KMT CANDIDATE MA YING-JEOU ON PRESIDENTIAL

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002427

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/31/2032
TAGS: PGOV TW
SUBJECT: KMT CANDIDATE MA YING-JEOU ON PRESIDENTIAL
CAMPAIGN, CROSS-STRAIT RELATIONS, DEFENSE BUDGET, REFERENDA

Classified By: Director Stephen M. Young, Reason(s): 1.4 (B/D).


1. (C) Summary: KMT presidential candidate Ma Ying-jeou
discussed the presidential campaign, cross-Strait relations,
the UN referendum, defense budget issues and U.S.-Taiwan
relations during a meeting with the Director at Ma's campaign
headquarters on October 30. Ma said he plans to continue his
successful home-stay program until right before the
presidential election, but will go on hiatus for the next two
months to campaign for KMT legislative candidates. Ma
welcomed PRC President Hu Jintao's recent proposal to restart
peace negotiations, with the caveat that Taiwan's future
status is not up for negotiation. Beijing was not happy
about the KMT UN referendum, Ma stated, but after KMT efforts
to explain this decision, Beijing now understands it was
necessary to deflect DPP attacks. Referendum voting
procedures threaten to complicate the legislative and
presidential elections, Ma worried, but neither UN referendum
is likely to pass.


2. (C) The Director expressed appreciation for KMT
cooperation in passing the 2008 defense budget out of
committee two weeks ago. Ma and his defense advisor,
legislator Su Chi were optimistic that the defense budget,
with funding for PAC-IIIs and F-16s, will pass before the
Legislative Yuan's (LY) December 14 recess. Su asked what
the USG position was on Taiwan's Hsiung-Feng II-E missile
program. The Director stressed that Taiwan should use its
resources to develop a strong defensive capability, and avoid
deploying purely offensive weapons, which could provoke a
cross-Strait military crisis. He told Ma the U.S. will want
to discuss Taiwan's defense policy in detail with whoever
wins next March's presidential elections. End Summary.

PRESIDENTIAL CAMPAIGN
--------------


3. (C) The Director met with KMT candidate Ma Ying-jeou late
in the afternoon on October 30. Ma was accompanied by
legislator Su Chi and former ambassador John Feng. A relaxed
and slightly heavier Ma expressed confidence that his recent
"home-stay" program had boosted his appeal to voters,
especially in the central and southern areas he had already
visited. Ma described an increasingly warm and positive
"feeling" during his almost daily interactions with the
public. He noted that voters had been turning up in large
numbers to campaign events of their own accord, without
mobilization efforts by the campaign.


4. (C) In addition to this anecdotal evidence, Ma claimed KMT
internal opinion polls also supported the conclusion that the
home-stay program had increased voters' belief that Ma was
sensitive to "local consciousness" concerns. Ma said it only
stands to reason that reaching out to voters on their home
turf would increase his local popularity. If he has the
energy, Ma plans to continue the home-stay program until just
before the election; however, for the next two months he will
focus on campaigning for KMT legislative candidates. Ma
hopes the winning candidates will return the favor by
campaigning for him after the LY election on January 12, 2008.


5. (C) The Director asked Ma whether his campaign themes of
economic recovery and anti-corruption would be enough to
overcome President Chen's "ethnic identity" strategy. Ma
acknowledged that Chen and the DPP continue to paint him as
an outsider who would "sell out" Taiwan to China. But he
claimed that voters, beleaguered by economic pressures, are
less receptive to these attacks than they were even four
years ago. Taking the opportunity to denigrate his DPP
rival, Ma claimed that business revenues along Kaohsiung's
Love River and City Light Park (two of Hsieh's biggest
redevelopment projects) had dropped by 25 to 50 percent,
forcing many businesses to close.

CROSS-STRAIT RELATIONS
--------------


6. (C) The Director observed that PRC President Hu Jintao's
recent remarks could be viewed as an olive branch to whomever
assumed Taiwan's presidency in May 2008. Unlike lower level

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officials like TAO Director Chen Yunlin, who has described
the current situation as a crisis which could lead to war, Hu
chose to emphasize the prospects for future cooperation. Ma
claimed that Hu's ideas track closely with Ma's own position,
supporting resumption of peace negotiations under the "'92
Consensus" of "one China, different interpretations." Ma
emphasized that the Taiwan people would decide Taiwan's
future status, which was not up for negotiation.


7. (C) Ma denied having any direct or indirect personal
channels of communication with Beijing, but stressed the
extensive network of cross-Strait contacts available to him
through the KMT Central Committee Mainland Affairs
Department. Ma also said PRC contacts had told the KMT that
Frank Hsieh had sent envoys to the PRC several times, aiming
to convince Beijing that Hsieh was "different" from Chen
Shui-bian. (Comment: We hadn't heard this. End Comment.)


8. (C) At the outset, Beijing had privately expressed its
displeasure to the KMT over the party's decision to go
forward with a UN referendum of its own, asking why KMT
leaders felt compelled to respond in kind to the DPP's UN
referendum strategy. Ma expressed the belief that Beijing
now understood that the KMT needed its own referendum to
deflect criticism that it "does not love Taiwan," but only
after the KMT (and, Ma suspected, the United States, too) had
spent considerable energy explaining the demands of Taiwan's
democratic political environment. The KMT policy toward
re-admission to the UN has not changed from the previous 20
years, Ma insisted, except that it has now been formulated as
a referendum for public consideration. Many deep-Blues
remain upset that the KMT launched its own UN referendum
instead of taking a stronger stand against the DPP proposal,
Ma acknowledged. But that tack, he suggested, would have
left the KMT open to DPP attacks that the KMT was unwilling
to fight for Taiwan's "dignity."

REFERENDUM ISSUES
--------------


9. (C) Ma asserted that the "one-step" voting format proposed
by the DPP-dominated Central Election Commission (CEC) for
the upcoming legislative election is a "recipe for disaster."
Under the CEC proposal, voters in the January 12 LY election
would be given four ballots at once: one to choose a
legislative candidate, one to choose a political party, one
on the KMT-sponsored "anti-corruption" referendum, and
another on the DPP's "KMT illicit assets" referendum. The
CEC has done nothing to educate voters about the brand new
legislative voting system, Ma argued, and adding referenda to
the mix would only increase chances that voters will become
confused and miscast their votes.


10. (C) The one-step process could also delay the legislative
election results if a recount of the referendum ballots was
necessary, Ma insisted. The KMT, by contrast, proposes a
two-step process, in which voters would cast votes for the
candidate and party of their choice, and then request one or
more referenda ballots if they chose to do so. (Note:
Eighteen KMT city mayors and county magistrates announced on
October 24 that they would disregard CEC orders to use the
one-step process, to avoid unnecessary complications of the
voting process. This action could theoretically set up a
legal standoff with the central government, if it insists
local authorities have overstepped their bounds. End note.)


11. (C) Ma argued that the KMT mayors and magistrates were
acting "reasonably" in taking a stand against the CEC's
misguided one-step proposal. The Director then asked whether
Ma was concerned that, if he were to be elected president,
DPP mayors and magistrates might similarly pick and choose
which central government decisions to follow. Ma insisted
that, under the law, city and county governments were vested
with the authority to decide voting procedures in their
respective jurisdictions and did not have to defer to the
CEC. The CEC does not want to test its authority on this
question, Ma claimed, and for this reason has postponed its
decision on the matter until November.


12. (C) Ma claimed that he "definitely" wants the KMT's UN

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referendum to pass, but does not expect it or the DPP version
to do so. According to KMT polls, 20 percent of the public
support the DPP UN proposal, while only 16 support the KMT
version. Thirty-one percent of the public will not
participate, and the remaining 33 percent remain undecided or
have no opinion. Ma predicted that if the presidential and
referenda ballots are combined as the CEC has proposed, it
will increase the chances of voter confusion, making it much
more difficult to predict the referenda voting results. Ma
claimed it is "risky" for him as the KMT candidate to discuss
the referendum, because it gives voters the impression he
does not give sufficient weight to their economic hardships.

DEFENSE BUDGET
--------------


13. (C) The Director expressed appreciation for the KMT's
cooperation in passing the 2008 Defense Budget out of the LY
Defense Budget Joint Committee and onto the full LY on
October 16. He asked whether Ma and his defense advisor Su
Chi expected the budget to pass before the LY recessed on
December 14. Both Ma and Su expressed optimism that the
budget could pass by then, but did not make any promises.


14. (C) Su Chi asked the Director whether the U.S. had
formulated its policy with respect to Taiwan's development
and deployment of the Hsiung-fung II-E (HF-II-E) cruise
missiles. The Director reiterated the U.S. position that
Taiwan should place emphasis on its defense, and avoid
deployment of purely offensive weaponry. If Ma is elected,
the Director continued, defense experts from both sides must
discuss HF-II-E range, warhead size, and other issues in
order to clarify U.S. policy. The Director emphasized that
Taiwan must not do anything which would cause the
international community to question its non-aggressor status.
He also told Ma that the U.S. will want to discuss Taiwan's
defense policy in detail with whoever wins next March's
presidential election.

COMMENT
--------------


15. (C) Ma struck us as more relaxed and confident than we've
seen him in recent visits. Even DPP critics credit Ma's
"Long Stay" program as building his credibility with
important constituencies. That said, it is still early in
the campaign. The KMT presidential candidate in 2000 and
2004 squandered similar early leads through overconfidence
and inept campaigning strategies. Ma is presumably well
aware of this history, as well as the DPP's tradition of
furious comebacks in the last stages of the race. It remains
to be seen how effectively he will counter his opponents'
attacks in the crucial final months of this seminal political
contest.
YOUNG