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 TAIPEI 00001433 002 OF 004 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 TAIPEI 00001433 003 OF 004 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. TAIPEI 00001433 004 OF 004 -------------- ¶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