate, the party will hold a competitive primary
to determine the candidate, which will be held at the same
time as the presidential primary. Yu said he expects
campaigning to begin around July of next year.

Offensive Missiles are the Best Defense
--------------


8. (S) Yu expressed confidence that the LY will approve the
arms procurement budget either now or by March at the latest.
The Director underscored the U.S. hope that the Taiwan
government will submit a supplementary budget request for
PAC-III missiles after March 20 to strengthen Taiwan's
defenses against PRC missiles. Yu somewhat offhandedly
tossed out the idea that what Taiwan really needs from the
U.S. to prevent PRC invasion or annexation is 10-20
long-range missiles. In the past, the U.S. could not sell
such missiles because of Taiwan's policy to recover the
Mainland. The situation now is different, however, and
Taiwan is in a defensive posture. Yu cited the adage
"offense is the best defense" in support of his view that

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Taiwan needs long-range missiles. Yu's idea was completely
impossible, the Director stressed. Defense is more
effective than offense. Taiwan and the U.S. have different
defense roles, and Taiwan does not need long-range missiles.
We want Taiwan to strengthen its missile defense capability
and to play its role as a democratic model, which will help
steer China in the direction of being a responsible
stakeholder rather than a threat to Taiwan and the region.
(Comment: Yu seemed to be playing devil's advocate, but his
remarks recall the momentary fame he achieved in 2004 by
threatening to attack Shanghai with missiles if the PRC
launched missiles against Taipei and Kaohsiung. End Comment.)

Encouraging Direct Cross-Strait Links
--------------


9. (C) Yu asked whether the Director's recent remarks to
AmCham encouraging the opening of direct cross-Strait AIR
links were consistent with President Reagan's 1982 assurances
that the U.S. would not play any mediation role between
Taipei and Beijing and would not exert pressure on Taiwan to
enter into negotiations with the PRC. Yu explained that some
DPP cadres had requested that he seek clarification from the
Director on this question. The Director pointed out that
DUSTR Bhatia, during his visit to Taiwan last May, had
already underscored that opening direct cross-Strait links
was important for Taiwan, including for the U.S. businesses
operating here. The context was greatly changed from 24
years ago, when the USG intent had been to reassure Taiwan
that we would not negotiate over Taiwan's head with China on
our arms sales or pressure Taiwan to enter into negotiations
on final status issues. In recent years, Taiwan has
developed a major economic relationship with the PRC, and
opening direct links is important to further enhance Taiwan's
economic competitiveness in the region. Yu argued that the
PRC uses economics for political purposes, and therefore
Taiwan needs to take account of the security dimension of the
question. The Director responded that strengthening self
defense is the way to address security concerns, and this
will provide the confidence to further develop cross-Strait
economic links.

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


10. (C) Yu seemed almost cocky in arguing what he saw as the
DPP's advantages over the KMT. Although the DPP won a very
narrow victory in the contest for Kaohsiung mayor, the KMT
won by a much wider margin in Taipei, and it also won more
city council seats in both cities than the DPP. While Ma
Ying-jeou no longer appears to be the shoe-in for president
in 2008 that many local commentators thought him to be
several months ago, he is still quite a formidable candidate.
Because the Taiwan government itself supports opening
direct links with the Mainland, we see no problem in
encouraging this process. Yu's question on cross-Strait
links may stem from the minority view held by some Deep Green
supporters that Taiwan should slow the development of
cross-Strait economic relations to prevent further "tilting"
toward China.

YOUNG