MAC CHAIRMAN SAYS "FOUR WANTS" HAVE NOT HURT

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000609

SIPDIS

SIPDIS

STATE PASS USTR
STATE FOR EAP/TC
COMMERCE FOR 3132/USFCS/OIO/EAP/WZARIT
TREASURY FOR OASIA/LMOGHTADER
USTR FOR STRATFORD, ALTBACH

E.O. 12958: DECL: 03/15/2017
TAGS: PREL PGOV ECON EINV CH TW
SUBJECT: MAC CHAIRMAN SAYS "FOUR WANTS" HAVE NOT HURT
CROSS-STRAIT EFFORTS

REF: A. TAIPEI 581


B. TAIPEI 565

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


1. (C) Summary: Mainland Affairs Council (MAC) Chairman
Joseph Wu told Director Young that President Chen Shui-
bian's "four wants" speech had not set back MAC's work on
cross-Strait relations. He described the private meeting
between the PRC Taiwan Affairs Office Economics Director
and his MAC counterpart in Taiwan earlier in the month as
friendly. However, he also reported that there had been
no progress in cross-Strait discussions on tourism. Wu
said MAC is assisting Legislative Yuan (LY) Speaker Wang
Jin-pyng arrange a visit to China that could take place
in April. End summary.


2. (C) AIT Director Young met with MAC Chairman Joseph Wu
on March 15 to discuss cross-Strait relations after
President Chen's "four wants" speech to the Formosa
Association for Public Affairs on March 4. Wu was
accompanied by MAC Chief Secretary Jan Jyr-horng and
Department of Information and Liaison Section Chief Cheng
Wei-ching.


3. (C) Wu told Director Young that President Chen's "four
wants" speech had so far had "no effect" on MAC's work.
He noted that Straits Exchange Foundation Travel
Department Chief Sun Chi-ming was already in China on his
groundbreaking trip (ref B) when the speech was made. Wu
said the trip would have been interrupted if Chen's
speech had caused real damage to the cross-Strait
relationship. In addition, He Shizong, the Economics
Director of the PRC's Taiwan Affairs Office, was in
Taiwan during the speech. Mr. He's visit also continued
undisrupted, Wu said. Wu revealed that Mr. He met twice
with his MAC counterpart, Economics Director Fu Don-cheng.
They met the second day of Mr. He's visit for a private
breakfast meeting, and both attended a dinner March 9,
the night before he departed Taiwan. This was Mr. He's
second visit to Taiwan. He met with Fu on his last visit
six years ago as well, Wu said.


4. (C) MAC Chief Secretary Jan told AIT separately that
Chairman Wu had suggested that Jan attend the dinner
event as well, but Mr. He had rejected the proposal
because Jan was too senior. Jan reported that Mr. He and
Fu discussed strengthening legal protections for Taiwan
investors in the Mainland; increasing contact between SEF
and its PRC counterpart, the Association for Relations
across the Taiwan Strait (ARATS); and raising the level
of official visits between Taiwan and the PRC.


5. (C) Wu told Director Young that TAO had insisted that
the meetings be kept very quiet, but emphasized that the
atmosphere was friendly. He explained that MAC had made
approval for Mr. He's visit conditional on his meeting
with Fu. Wu explained that Taiwan's strategy for now is
to get PRC officials accustomed to visiting their
counterparts when they come to Taiwan and eventually
increase the level of contact and openness of the
meetings. According to Wu, these kinds of visits began
approximately a year ago when an official from TAO's Legal
Affairs Office came to Taiwan and agreed to meet
privately with his MAC counterpart. According to Wu, the
two took a tour together in Yangmingshan, a national park
just outside Taipei. He confirmed Director Young's
speculation that personal relationships were an important
factor in these meetings.


6. (C) Director Young asked Wu if he had any indication
when Beijing might appoint a replacement for Wang Daohan,
the head of ARATS who died two years ago, and if this
suggested ARATS remained irrelevant organization. Wu
said that he had not heard anything about Wang's
replacement. He did know, however, that ARATS was being
down-sized as some officials who held positions in both
ARATS and TAO were being shifted exclusively to TAO.


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7. (C) Director Young also asked Wu's views on the
capacity of local officials in China to make their own
decisions on matters related to cross-Strait relations.
Wu responded that the central leaders in Beijing make the
general policy guidelines, which generally encourage
economic integration. China, Wu said, wants to "suck
Taiwan in and prevent it from drifting away." Local
officials, on the other hand, are focused on attracting
Taiwan investment and are willing to use personal
connections and incentives to make it happen, he
continued. Summarizing, he said the central government
sets the guidelines, but within those local officials "go
their own way."


8. (C) Turning to the ongoing cross-Strait tourism
discussions under the "Macao Model," Wu told the Director
that the two sides had met in Macau earlier in the week,
although they made no progress toward an agreement.
Beijing, he explained, had requested this meeting
indicating that they had a new proposal in reply to
Taiwan's earlier proposal. The new PRC proposal, however,
turned out to be much the same as previous proposals with
only minimal changes. Wu termed the proposal
"unacceptable" because it still referred to travel to
Taiwan as domestic travel.


9. (C) Chief Secretary Jan separately speculated that the
PRC had requested the meeting only to give the appearance
it was actively pursuing new discussion initiatives,
while its actual intention was to slow the process. He
described a similar attitude on the part of Beijing
toward cross-Strait charter flight discussions.
According to Jan, Taiwan had proposed before the Lunar
New Year holiday that cross-Strait charter flights from
Taiwan to Shanghai pass through Japan airspace in
addition to the current approved route through Hong Kong
and Macao airspace. At that time, Beijing had indicated
that it would agree if Japan first approved the proposal.
After the holiday, however, when Taiwan negotiators
confirmed to their PRC counterparts that Japan had
approved the proposal, the PRC side then stated that it
would need to discuss it further with military officials.


10. (C) During a private pull-aside at the end of the
meeting, Director Young queried Chairman Wu concerning LY
Speaker Wang Jin-pyng's plan to visit China (ref A). Wu
confirmed that Wang was in touch with President Chen, who
had directed MAC to assist. The Chen administration is
interested in working with Wang in the hopes that, unlike
the totally uncoordinated visits to China by pan-Blue
heavyweights Lien Chan and James Soong, Wang's travel
might assist the government in its overall cross-strait
policy. At the same time, Wu added, they realize that
Wang is a very political animal who is trying to enhance
his domestic standing as a possible springboard toward
the presidency. Thus they will remain cautious but engaged,
as Wang seeks to arrange a trip this spring before the
KMT primary process concludes. Wu confirmed that Wang
has his own contacts to senior leadership in Beijing,
possibly through Hong Kong, though he professed not to
know who they were.


11. (C) As to what Wang might accomplish, he had
initially been interested in scoring a breakthrough on
PRC tourism, but MAC had discouraged this line of thought,
arguing that existing channels in Macao were already
working the issue well. At present Wang is considering
seeking liberalization of PRC regulations for Taiwan
businessmen on financial supervision, currency exchange
and protection for Taiwan investors, and has been given
government blessing here to proceed.


12. (C) According to Wu, earlier efforts by Wang to
arrange a visit to the mainland had run up against PRC
insistence that he embrace the one China principle and
the 1992 consensus, but Wang -- no doubt grasping that
this would put him into the same camp as his KMT rival Ma
Ying-jeou -- had balked at any such preconditions. In
short, Wu was currently not certain how this would all

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play out, but gave us the real sense that President Chen
sees benefit in providing unofficial sanction to Wang's
effort to arrange a substantive trip across the strait.
YOUNG