TAIWAN AND CHINA RELATIONS IN THE PACIFIC --

C O N F I D E N T I A L SECTION 01 OF 03 SUVA 000402

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/08/2017
TAGS: PREL PINR MARR PGOV EFIS XV CH TW
SUBJECT: TAIWAN AND CHINA RELATIONS IN THE PACIFIC --
UPDATE RE TUVALU, KIRIBATI, AND NAURU

REF: SUVA 372

Classified By: Amb. Dinger. Sec. 1.4 (B,D).

Summary
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1. (C) Competition between China and Taiwan for allegiance
from small Pacific states remains intense. In Tuvalu, Taiwan
is a very visible donor, which Tuvaluans appreciate.
However, the Taiwan ambassador to Tuvalu was PNGed after
meddling in 2006 post-election politics. The current
ambassador curries favor well, while the PRC constantly
probes for an opening. In Kiribati and Nauru in recent
years, leadership changes brought realignments on the
China-Taiwan front. Both Kiribati and Nauru will have
elections again in August. Both sets of incumbents seem
confident of victory. In both nations, Taiwan has been very
visibly supportive, sometimes with minimal accounting
requirements, while China has attempted to maneuver behind
the scenes. The Scotty government in Nauru moved up
elections from October to August in part to limit alleged PRC
efforts to buy votes. Reportedly, some PRC agents attempted
to enter Nauru on Mongolian passports. The Taiwan ambassador
to Nauru was recently replaced in an effort to inject more
energy into the bilateral relationship. Nauru complained to
us, as Tuvalu has in the past, of Australian efforts to push
alignment with the PRC. Taiwan has offered used
purse-seiners to several Pacific allies, raising issues under
the Western and Central Pacific tuna treaty. We comment that
USG efforts need to continue to try to convince both China
and Taiwan to be responsible donors. End summary.


2. (U) The Ambassador visited Tuvalu, Kiribati, and Nauru
from July 16-27. All three small nations recognize Taiwan.
During the past year, all three have experienced
"interesting" events in the China-Taiwan competition.

Taiwan aid to Tuvalu: cash; in kind; and seaman jobs
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3. (C) Tuvalu has recognized Taiwan for the entire 29 years
since independence. The Tuvalu Minister of Finance said
Taiwan currently provides A$5 million of assistance per year:
A$3 million in budget support, and A$2 million in projects on
the various islands. The Taiwan Ambassador told us the A$5
million recently increased from A$3.5 million. He said all
is "project aid" and all must be accounted for. In addition,
Taiwan just completed the refurbishment of one of Tuvalu's
two inter-island ferry boats. And Taiwan has agreed to place
12 Tuvalu seamen on Taiwan merchant ships in an experiment.
One of Tuvalu's main sources of income is from seamen working
on German ships, but supply exceeds demand, in part because
some of the Tuvalu seamen have had discipline problems. The
Taiwan Ambassador to Tuvalu told us the Tuvalu seamen will be
much more expensive than seamen from the Philippines. The
Taiwan Government is placing the seamen on ships of a
government-affiliated company and will subsidize the cost.

Former Taiwan Amb PNGed; new Amb a good fit
--------------

4. (C) Following Tuvalu's general election last August, the
then-Taiwan Ambassador suddenly departed. Speaker of
Parliament Latasi and the current Taiwan Ambassador both told
us the former Ambassador had been accused of meddling in the
process of forming the new government. Latasi said flat out:
"he was offering bribes, totally inappropriate behavior." He
was PNGed. The current Ambassador appears to have built very
cordial relationships with Tuvalu's leadership. The big
social event in Funafuti each week is a Wednesday evening
buffet at the one hotel. The Taiwan Ambassador always
invites a dozen or so Tuvalu VIPs. The night we observed,
the entire Cabinet, almost the entire governing caucus, was
in attendance. Interestingly, when we met informally with
the new Ambassador, he offered a $100 gift watch, with
assurance that nobody would ever know. We declined, but it
illustrates how ingrained gift-giving is with Taiwanese
diplomats.

PRC always digging, but Taiwan makes people content
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5. (C) The Tuvalu Finance Minister aspires to create an

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"economic relationship" with the PRC, but he said others
prefer to stick purely to Taiwan. The Taiwan Ambassador
reported that the PRC is "always digging." When the Taiwan
Embassy recently processed visas for two Tuvalu MFA officials
to visit Taipei, they found used PRC visas in the passports.
Taiwan believes the Tuvalu "old guard" politicians are loyal,
including Speaker of the House Latasi. Latasi, himself,
informed us he has advocated switching to the PRC, given
world realities; but Taiwan's presence is well-established
and most people are content.

Kiribati: August election; Tong and Taiwan confident
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6. (C) In Kiribati, the last two elections have seen switches
of allegiance between Taiwan and the PRC, most recently in
2004 when current President Tong came in and immediately
recognized Taiwan. That caused the PRC to evacuate its
presence, including a satellite-tracking station on South
Tarawa. The PRC left behind a "caretaker" for its diplomatic
properties, a person widely believed to be an intelligence
agent. Having perceived signs of meddling in politics,
Kiribati Immigration refused to extend the caretaker's visa
early this year. Since then the PRC has not been visibly
present; however, some surmise the PRC is continuing attempts
via agents to influence the general elections now scheduled
for Aug. 22. President Tong told us he is confident of
victory. The Taiwan Ambassador feels the same. The Taiwan
Ambassador said all his government's assistance to Kiribati
is carefully accounted for, and much of it is project aid on
outer islands. Tong does not believe the China-Taiwan issue
will influence voting, though he thinks most Kiribati
citizens perceive that Taiwan gives more than the PRC did.

Nauru: PRC meddling helps trigger early election
-------------- ---

7. (C) In Nauru, recent changes of government have also
caused shifts between Taiwan and the PRC. After the 2004
election, the Scotty government restored Nauru's
long-standing allegiance to Taiwan after previous President
Harris had shifted to the PRC, reportedly in exchange for
significant Chinese cash. Thereafter, the Harris crowd
charged that the Scotty crowd had received under-the-table
cash from Taiwan. In recent months, Nauru authorities allege
PRC agents have brought in up to A$40,000 for distribution to
voters in order to help Harris and other Scotty opponents win
this year's election and shift allegiance back to Beijing.
In fact, a major reason why Scotty moved the elections up by
two months from October to August 25 is to reduce the PRC's
opportunity to influence voters. The Minister of Commerce
reported that PRC representatives recently attempted to enter
Nauru via a "Mongolian trade mission," traveling on Mongolian
passports. Nauru came to realize they were actually PRC
citizens and revoked their visas.

Taiwan aid: plenty available with minimal accounting
-------------- --------------

8. (C) The Nauru Commerce Minister acknowledged that both
Beijing and Taiwan dole out cash to politicians, it is just a
matter of to whom. The Secretary of Finance (an Aussie) told
us Taiwan currently provides A$4.5 million per year in budget
support (a Taiwan embassy official said it is A$4.7 million),
and Taiwan is paying A$2 million per year for six years to
buy a Boeing 737 for Nauru's "Our Airline." Plus, Taiwan
provides each Minister A$5,000 per month and all other
government MPs A$2,500 per month in "project funding" that
requires minimal accounting. One MP told us he uses his
portion to buy daily breakfast for all school children in his
district. Taiwan reportedly is also giving Nauru 100 tons of
rice, which the Nauru Government then sells to the public at
a discount price, to the consternation of Australian rice
exporters. (Note: As point of comparison, Australian FM
Downer in July signed a new MOU that will provide Nauru A$15
million per year for the next two years.)

Nauru also sent a Taiwan Amb packing
--------------

9. (C) President Scotty informed us that Taiwan's recent
change of ambassadors was not just because the previous one
had reached age 65. He had been too "aloof" and had "needed
more energy." He had not been sufficiently active socially,

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and presumably had failed to spread sufficient largess.
Given PRC activities, both Taiwan and the Scotty Government
desired change. The former ambassador had not wanted to
leave, but he left. The new one was to arrive on July 27.

Australian lobbying on behalf of the PRC
--------------

10. (C) Scotty told us Australia, which has the biggest
assistance program to Nauru, has pushed for Nauru to align
with the PRC. Scotty figures that is none of Australia's
business and has resisted. (Note: on a past visit to Tuvalu,
we heard a similar account of Australian lobbying for the
PRC.)

Purse-seiner offers
--------------

11. (C) Taiwan has offered used purse-seiner tuna boats to
Tuvalu and Nauru (one each) and the Marshalls (two). It is
possible similar offers have been made to the other
Taiwan-affiliated Pacific nations. We asked if Taiwan has
coordinated its purse-seiner offers with the Western and
Central Pacific Fisheries Commission (WCPFC). The Tuvalu
Deputy PM said his government realizes it needs a blessing
from the WCPFC. He suggested the current WCPFC limit on the
number of purse-seiners permitted to fish could be maintained
by inserting the island-state boats and dropping some of the
distant-water boats. He said the Forum Fisheries Commission
discussed the issue last May in New Zealand, and further
discussion will take place at the WCPFC annual meeting in
December.

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

12. (C) The China/Taiwan competition remains heated in the
Pacific. From what we have observed, each side does what it
deems necessary to try to maintain or gain allegiance in each
small nation. Some inducements are legitimate project aid.
Some are straight-out government budget supplements. Some,
like the purse-seiners, appear to be based on flawed concepts
that could frustrate regional-development goals. And some
are under-the-table bribes and vote-buying efforts. It is in
the region's interest, and the USG's, to encourage good
behavior by both China and Taiwan in coordination with other
donors, and to discourage illegality by both. We know both
China and Taiwan are aware of USG seriousness, from past
high-level lobbying of both. From what we heard in Tuvalu,
Kiribati, and Nauru, the message still bears repeating.
DINGER