KMT MAINLAND AFFAIRS DIRECTOR ON PRC REACTION TO

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001782 SIPDIS SIPDIS E.O. 12958: DECL: 08/08/2032 TAGS: PINR PGOV TW SUBJECT: KMT MAINLAND AFFAIRS DIRECTOR ON PRC REACTION TO DPP UN REFERENDUM Classified By: AIT Deputy Director Robert S. Wang, Reason(s): 1.4 (B/D) . ¶1. (C) Summary: In a recent meeting with AIT, KMT Mainland Affairs Director Chang Jung-kung asserted that Beijing considers the DPP UN referendum to be a possible violation of its Anti-Secession Law, and is weighing the idea of economic sanctions against Taiwan if the referendum "goes too far." According to Chang, PRC Taiwan Affairs Office (TAO) Director Chen Yunlin and other TAO officials told him in late July that President Hu Jintao is under pressure from hardliners, which he has resisted so far, to respond to the DPP UN referendum before the Chinese Communist Party National Party Congress convenes in October. The KMT leadership is divided on how to proceed with their version of a UN referendum -- some would withdraw it if the DPP withdraws its proposal, while others would press on to assure the public of the KMT's sincerity in protecting Taiwan's international interests. In other comments, Chang discussed the background of KMT Honorary Chairman Lien Chan's poor relations with presidential candidate Ma Ying-jeou. End Summary. KMT Talks Cross-Strait with TAO Chen Yunlin -------------- ¶2. (C) KMT Central Committee Mainland Affairs Policy Director Chang Jung-kung visited Beijing in late July, as part of a KMT delegation seeking better protections for Taiwan businesses operating in the Mainland. Chang told AIT on August 3 that he and KMT Vice Chairman Chiang Pin-Kung met several times with CPC Central Committee Taiwan Affairs Office (TAO) Director Chen Yunlin, and others from the TAO, to discuss cross-Strait developments. DPP UN Referendum Violates Anti-Secession Law? -------------- - ¶3. (C) According to Chang, officials close to Chen Yunlin told him that Beijing views the DPP referendum on UN membership for "Taiwan" as a possible violation of the PRC Anti-Secession Law (ASL) passed in March 2005. President Hu's government has not stated this position publicly for fear of strengthening the hand of hardliners critical of Hu's more flexible stance toward Taiwan. Nonetheless, Chang asserted, the Beijing leadership is considering some form of economic sanctions, perhaps even a blockade, if the referendum should "go too far." ¶4. (C) In response to a question, Chang maintained that Beijing would not wait until after March 2008, the date for a possible referendum, to decide how to react. The CCP will convene its 17th National Party Congress in October, Chang explained, and President Hu is under pressure to issue some kind of formal response to the DPP UN referendum before then. Chang maintained that the coming weeks would be a "crucial period" for cross-Strait relations. Chang also opined that this "crisis" was more dangerous than the 1999 row over then-President Lee Teng-hui's "two-state theory" because, unlike President Lee, President Chen does not have well established, credible back-channels to calm Beijing's fears. However, Chang continued, KMT Honorary Chairman Lien Chan's upcoming trip to Xinjiang and Chen Yunlin's proposed trip to the U.S. in September may provide opportunities to reduce concerns. (Comment: It is likely, however, that Chen Yunlin's trip to the U.S. will be designed to raise, rather than reduce, concerns. End Comment.) One UN Referendum at a Time, Please -------------- ¶5. (C) Chang said that Beijing had been preoccupied with the DPP referendum and therefore had not "had time" to consider or react to the KMT's version of a UN referendum. The KMT had taken pains to explain to China that because of upcoming elections, the KMT had to propose a referendum on UN membership to deflect DPP criticism that the KMT put its relationship with China before Taiwan's relations with the international community, Chang added. KMT Split on How to Proceed with UN Referendum -------------- - TAIPEI 00001782 002 OF 002 ¶6. (C) There are differences within the KMT on how to proceed with the UN referendum, Chang continued. Some in the KMT, including Lien Chan, believe the KMT cannot win at the DPP's referendum game, and would like to see both parties withdraw their respective UN proposals. Others, including KMT Chairman Wu Po-hsiung and Vice Chairman John Kuan (Kuan Chung) believe the KMT should pursue its UN referendum even if the DPP withdraws its proposal; otherwise, the public will perceive the KMT UN referendum as "insincere." Moreover, Chang said, the KMT strategy has been to pair its UN referendum with a referendum to expand cross-Strait air links. The first demonstrates the KMT's "love for Taiwan," Chang explained, while the second is part of the KMT's "China-centric" strategy for economic growth. Chang said he and (unnamed) others are concerned that the DPP-controlled Central Election Commission may find a way to derail the KMT's UN referendum. Without the cover of its UN referendum, the air links proposal could make the KMT look too "pro-China" to Taiwan's moderate swing voters. Unless It's Bad, Voters Don't Think About Cross-Strait -------------- -------------- ¶7. (C) According to Chang, unless cross-Strait relations are in crisis, voters give very little weight to the issue at the polls. However, he added, when cross-Strait tensions reach a dangerous point, KMT polling suggests that voters tend to view the KMT as more capable of managing relations and restoring calm. Comment -------------- ¶8. (C) In the past, Chang has given us useful insights into KMT views of Beijing's thinking on various topics. But his remarks about China's reaction to the DPP UN referendum should be taken with a grain of salt. By putting alarming words about "economic sanctions," even a "blockade" into Beijing's mouth, the KMT could be trying to goad the U.S. into increasing pressure on President Chen to withdraw the DPP UN referendum so that the KMT would have the excuse it needs to pull back its own referendum. Bio Note: Lien Chan Relations with Ma Ying-jeou -------------- -- ¶9. (C) Commenting on the chilly relationship between Lien and KMT presidential candidate Ma Ying-jeou, Chang attributed Lien's dislike of Ma to four past events: (1) in 1996, while Lien was Premier, Ma publicly criticized the KMT administration for doing too little to apprehend the kidnapper of the child of a prominent celebrity; (2) immediately after the March 19, 2004 shooting of President Chen and Vice President Lu, Ma privately urged presidential candidate Lien to cease all campaign activities; (3) the next day, Ma urged Lien concede defeat to Chen, instead of contesting the election result; and (4) on March 27, 2004, Ma as Taipei Mayor vowed to arrest anyone attending a KMT rally demanding the election result be nullified. According to Chang, these incidents persuaded Lien that Ma puts his own political interests before those of the party. (Comment: As a member of Lien's inner circle, Chang's often critical appraisals of Ma Ying-jeou's personal and political styles probably reflect Lien's views. End Comment.) YOUNG