DPP CANDIDATE FRANK HSIEH ON BILATERAL RELATIONS

S E C R E T SECTION 01 OF 03 TAIPEI 002419

SIPDIS

SIPDIS
NOFORN

E.O. 12958: DECL: 10/30/2032
TAGS: PGOV PREL TW
SUBJECT: DPP CANDIDATE FRANK HSIEH ON BILATERAL RELATIONS
AND PRESIDENTIAL CAMPAIGN


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


1. (C) Summary: The Director and DPP candidate Frank Hsieh
discussed the UN referendum, U.S.-Taiwan and cross-Strait
relations, and the presidential election campaign in a
meeting at Hsieh's headquarters on October 29. The Director
stressed the need to avoid further problems and to take steps
to repair U.S.-Taiwan relations. While claiming that the
DPP's UN referendum cannot be stopped, Hsieh agreed on the
importance of avoiding further steps that could raise
cross-Strait tensions. Hsieh pointed to his commitment not
to support a referendum on Taiwan independence, noting that
he had blocked then-DPP Chairman Yu Shyi-kun's effort to pass
a "Normal Country Resolution" calling for just such a
referendum. Hsieh stressed he would work to restore
bilateral trust if elected president, and he would also seek
to open a dialogue with the PRC. On the presidential
election, Hsieh said his campaigning will move into higher
gear after the Legislative Yuan (LY) election in January, and
predicted he will gradually overtake KMT candidate Ma
Ying-jeou in the final months of the campaign. End Summary.



2. (C) The Director met with DPP candidate Frank Hsieh late
on October 29 to brief Hsieh on his recent consultations in
Hawaii and to discuss the Taiwan presidential election.
Hsieh was accompanied by campaign manager Lee Ying-yuan and
international affairs director Bikhim Hsiao. Senior
officials in Washington and at PACOM are quite interested in
Taiwan developments, including the UN referendum and
attitudes of the presidential candidates toward the U.S. and
the PRC, the Director noted, adding that they are also
focused on PLA modernization. Noting that he recently had a
discussion with Deputy Secretary Negroponte, the Director
pointed to Negroponte's October 24 speech on U.S.-China
relations in New York. In his speech, the Deputy Secretary
made clear our non-support for Taiwan independence, U.S.
opposition to unilateral acts by either side that attempt to
change the status quo, our concern about the PLA buildup
opposite Taiwan, and our belief that attempts by Beijing to
limit Taiwan's appropriate international participation are
unhelpful.


3. (C) In disregard of U.S. objections, the Director
observed, President Chen seems bent on pressing ahead
strongly with the UN referendum to shore up his reputation.
He urged Hsieh to draw a line between himself and the
President and at least refrain from pushing the referendum
enthusiastically. The basic problem is the PRC reaction, the
Director stressed, noting, however, that PRC President Hu
Jintao seemed less hard-line in his statements on Taiwan at
the recent 17th Party Congress than some lower level Chinese
officials have previously been.


4. (C) Hsieh asserted that the DPP's UN referendum campaign
cannot be stopped, noting that the signature drive has
already secured between one and two million signatures.
Acknowledging that the U.S. enjoys great influence in Taiwan,
Hsieh said some people are questioning whether they should
support a UN referendum that the U.S. opposes. While the KMT
is also proposing a UN referendum, the idea of combining the
DPP and KMT referenda has proven unworkable. During his
visit to the U.S., Hsieh recalled, he had expressed his
commitment not to support a referendum on independence.
Because of this position, Hsieh said, he subsequently told
President Chen that he opposed then-DPP Chairman Yu
Shyi-kun's radical version of the Normal Country Resolution
(NCR),which called for a referendum on independence.


5. (C) The whole party, not just President Chen, is involved
in the UN referendum issue, Hsieh pointed out. Noting that
his leg injury has limited his recent campaign activities,
Hsieh acknowledged he has been "slow" compared to Chen on
this issue. Hsieh suggested that Beijing's strategy is to
press the U.S. to use its influence with Taiwan on the UN
issue. He predicted that the PRC will not use force over the
UN referendum but will wait and see what Taiwan's new

TAIPEI 00002419 002 OF 003


president will say after the election. The inauguration of a
new Taiwan president on May 20, 2008, will mean a changed
situation.


6. (C) Hsieh said he had made the argument during a DPP
internal meeting on the UN initiative that despite
differences, Taiwan and the U.S. share a common view that
Taiwan is not part of the PRC and the PRC cannot represent
Taiwan. The DPP is traditionally a pro-U.S. party, Hsieh
pointed out. It is important that the differences between
the U.S. and Taiwan over the UN referendum not be
misconstrued as indicating a major conflict between the U.S.
and Taiwan. U.S. statements have an effect on Taiwan public
opinion, Hsieh added.


7. (C) The Director pointed out that Deep Green extremists
exacerbate U.S. concerns when they argue that using the name
"Taiwan" to apply to the UN supersedes the constitutional
designation of "Republic of China" as Taiwan's name.
Acknowledging that some Deep Green supporters have voiced
such arguments, Hsieh stressed that they and others actually
understand clearly that changing the national name requires a
change in the constitution. A constitutional change is not
feasible for at least the next five years, Hsieh observed,
explaining that the political balance in the LY to be elected
next January will not allow for such an initiative. The
Director urged Hsieh to put off into the very distant future
any possible consideration of such issues.


8. (C) According to Hsieh, the UN referendum will educate
people that the PRC does not represent Taiwan. Without
physical occupation, he stressed, the PRC cannot represent
Taiwan. Taiwan cannot become independent by passing a NCR,
as Yu was suggesting, but only from war. However, Taiwan is
a middle class society and has no interest in going to war.
Taiwan cannot change the international power structure, and
therefore has to survive under the realities of the current
international system.


9. (C) Noting that the UN referendum was the latest in a
series of steps by the DPP administration that have damaged
U.S.-Taiwan relations, the Director urged Hsieh to work to
avoid any new problems. The question for the future will be
how to restore good bilateral relations after Taiwan and the
U.S. both elect new presidents. In 2000, the Director
recalled, President Chen and the DPP came into office without
experience, but this will not be the case in 2008, regardless
of who wins the Taiwan election. While respecting Taiwan's
democracy, the U.S. also has basic security interests, and we
do not want to see democracy and security interests in
opposition. Hsieh pledged to work to repair bilateral
relations and also suggested that regular meetings to
exchange views with the Director would be helpful.


10. (C) Hsieh observed that better PRC-U.S. communications
seem to have reduced Chinese anxieties about Taiwan, and Hu
Jintao appears confident that time is on the PRC's side. Hu
wants to highlight economic progress as the major achievement
of his second term, and he will not want trouble over Taiwan
during this period, Hsieh added. While the PRC will object
to the UN referendum, this is not a reason to fight, and
Beijing realizes that it cannot win international support for
war over such an issue. Beijing is more worried about
possible next steps by Taiwan, Hsieh observed, explaining he
had blocked Yu Shyi-kun's radical NCR language because he
realized that the call for name change would be
confrontational. If elected, Hsieh said, his approach to
cross-Strait dialogue would be to "keep talking" but not
arrive at any conclusion, because a conclusion at this stage
would inevitably be unfavorable to Taiwan.


11. (S/NF) Asked whether he had any contacts with the
Chinese, Hsieh said no, and, pointing to the ceiling, he
added that President Chen would immediately learn of such
contacts. When mayor of Kaohsiung in 2000 and just before
assuming the DPP chairmanship, Hsieh recalled, Beijing had
invited him to visit Xiamen. President Chen asked to see him
at the time, and Hsieh told Chen he thought he should make

TAIPEI 00002419 003 OF 003


the visit. Chen then showed him a stack of National Security
Bureau (NSB) reports, according to which the PRC was planning
to "use Hsieh to suppress Chen" (LaChang YaBian),and the
proposed visit was called off. Hsieh added that the NSB is
always quick to prepare a file of reports on anyone President
Chen complains about.


12. (C) Acknowledging that KMT candidate Ma Ying-jeou
retains the lead in current public opinion polling, Hsieh
pointed out that the poll numbers in at least some local
districts, including Kaohsiung City, are clearly skewed in
favor of Ma and need to be adjusted. Hsieh said he uses
internal polling to track differences between support for him
and Ma on particular issues or characteristics. Hsieh noted
that he is just seven percent behind Ma on the economy,
adding that his not talking a great deal about the economy is
part of his election strategy. The polling category where Ma
comes out strongest is "international perspective," where Ma
currently is running 30 points ahead of Hsieh (55-20
percent),despite Hsieh's international experience in Japan.
Hsieh noted that he comes out stronger in the polls than Ma
on "decisiveness." He also said Ma's previously big lead on
"integrity" has narrowed somewhat. Hsieh predicted he will
eventually beat Ma on this issue because, unlike Ma, he has
no "special allowance" problem. Hsieh added that he is not
raising this issue now because he does not want the
prosecutors to be put under greater pressure.


13. (C) Hsieh said he has good coordination with President
Chen, with whom he meets privately every week. Chen's
enthusiasm is important for stirring up the base. However,
Chen is a polarizing figure, and it is not yet clear if
certain of his efforts, such as his criticisms of Ma's
father, are helpful to the campaign, Hsieh observed. Chen is
polite and will listen to him if he complains, Hsieh added.
Currently, the media is focused on the battle between Ma and
Chen, the outgoing president. Chen and Ma are both filled
with resentment against each other, and the two of them
should step down together, Hsieh jokingly suggested. The KMT
strategy is to try to turn the election into a referendum on
President Chen and to make Hsieh vanish, he added. Following
the LY elections in January, Hsieh said, he will adjust his
campaign strategy and also hold debates with Ma, who does not
want to debate him now. At that stage, Hsieh predicted, he
will gradually overtake Ma in the polls.


14. (C) Hsieh said he does not share the pessimistic views
of some that the DPP might win only 30-40 out of 113 seats in
the LY elections in January. Having resumed the DPP
chairmanship, President Chen can unite the party in ways that
no one else, including himself, could do, Hsieh explained.
By contrast, the KMT is disunited and lacks the resources it
would need to resolve differences on the local level. In
addition, Hsieh asserted, KMT Chairman Wu Poh-hsiung lacks
the clout to solve the party's problems. Hsieh also
predicted that the pan-Green Taiwan Solidarity Union (TSU)
will only win two LY districts and not more than three-four
seats total, including one or two party list seats.

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


15. (C) Hsieh seemed relaxed and confident in the progress
of his campaign, perhaps believing that Ma is wearing himself
down in his ongoing rhetorical battle with the feisty
President Chen. Hsieh may be hoping to pick up the pieces
after Chen and Ma have damaged each other sufficiently.
Hsieh is well known for his debating skills and will be a
formidable opponent for Ma when the two begin to engage more
directly later in the campaign, Hsieh understands well the
difficulties the U.S.-Taiwan relationship currently face and
the challenges he would have to address in rebuilding trust
if he wins the presidential election next March.
YOUNG