AIT CHAIRMAN BURGHARDT AND DPP PRESIDENTIAL

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002590

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/11/2032
TAGS: PGOV TW
SUBJECT: AIT CHAIRMAN BURGHARDT AND DPP PRESIDENTIAL
CANDIDATE HSIEH DISCUSS UN REFERENDUM, CROSS-STRAIT
RELATIONS, AND ELECTION POLITICS

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


1. (C) Summary: DPP presidential candidate Frank Hsieh on
December 10 told AIT Chairman Burghardt that he is optimistic
the DPP-proposed UN referendum will pass on March 22, because
a majority of the people on Taiwan support greater
participation in international organizations. Hsieh said he
understands the U.S. position on the referendum and takes
those concerns seriously. If elected president, he said he
would affirm the referendum as an expression of the people's
desire for international space and the belief that Taiwan is
not part of the PRC, but he would not characterize the
referendum as a vote on independence. Hsieh emphasized that
he plans to take a cautious, deliberate approach to handling
the relationship with Beijing, focusing on economic issues
before tackling more difficult political questions. Hsieh
said his campaign was making good progress and is narrowing
the lead enjoyed by KMT candidate Ma Ying-jeou. End Summary.


Hsieh Pledges Moderate Tone on Referendum
--------------


2. (C) AIT Chairman Burghardt and DPP presidential
candidate Frank Hsieh (Chang-ting) met on December 10 to
discuss the DPP's UN referendum, cross-Strait relations, and
Taiwan election politics. Hsieh said he is optimistic that
the DPP-proposed UN referendum will pass on March 22 because
a majority of the people on Taiwan supports greater
participation in international organizations. He
acknowledged, however, that according to bi-monthly polls
conducted by the DPP, U.S. opposition to the measure has
reduced overall support among the voting public.


3. (C) Chairman Burghardt conveyed to Hsieh an oral message
from Secretary Rice (text in paragraphs 11-13). The Chairman
emphasized that the U.S. has the highest regard for Taiwan's
democracy, but deeply regrets the DPP decision to pursue a
referendum on UN membership under the name Taiwan, which
unnecessarily threatens stability in the Strait and Taiwan's
security. The U.S. urges Hsieh to distance himself from any
inflammatory claims President Chen may make regarding the
significance of the referendum and to avoid provocative or
independence-oriented steps in the course of the upcoming
elections. The U.S. also urges Hsieh to consider the effect
his possible inaugural speech could have on cross-Strait
stability and U.S-Taiwan relations.


4. (C) Hsieh said he understood the U.S. position on the
referendum and takes those concerns seriously. He pointed to
his consistent stance on the need to preserve peace and
stability across the Strait as evidence he would seek to
pursue a moderate course as president. Hsieh said as a DPP
member he supports the referendum initiative, but noted that
it was passed by his party before he became its presidential
candidate. If elected president, he would affirm the
referendum as an expression of the people's desire for
expanded participation in international organizations and the
belief that Taiwan is not part of the PRC. Hsieh emphasized
that he would resist pressure from the deep Green to go
further and would not characterize the referendum as a vote
on de jure independence. This was a position he already made
clear during his trip to Washington, when he rejected the
need for Taiwan to hold a referendum on independence. Hsieh
emphasized that as president-elect he would affirm this
interpretation of the UN referendum in public statements,
irrespective of any remarks President Chen may make or
pressure from deep Green fundamentalists.

Outlines Approach to Cross-Strait Relations
--------------


5. (C) Hsieh emphasized that as president he would take a
cautious, deliberate approach to handling the relationship
with Beijing. He said both sides need to have confidence in
order to pursue peaceful dialogue without rushing into
immediate reconciliation that could over the long-term harm
Taiwan's interests. Hsieh said he would work toward making

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progress on economic issues first, noting that he supports
the expansion of charter flights, further opening of PRC
tourism, and more flexibility in managing Taiwan high-tech
investment in the mainland. He said as president his
administration would look to the more relaxed U.S. standards
and regulations on high-tech transfer and investment in China
as a guide.


6. (C) On the political front, Hsieh said he would first
urge Beijing to give Taiwan some international breathing
space. The PRC's unrelenting effort to shrink Taiwan's
presence in international organizations and woo diplomatic
partners only generates more anti-China resentment on the
island. Relaxing the pressure, Hsieh asserted, would help
improve China's image, a necessary step before both sides can
begin to make progress on substantive political issues.
Hsieh emphasized that he would stick by these "core beliefs,"
despite the intense criticism they have engendered from the
deep Green and pro-independence media such as the Liberty
Times.

Satisfied with Progress of Presidential Campaign...
-------------- --------------


7. (C) Hsieh told the Chairman his presidential campaign
was progressing "so far so good." Although internal campaign
polls still show he lags behind KMT candidate Ma Ying-jeou,
the gap has been closing since September and Hsieh's polling
numbers continue to trend up. Hsieh said on the campaign
trail he has not demurred from going head-to-head against Ma
on economic issues, an area the KMT views as a DPP weakness
but which Hsieh said his performance in Kaohsiung and as
Premier demonstrate his own abilities and vision. Hsieh
noted he has a good working relationship with his running
mate, former Premier Su Tseng-chang, and expects to get a
boost with an endorsement from former President Lee Teng-hui
after the legislative elections when the TSU will no longer
be in direct competition with the DPP for votes.

...Though Chen is Both Boon and Bane
--------------


8. (C) Asked about his relationship with President Chen,
Hsieh said it presented him with a "management challenge."
He could neither afford to break fully with the President nor
fully embrace him. Hsieh would lose the election without
Chen's support, which helps energize the deep Green base. If
the election becomes a vote of confidence on Present Chen,
however, Hsieh would not be able to gain enough votes from
independents to win. Hsieh said Chen was "heartfelt" in his
advice and support for the legislative and presidential
races, noting that the President routinely attends 12 or more
election-related events or activities a day. This contrasts
with Hsieh's average of 6 activities a day, which he said
resulted more from limited resources; he joked he does not
enjoying the convenience of an "Air Force One."
Nevertheless, Hsieh suggested that the president's often
controversial statements and public criticism of his
cross-Strait policy plans were not helping the campaign.
Hsieh's campaign manager, Y.Y. Lee, interjected saying the
reality is Hsieh and Chen have a lot of baggage, over 20
years worth of a relationship, to handle.

Clarifies Position on Constitutional Reform
--------------


9. (C) Prior to the meeting, Hsieh's international affairs
director Bikkim Hsiao told the Chairman she was aware that
U.S. officials had expressed some concern over Hsieh's
comments on constitutional reform during his Washington
visit. Hsiao explained that Hsieh had not pledged to revise
the constitution within five years if elected president.
Rather, he had said such work could begin at the earliest in
five years, and only if two conditions had been met. The DPP
would have to win three-quarters of the legislature in 2012
and Taiwan identity would have to reach over 75 percent of
the population. Both those conditions would not be met
during his first term in office, so in the interim Hsieh

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would seek legal interpretations of claims implicit in the
constitution that cannot be enforced in practice, for example
the inclusion of Chinese provinces such as Sichuan as part of
ROC territory.

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


10. (C) Hsieh, upbeat and confident throughout the meeting,
is walking a fine line in balancing his relationship with
President Chen. Hsieh clearly sees and presents himself as
his own man, having taken public positions that at times
place him at odds with the president. Y.Y. Lee's telling
comment on their past history suggests the two will continue
their political tango up until election day, and probably
beyond.

Appendix: Oral Message from Secretary Rice to Hsieh
-------------- --------------


11. (C) Continued stability in the Taiwan Strait serves the
interests of the United States, the PRC, and Taiwan. The
U.S. has the highest regard for Taiwan's democracy, and
believes that our approach to cross-Strait issues and to
Taiwan's security has allowed your democracy to flourish.
That said, we deeply regret the DPP's decision to pursue a
referendum on UN membership under the name Taiwan, which we
believe unnecessarily threatens stability in the Strait and
thus your security. This referendum should not take place.


12. (C) Your own stance vis-a-vis the DPP referendum before
the election will be critical to ensuring more productive
cross-Strait relations after the election. Should President
Chen make inflammatory claims about the significance of the
DPP referendum, and should he continue to characterize it as
a vote on sovereignty versus unification, we would urge you
to distance yourself from his remarks. We urge you to avoid
provocative or independence-oriented steps in the course of
the presidential and legislative campaigns and to use your
influence to urge the same caution on President Chen and his
administration. We also urge you to consider carefully the
effect that your possible inaugural speech will have on both
cross-Strait stability and the atmosphere of trust that has
long characterized Taiwan's relationship with the U.S.


13. (C) The U.S. has the highest regard for Taiwan's
democracy. It is therefore very important that the upcoming
elections be a model of democracy in every way, throughout
the electoral season and in the period before the
inauguration, regardless of electoral outcomes. We will
continue to oppose PRC threats and to urge Beijing to engage
in direct dialogue with Taiwan's elected leadership. We will
also work to protect Taiwan's international space.


14. (SBU) Chairman Burghardt did not have the opportunity
to review this cable.
YOUNG