DPP CANDIDATE FRANK HSIEH DISCUSSES PRESIDENTIAL

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 001433

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/22/2017
TAGS: PGOV PREL TW
SUBJECT: DPP CANDIDATE FRANK HSIEH DISCUSSES PRESIDENTIAL
CAMPAIGN AND UN REFERENDUM WITH AIT CHAIRMAN RAY BURGHARDT


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


1. (C) Summary: DPP candidate Frank Hsieh told AIT Chairman
Burghardt on June 16 that he will keep his distance from
President Chen and focus on attracting moderate swing voters
during his presidential campaign. Hsieh said he supports
further cross-Strait opening but with appropriate conditions,
including measures to prevent the export of sensitive
technologies to China. Burghardt and the Director stressed
that holding a referendum on joining the UN under the name
"Taiwan" would be seen as trying to mobilize public support
for formal name change, which is inconsistent with President
Chen's "four noes" pledge. Without specifically addressing
the merits of pushing the referendum at this time, Hsieh
responded that he could not change his longstanding and
well-known position supporting Taiwan joining the UN. Hsieh
added that President Chen is very "resolute" and there is
consensus within the DPP on the issue. End Summary.

Upcoming Elections
--------------


2. (C) AIT Chairman Ray Burghardt, accompanied by Director
Young, met with DPP presidential candidate Frank Hsieh at
Hsieh's office on June 16. Hsieh was accompanied by campaign
manager Lee Ying-yuan and TECRO Council Member and Hsieh
adviser Corey Chen. Hsieh told Burghardt that he expects KMT
candidate Ma Ying-jeou to emphasize economic and cross-Strait
issues during the presidential election campaign. While he
and Ma agree on the desirability of opening direct (flight)
links, Hsieh said he would not agree to preconditions such as
accepting the one-China principle. Hsieh added that he
supports the use of charter flights for direct cross-Strait
links to sidestep the controversy over whether the flights
are international or domestic.


3. (C) Hsieh said he favors allowing Chinese investment in
Taiwan and visits by Chinese tourists, but there need to be
conditions. Ma, who attaches no conditions to his proposals,
talks about allowing 10,000 Chinese tourists per day to visit
Taiwan, but not about the steps needed to ensure that all
tourists return to China after their visits. In addition,
Ma's setting of deadlines for cross-Strait opening makes it
impossible for Taiwan to have effective negotiating
positions. Hsieh said he would require businesses in Taiwan
that want to invest in China to use more of their own capital
and not borrow too much from banks in Taiwan. While general
limits on Taiwan business investment in China are not needed,
there must be restrictions to protect advanced, defense, and
agricultural technologies, Hsieh said.


4. (C) Because of Ma's emphasis on his own cleanness and
integrity in contrast to alleged DPP corruption, the KMT
candidate has suffered in public opinion polls since his
indictment this February for misuse of special Taipei mayoral
funds. Hsieh added that Ma is currently being investigated
in conjunction with three other cases. While there were
three investigations against him also, Hsieh said, he was
confident he would have no problem. These were old cases
from the time he was mayor in Kaohsiung, he explained.
Because most personnel in the Ministry of Justice
Investigation Bureau are pro-Blue, they must not have
anything or they would have indicted him long ago, Hsieh
observed.


5. (C) Hsieh noted that he is "non-mainstream" in the DPP
and needs to keep some distance from other DPP leaders in
order to attract centrist, swing voters. Too much
cooperation with President Chen or Vice President Annette Lu
would hurt his election chances, Hsieh noted. The KMT will
try to make the presidential election a contest between
parties and a vote of confidence on DPP President Chen
Shui-bian's record, Hsieh suggested. Therefore, he will need
to maintain distance but also avoid conflicts with Chen. The
KMT and DPP will pursue similar campaign strategies, Hsieh
predicted. While the KMT will try to identify him with Chen
Shui-bian and the Deep Green, Hsieh said he would
characterize Ma as Deep Blue and a unificationist. Hsieh

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also noted his confidence that he can retain the support of
the Deep Green, who will vote for him even if they may not be
overly enthusiastic.


6. (C) Noting that President Chen has asked him repeatedly
about his vice presidential selection, Hsieh said he plans to
make his decision in August. Hsieh said that no final
decision has been made on whether to combine the presidential
and legislative elections on the same day. Holding the
elections together would boost the legislative election
turnout, which is traditionally lower than for the
presidential election. This would help the DPP LY candidates
but hurt him, Hsieh noted. However, he could accept holding
the elections together because even if he won the presidency,
he would face a difficult situation if the DPP did poorly in
the LY elections.


7. (C) Hsieh predicted that neither the DPP nor the KMT will
win a majority of the seats in the upcoming Legislative Yuan
(LY) elections, adding that he expected non-party and small
party candidates to win 10-15 of the total 113 seats. If
elected president, Hsieh said, his top priority would be to
work with non-party and small party legislators to form a
majority in the LY and a "coalition cabinet." President Chen
has never done this, Hsieh pointed out, and the result has
been LY gridlock, as symbolized by the difficulty in passing
the arms procurement budget. Hsieh added that he would not
appoint a KMT premier, however, because he would lose control
the policy agenda in such a case.

UN Referendum
--------------


8. (C) Hsieh told Burghardt that he could not oppose the
DPP-proposed referendum on joining the UN under the name
"Taiwan," because he has long advocated joining the UN under
the name Taiwan. This position is also incorporated in a DPP
resolution. In the early 1990's, Hsieh recalled, he had
debated the issue on television with the KMT's John Chiang
(then John Chang). Also, he had traveled twice to the UN at
the time, creating the slogan, "UN open for Taiwan." This
background and the party resolution would make it difficult
for him to change his position, Hsieh explained.


9. (C) Burghardt pointed out that the U.S. will inevitably
be asked for its reaction if Taiwan pursues a referendum on
entering the UN under the name "Taiwan." We would have to
express our opposition and say the referendum was not a good
idea. Some could interpret this as indicating the U.S. was
unhappy with the DPP, although we of course would have no
intention of influencing the election.


10. (C) Hsieh responded that President Chen is very resolute
and also there is a general consensus on this issue within
the DPP. While China will criticize Taiwan, there will not
be tensions since Taiwan's application to join the UN cannot
succeed. Director Young and Burghardt pointed out there is a
distinction between applying to join the UN under the name
"Taiwan" and holding a referendum on the issue. Holding a
referendum would be seen as trying to mobilize sentiment in
Taiwan for formal name change. Because the DPP already has
one referendum in the works on recovering "ill-gotten" KMT
party assets, it is unclear why the DPP feels it needs to
push hard to hold a second referendum on the UN issue, the
Director suggested. Holding a referendum on the UN in
conjunction with the election could harm U.S.-Taiwan
relations, he stressed, pointing out that this issue relates
to the spirit of the "four noes," which includes the pledge
that Taiwan will not change its formal name (the "Republic of
China").


11. (C) The name "Republic of China" creates confusion in
the international arena, Hsieh argued. If Beijing wants a
"one China, separate interpretations" framework, then it
should recognize the ROC constitution. Hsieh recalled he had
met with People First Party Chairman James Soong prior to
Soong's 2005 trip to China. At Hsieh's request, Soong had
proposed a "one China framework" ("xianfa izhong" or
"constitutional one China"),but Chinese President Hu Jintao

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had rejected this formulation, agreeing only to "cross-Strait
one China" (liang'an izhong). Hsieh said that while he has
tried to protect the ROC constitution, Beijing has been
unwilling to recognize the ROC and its constitution and has
continued to squeeze Taiwan internationally. In addition,
Hsieh asserted, China actually likes the name "Taiwan," as
indicated by its preference for the name "Taiwan, China."


12. (C) Hsieh suggested the two sides of the Strait should
both have confidence that time is on their side and therefore
there is no need to push for an urgent resolution. The
Chinese should be looking at the future thirty years from
now, thinking that most Taiwanese then will want to be
Chinese and will support unification. Taiwan, which is now
at a different level than the PRC, should be confident about
the future because it has the most open society, most
democratic politics, and greatest cultural diversity of any
Chinese society. While Taiwan's older industries are moving
to China, this also means that their pollution is moving to
China, which gives Taiwan an opportunity to create a clean
environment. Further, as some traditional Taiwan-invested
industries leave China for lower wage areas such as India and
Vietnam, this will give Taiwan a new opportunity to promote
the "Go South" approach with greater effectiveness than in
the past. Hsieh voiced optimism about Taiwan's economic
future, citing the rising real estate market and the low
unemployment rate. Taiwan should emphasize its soft economy,
including high-tech and services, and it can also develop
anti-pollution technology and tourism. Although the economy
is doing well, the Taiwan people are not happy, Hsieh
observed. The problem is not the economy but the political
deadlock and the fact that the people cannot foresee their
future, he explained.

Arms Procurement
--------------


13. (C) Noting that the LY had finally passed portions of
the arms procurement budget on June 15, Chairman Burghardt
and Director Young expressed hope that the LY would pass a
supplementary budget to procure PAC-III missiles and to raise
the level of defense spending to 2.85 percent of GDP. Taiwan
needs a reliable budget and strong defense to talk on an
equal basis to China, they explained. Hsieh said that some
Blue politicians have been expounding the theory that there
is no need to buy weapons, because there will be peace with
China. Furthermore, the money saved can be better directed
to government programs for people's livelihood. Chen
Chang-wen, a lawyer who represented the MND in the previous
KMT administration, now is also arguing that Taiwan does not
need new weapons because it will have a peace agreement with
China. This view is influencing the middle class. Public
opinion polls show a 50-50 split on support for arms
procurement. The DPP needs to put more emphasis on making
the case with the public for having a strong defense, Hsieh
concluded.

Kaohsiung Mayor Chen Chu
--------------


14. (C) Hsieh said he was very surprised by the June 15
court ruling that invalidated Kaohsiung Mayor Chen Chu's
election victory. This followed the KMT-requested vote
recount, which had confirmed Chen Chu's election. This new
ruling included a contrary minority opinion, which raised
questions about the grounds for the ruling and was a first in
Taiwan legal history, according to Hsieh. The DPP will have
to decide whether to appeal the ruling or perhaps to seek an
early by-election, which would require Chen Chu to resign.
According to Hsieh, the KMT wants to hold a by-election in
Kaohsiung at the same time as the 2008 presidential election,
because they think will help their presidential chances.
Hsieh explained that he could expect to carry Kaohsiung by
ten percent in the presidential election. But because a
mayoral election could be decided by just one percent,
holding the presidential and mayoral elections together could
significantly reduce the margin of his victory in Kaohsiung.

Plans for Hsieh's July Visit to the U.S.

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15. (C) In addition to visiting Washington during his
upcoming trip to the U.S., Hsieh noted, he would attend a
baseball game in New York, deliver a speech in Los Angeles,
and visit a renowned center for training guidedogs for the
blind in Detroit. Noting that he would be making a one-day
trip to Japan on June 19 to attend the funeral of a
pro-Taiwan politician, Hsieh said he hoped to pay a longer
visit to Japan in August or September, but added that he
might not be able to make the trip if the presidential
election ends up being scheduled in January.

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


16. (C) Hsieh's statements that he will pursue the moderate
political center during his presidential campaign and that he
favors a pragmatic cross-Strait policy are encouraging. On
the UN, however, his long-standing position of supporting UN
membership for Taiwan and the politics within the DPP will
make it difficult to persuade him to now oppose a referendum
on the issue.
YOUNG