Identifier
Created
Classification
Origin
07SHANGHAI791
2007-12-13 09:00:00
CONFIDENTIAL
Consulate Shanghai
Cable title:  

SHANGHAI ACADEMIC ZHANG NIANCHI ON TAIWAN

Tags:  PGOV PREL CH TW 
pdf how-to read a cable
VZCZCXRO0653
RR RUEHCN RUEHGH
DE RUEHGH #0791/01 3470900
ZNY CCCCC ZZH
R 130900Z DEC 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6534
INFO RUEHBJ/AMEMBASSY BEIJING 1583
RUEHIN/AIT TAIPEI 0825
RUEHCN/AMCONSUL CHENGDU 1006
RUEHGZ/AMCONSUL GUANGZHOU 0976
RUEHSH/AMCONSUL SHENYANG 1006
RUEHHK/AMCONSUL HONG KONG 1135
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7055
C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 000791 

SIPDIS

SIPDIS

STATE FOR EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 12/13/2017
TAGS: PGOV PREL CH TW
SUBJECT: SHANGHAI ACADEMIC ZHANG NIANCHI ON TAIWAN

REF: A) SHANGHAI 158 AND PREVIOUS B) GUANGZHOU 1271 C) BEIJING 7165 D) TAIPEI 2053

CLASSIFIED BY: Kenneth Jarrett, Consul General , U.S. Consulate
, Shanghai .
REASON: 1.4 (b),(d)



C O N F I D E N T I A L SECTION 01 OF 04 SHANGHAI 000791

SIPDIS

SIPDIS

STATE FOR EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 12/13/2017
TAGS: PGOV PREL CH TW
SUBJECT: SHANGHAI ACADEMIC ZHANG NIANCHI ON TAIWAN

REF: A) SHANGHAI 158 AND PREVIOUS B) GUANGZHOU 1271 C) BEIJING 7165 D) TAIPEI 2053

CLASSIFIED BY: Kenneth Jarrett, Consul General , U.S. Consulate
, Shanghai .
REASON: 1.4 (b),(d)




1. (C) Summary. During a December 11 lunch, Shanghai Institute
for East Asian Studies (SIEAS) President Zhang Nianchi warned
that the 2008 referendum on Taiwan's UN membership would have
serious consequences for cross-Straits relations. The
referendum has a good chance of passing, especially if Taiwan
adopts a one-step voting process for the referendum. Zhang is
less concerned about the Presidential elections, noting that
either DPP candidate Frank Hsieh or KMT candidate Ma Ying-jeou
would be an improvement over current President Chen Shui-bian.
Zhang was pleased about recent USG statements against the
referendum, but warned that Chen continues to lie about his
actions and urged that the USG be more aggressive. Zhang said
most Chinese academics agree that the referendum crosses the
Anti-Secession Law's redlines, but the Central Government is not
willing to say this publicly, in part, for fear of hurting
U.S.-China relations. End Summary.


2. (C) The CG hosted a lunch for SIEAS President Zhang Nianchi
on December 11 to discuss cross-Strait relations. SIEAS Deputy
Director Hu Lingwei, SIEAS Department for Cross-Strait
Relationship Director Chen Yinghua, SIEAS International
Relations Department Director Zhang Zuqian, DPO, Pol/Econ Chief
and Poloff also attended the lunch. Zhang was the assistant to
cross-Strait interlocutor Wang Daohan and is a prominent
Shanghai Taiwan expert in his own right. See reftel A for
previous discussions on Taiwan.

The Referendum
--------------


3. (C) Like many academics in China (reftel B and C),Zhang is
pessimistic about the impact of the March Taiwan UN referendum
on the future of cross-Strait relations. Beijing is worried
that if the referendum passes, it will not be able to return to
having meaningful discussions with the Taiwan government on
cross-Strait issues. Taiwan representatives (academics and
government officials) stressed to Zhang during a recent

conference in New York hosted by the National Committee on
American Foreign Policy that it will be important to see how the
next President of Taiwan implements the referendum results.
Zhang is sympathetic to this argument, stating later in the
conversation that if implementation of the referendum is managed
well then there will be many opportunities for progress.
However, China views the referendum and the 2008 Presidential
elections differently from the 2000 and 2004 elections. If
Taiwan pursues entry into the UN under the name "Taiwan" then
the "Republic of China" nomenclature would disappear, thus
widening the cross-Strait gap. He implied that it would also be
unacceptable for the "Republic of China" to attempt to enter the
UN. In addition, Beijing also worries that, in the future, the
United States will come to accept the referendum results and
re-define the status quo. The CG countered that Beijing should
not assume that these potential scenarios will materialize and
should be careful that its actions don't make the situation
worse.


4. (C) SIEAS Deputy Director Hu Lingwei added that the
referendum will also have a big influence on the next President
of Taiwan. If the referendum passes and the KMT's Ma Ying-jeou
wins the election, then the DPP can use the referendum against
Ma. If the referendum passes and the DPP's Frank Hsieh wins the
election, then the deep green faction of the DPP will use the
referendum to put pressure on Hsieh to push for independence.
Passage of the referendum would also negatively affect how
people on the Mainland view the residents of Taiwan. Finally,
the referendum will affect how Taiwan is viewed in the United
States. According to a recent public opinion poll in the United
States, Hu continued, 70 to 80 percent of Americans would
support UN membership and independence for Taiwan. If the
referendum passes, there would be enormous pressure on the
Congress and the Administration as the Administration tries to
maintain the cross-Strait status quo. Zhang added that Taiwan
voter rejection of the UN membership referendum would be the
best outcome for cross-Strait relations, if the referendum must
actually come to a vote at all.


5. (C) Zhang asserted that the one-step voting process (reftel

SHANGHAI 00000791 002 OF 004


D) in which Taiwan voters would use the same ballot to vote for
the President and the referendum would increase voter
participation in the referendum, thus making valid referendum
results more likely. The KMT has no way to stop this process
from being adopted and the one-step process will likely provide
the DPP with a big advantage.

Better Than Chen Shui-Bian
--------------


6. (C) Zhang was less pessimistic about the Presidential
election, noting that both DPP candidate Frank Hsieh and KMT
candidate Ma Ying-jeou are better than current President Chen
Shui-bian. It is unclear how close Hsieh is to Chen. In the
beginning, the DPP campaign centered on Hsieh, now it looks like
the election is all about Chen. Zhang hoped that Chen's
influence will decrease once he is out of power. Zhang said a
KMT win at the January 2008 Legislative Yuan (LY) elections will
bring both benefits and challenges to the KMT. A large KMT
margin of victory will motivate the DPP to become more active
and further unite the DPP, while a KMT loss will be an even
bigger plus for the DPP.

Anti-Secession Law's Redline
--------------


7. (C) Zhang noted that there have been three conferences in
China this year on whether the referendum crosses the
Anti-Secession Law's redlines. Zhang participated in two of
those conferences. Academics at the conferences all agree that
the referendum does indeed cross the Anti-Secession Law's
redlines. According to Zhang, however, the Central Government
is not willing to say this publicly. First, the U.S.-China
relationship has become too important. President Bush and
President Hu have a very good personal relationship in which
they call each other if there are any problems. Second, China's
approach to opposing the referendum is different from its
approach to past attempts by Taiwan to further independence.
Moreover, the international community has been very active in
denouncing the referendum. China no longer has to do everything
by itself and is putting the actions of the international
community ahead of its own internal actions.

USG Taiwan Policy: An Improvement, But~
--------------


8. (C) Zhang acknowledged that the United States has used
considerable effort to oppose the referendum, such as recent
statements by EAP DAS Christensen and AIT Chairman Burghardt.
He saw this as a breakthrough in U.S.-China relations. The
Taiwan Relations Act did not set up the kind of treaty ally
relationship between the United States and Taiwan such as exists
between the United States and its European allies. It is clear
that the U.S. actions on Taiwan are motivated by self-interest,
which he saw as positive. If the United States was acting on
the basis of helping China than this would upset Taiwan and have
a negative impact on cross-Strait relations. He implied,
however, that the United States needs to be even more assertive
in reining in Taiwan. He noted the recent meeting between AIT
Chairman Burghardt and President Chen, in which Chen again
promised not to violate his "4 No's" pledge before he leaves
office in May 2008. Zhang believes that Chen is lying and will
continue to violate the "4 No's." The United States is being
treated by Chen like a "fool" or "blockhead" with minimal U.S.
reaction to Chen's self-evident falsehoods; the lack of a strong
U.S. response to Chen for his lies confuses China, Zhang said.


9. (C) Zhang also disagreed with U.S. arguments that the
referendum is part of the democratic process. While the United
States does not support the content of the referendum, it does
not oppose Taiwan holding referendums. According to Zhang,
referendums should not be used to address and resolve any
cross-Strait issues. It is unfair for the 23 million people on
Taiwan to use a referendum to make decisions for the 1.3 billion
people on the Mainland. Similarly, it would be unfair for the
1.3 billion people on the Mainland to impose its will on the
people of Taiwan based on a referendum conducted in the
Mainland. There needs to be a standard or norm used in deciding
cross-Strait relations. As noted during the 17th Communist
Party Congress in October, both sides must decide issues
together. Otherwise there will be a referendum that promotes
independence during every election.

After the Referendum

SHANGHAI 00000791 003 OF 004


--------------


10. (C) As noted above, Zhang believes that proper
implementation of the referendum by the next President of Taiwan
can create opportunities for progress in cross-Strait relations.
He noted that President Hu Jintao's report to the 17th Party
Congress called for peaceful national reunification and use of
the "one country, two systems" principle. Before discussions
can begin for resolving all cross-Strait issues, all the issues
that were left unresolved during past negotiations must be
resolved, including whether Taiwan is recognized as a government
in such talks. The "One China Principle" should be used as a
basis for discussions. If the One China issue is resolved, then
all other issues such as the status of Taiwan people on the
Mainland, treatment of Taiwan investments in the Mainland and
related issues can also be resolved. As for negotiators, Zhang
could not confirm rumors that former United Front Head Yan
Mingfu will take over the Association for Relations Across the
Taiwan Straits (ARATS). Yan would outrank his Straits Exchange
Foundation (SEF) counterpart, Hong Chi-Cheng, which could raise
concerns about the appropriateness of their possible
interaction. Zhang said that former Vice Premier Qian Qichen
had also been considered for the ARATS position but there was
also concern about his senior rank.


11. (C) Zhang is pessimistic that there will be any progress on
establishing the three direct links (postal, transportation, and
trade) in the next few years. It will be difficult for either
Ma Ying-jeou or Frank Hsieh to bring about much progress. Ma
could not simply force progress in this area and would likely
face strong opposition from the DPP. The deep green faction
within the DPP would likely not allow Hsieh, if he becomes
President, to reverse Chen's policies on the three links.

Kitty Hawk Incident
--------------


12. (C) Turning to the USS Kitty Hawk incident, Zhang agreed
with Chinese Foreign Minister Yang Jiechi's explanation that the
incident was a "misunderstanding," despite subsequent MFA
statements to the contrary. U.S. Defense Secretary Gates had
just finished a successful visit to the Mainland. The Kitty
Hawk incident occurred very shortly after the Secretary's
departure and cast a bad light on his visit. Hu added that
although U.S.-China relations is very good, it still is not very
mature and tolerant. When such incidents occur it is easy for
either side to suspect the worst in the absence of a clear
understanding of how the incident occurred.

Taiwan Businessmen
--------------


13. (C) Zhang's institute will host a meeting for Taiwan
business people in China during the week of December 17. The
meeting will include members of the Shanghai Taiwan Business
Association, economic agencies and other Taiwan business people.
One issue to be discussed is taxation of Taiwan-invested
enterprises in the Mainland. According to Zhang, it is unclear
how much Taiwan businesses should pay in taxes. He was unsure
if it is a good idea to clarify this issue and noted that many
Taiwan businesses have moved out of Shanghai because of
increasing operating costs in the area. More and more tax
holidays for early Taiwan investments in China are expiring,
which may affect Taiwan companies' views of the business
environment in the Mainland.

U.S.-China-Taiwan Conference
--------------


14. (C) Zhang recently returned from a conference in New York
on U.S.-China-Taiwan relations sponsored by the National
Committee on American Foreign Policy and convened at Columbia
University. At the conference were USG representatives such as
EAP DAS Christensen, AIT Chairman Burghardt, U.S. academic
experts, Taiwan academics, and representatives from Taiwan's
four big political parties. The Chinese side included experts
from the Mainland and Chinese academics teaching in the United
States. Zhang complained that Chinese academics teaching in the
United States did not represent thinking on this issue in China.
He added that the Ministry of Foreign Affairs will likely
review future participation at such conferences more carefully
and select academics more representative of official views in
the Mainland.


SHANGHAI 00000791 004 OF 004



15. (C) Zhang himself had to get permission from the Ministry
of Foreign Affairs and the Taiwan Affairs Office to attend the
conference. Upon arrival in New York he met with the Chinese
Consul General and discussed Taiwan and the upcoming conference.
In general, Zhang needs to get permission from the Central
Government to travel overseas. Although many academics at his
institute visit Taiwan regularly, he has not visited Taiwan for
13 years. This is due mainly to his high profile. He was
cross-Straits interlocutor Wang Daohan's close advisor and could
not travel to Taiwan as long as Wang was alive because anything
he said would be attributed to Wang.
JARRETT