Fujian Cross-Strait Scholars Predict Referendum Passage and

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SUBJECT: Fujian Cross-Strait Scholars Predict Referendum Passage and
Strong PRC Reaction

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1. (SBU) Summary: The referendum on Taiwan joining the UN is likely
to pass with possible serious consequences, according to
cross-Strait scholars in Fujian's Xiamen and Fuzhou cities. They
are concerned about actions Taiwan President Chen Shui-bian will
take in the remaining months of his term and called on the U.S.
government to keep him in check by not supporting any provocative
actions. TheQnvariably predicted a close presidential election;
regardless of the outcome, however, they were, forQe most Qt,
pessimistic about its implications for cross-Strait relations,
especially whether either Ma Ying-jeou or Frank Hsieh would be able
to move forward even on economic measures like the three links that
could well benefit both sides. End summary.

Predicting Referendum Passage and...
--------------


2. (SBU) Scholars at Fujian's top cross-Strait research institutions
agreed in meetings with Emboff and Congenoff in late November that
the referendum on Taiwan joining the UN under the name of "Taiwan"
was likely to pass. Wu Nengyuan, Director of the Institute of
Modern Taiwan Studies (IMTS) at the Fujian Academy of Social
Sciences, told us November 27 that it was almost certain that the UN
referendum would pass after the "one-step" voting system was
approved. He argued that most Taiwan voters would not be
sophisticated enough to understand the referendum's implications for
cross-Strait relations and the likelihood that Beijing would
interpret passage as an act of "de jure independence." On November
29, Liu Guoshen, Director of the Taiwan Research Institute (TRI) of
Xiamen University and one of the scholars most often consulted by
Beijing for analysis of Taiwan intentions, commented that neither
Beijing nor Washington could prevent the UN referendum from going
forward.

...a Strong PRC Reaction
--------------


3. (SBU) Liu also speculated that passage of the referendum could
result in a strong PRC reaction, pointing to a State Council
statement that passage of the UN referendum would be an act of "de
jure independence." Liu said that whether or not passage would
result in a military conflict depended on the Chinese leadership's
ability to resist pressure from the Chinese public. In response to
a question on whether Beijing had already decided that the
referendum's passage would meet the conditions for "non peaceful
means" in the 2005 anti-secession law, Liu said that Beijing has not
explicitly made this linkage, partly because it did not want to give
Chen Shui-bian decision-making power over Beijing's actions.

Warnings on Chen Surprises
--------------


4. (SBU) The greatest danger lies in the Democratic Progressive
Party's (DPP) perception that Beijing will not take military action,
according to Liu. He fears that Chen Shui-bian will try to garner
deep Green support by provoking Beijing, possibly by creating an
incident near the middle line of the Taiwan Strait. He suggested a
military clash between the two sides was possible in the spring.


5. (SBU) Continuing with "worst" case scenarios, several of our
interlocutors speculated that Chen Shui-bian would attempt various
political maneuvers over the next several months to help the DPP or
even stay in power beyond the election. The conflict in Taiwan over
the DPP's one-step voting procedure and possible KMT defiance
provides an opportunity for Chen to make such an attempt. Li Peng,
Assistant Director of Xiamen's TRI, beliQs that Chen really wants
to impose martial law, a threat he had made and then withdrew in the
days before the Qember 30 meeting. Qever, Li acknowledged that
political conditions within Taiwan would probably prevent such an
act and the United States government would not accept it. Chen
might try other non-democratic means, however, like calling up the
military to prevent them from voting as he did in 2004. IMTS's Wu
said he would not be surprised if Chen imposed martial law next
year.

Call for Strong U.S. Involvement
--------------


6. (SBU) Scholars were also united in their call for the U.S
government to continue to play an active role in keeping possible
provocation by Taiwan in check. TRI's Liu noted that the U.S.

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government's public opposition to the UN referendum had made Beijing
more confident and allowed it to lower the tone of its rhetoric on
cross-Strait issues. The U.S. government should let the DPP know
the "danger of playing with fire," he said. Wu called on the United
States to send a clearer message to Taiwan. He argued that weapons
sales give the Taiwan people the wrong impression of the U.S. role
in the Strait.

A Close Presidential Election
--------------


7. (SBU) Although they are confident that the Kuomintang (KMT) will
win a majority of seats in January's Legislative Yuan election,
scholars were unwilling to predict a winner in March's presidential
election. Wu expects the KMT to win 60-70 seats. Zhang Wenshang,
head of TRI's political section, offered a similar prediction: 65-70
for the KMT and 35-40 for the DPP.


8. (SBU) However, on the presidential election, TRI's Liu would only
say that, even though the KMT's Ma Ying-jeou leads in polls by 15
percentage points, the DPP's Frank Hsieh had a better chance than
Ma, particularly because the DPP is very good at campaigning. Wu
said the key would be voter turnout, noting that the DPP is good at
mobilizing voters and Green supporters generally have a higher
turnout rate.

Implications Unclear
--------------


9. (SBU) The scholars differed on the likely impact of a Ma or Hsieh
victory on cross-Strait relations. Wu was the more pessimistic,
predicting that even if Ma wins, it is not clear that he will be
able to implement the three direct links. He argued that the DPP
will create obstacles for Ma. In addition, Wu is not convinced of
Ma's commitment to improving relations with Beijing, pointing outQis demands that the PRC recognize the Republic of China, give
Taiwan mQ international space, and withdraw its mQiles aimed at
Taiwan. Liu, on the other hand, expects that Ma will be able to
push through three direct links. He also said cross-Strait
communication would become easier in large part thanks to groundwork
laid by former Chairman Lien Chan and other senior KMT officials.


10. (SBU) Hsieh faces the risk of opposition from both the light
Green and deep Green factions of the DPP, according to Wu. Because
Hsieh lacks control of the party, Wu believes he will find it very
difficult to push through three direct links and further economic
opening in the face of opposition from pro-independence
fundamentalists. If Hsieh's victory is narrow, Wu predicted that he
would find it difficult to resist Chen Shui-bian's influence.
Furthermore, Wu speculated that if Hsieh follows a similar path to
Chen it will lead to more severe tension in the Strait especially in
the lead-up to the 2012 presidential election. Liu agreed that
Hsieh would face many obstacles to implementing three direct links.
He also commented that Beijing lacked confidence in Hsieh and would
be unwilling to help his administration and strengthen the DPP.

Taishang Participation Not Decisive
--------------


11. (SBU) Wu told us that Taiwan investors in the mainland are
unlikely to be much of a factor in the election. He predicted that
few would return to Taiwan to vote because of the inconvenience of
indirect cross-Strait flights. He also believes that Green
supporters are more likely to make the effort to return, diminishing
the KMT's electoral advantage among Taiwan investors. Wu speculated
that KMT voters would account for 50-60 percent of Taiwan investors
who return too vote. The president of Xiamen's Taiwan Business
Association estimated that of a population of 70,000 Taiwan
residents in Xiamen, about a third lean green, a third lean Blue and
the rest are neutral. He guessed that of 800 members of his
association, only 300 would likely return to Taiwan to vote.

GOLDBERG