TAICHUNG: KEY BATTLEGROUND IN LEGISLATIVE AND

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000950

SIPDIS

SIPDIS

E.O. 12958: DECL: 4/23/2032
TAGS: PGOV TW
SUBJECT: TAICHUNG: KEY BATTLEGROUND IN LEGISLATIVE AND
PRESIDENTIAL ELECTIONS


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


1. (C) Summary: Central Taiwan, where KMT-dominated north
meets DPP-controlled south, will be a key battleground
between the DPP and KMT in their fight to win a legislative
majority and the presidency in 2007-2008 elections. More
than ten percent of Taiwan's voters reside in Taichung City
and County, which is undergoing an economic boom. With the
highly popular Jason Hu as mayor, the KMT enjoys a solid
majority in Taichung City. Although also generally enjoying
a slim majority in Taichung County, the KMT-led pan-Blue lost
this county to the DPP in the 2004 presidential election.
Pro-Blue Taichung observers predict the pan-Blue, if it
remains unified, could win 7 of the 8 legislative races in
the city and county, with the 8th going to a pro-Blue
independent. While local DPP party leaders are hoping to
win a majority of seats based on a possible KMT-PFP split,
more realistically, the DPP has a chance to win 2-3 of the 8
seats. End Summary.


2. (C) Comment: The KMT has the clear advantage overall at
this early stage in Taichung City and County legislative
races. Nonetheless, the KMT must deal with intense
intra-party competition and coordinate effectively with the
PFP to avoid splits that could cost the pan-Blue some LY
seats. How well the KMT handles these intra-party and
Pan-Blue issues over the coming months will be a significant
factor in determining the results of the legislative
elections in this important region of Taiwan. End Comment.


3. (SBU) This cable is one of a series of reports on the
political scene in important cities and counties in early
stages of the run-up to the 2007-2008 legislative and
presidential elections. To gather information for this
report, AIT met with party officials and academics in
Taichung City on January 24 and April 11 and Taichung County
on April 11.

Despite Politics, Stability and Growth Ahead?
--------------


4. (C) DPP Taichung County Chairman Chang Wen-huai told AIT
that despite the confrontational political atmosphere in
Taipei, the Taichung economy is performing handsomely and
would only benefit from a proposed merger of the city and
county. If this merger were realized, it would bring ports
and airports under unified control in a new metropolitan area
comprising 2.6 million people. Chang explained that the
Taichung Industrial Science Park and surrounding real estate
development already reflect a prosperous economy, while the
local Ching-Chuan-Kang ("CCK") airport is positioned to
accept future cross-Strait charter flights, which will
further increase Taichung's competitiveness. Once the new
High Speed Rail and planned MRT systems become a part of
everyday life in Taichung, the region will begin to catch up
with Taipei. Chang predicted that the new Legislative Yuan
(LY) system (with single-representative districts and the
total number of legislators reduced from 225 to 113) will
increase political stability, no matter who wins the
presidency. The new system will provide an opportunity to
allocate the national budget more in accordance with the
local LY districts, Chang suggested, and lawmakers might be
more inclined to cooperate with the new Cabinet in order to
secure central government funding for their districts.

Key Blue-Green Battleground
--------------


5. (C) With over 10 percent of Taiwan's population and a
total of 8 Legislative Yuan (LY) seats out of the 73 district
seats up for grabs later this year, Taichung City and County
will be a pivotal battleground in the upcoming 2007-2008
legislative and presidential elections. While the Kuomintang
(KMT) has traditionally enjoyed greater support in Taichung,
winning a small majority of legislative seats (10 out of the
then 19 seats) in 2004 and both the mayoral and county
magistrate races in 2005, the pan-Blue presidential ticket
lost to President Chen in 2004 by a narrow margin in Taichung
County.

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6. (C) KMT Taichung City Office Director Hung Jung-chang told
AIT that support for the pan-Blue in the city and county is
between 55 to 60 percent compared with 40 to 45 percent for
the pan-Green. However, several districts that voted Blue in
the 2004 legislative elections had voted Green just a few
months earlier in the 2004 presidential election. Tunghai
University Political Science Professor Huang Hsin-da
explained to AIT that the KMT has difficulty translating the
local organizational advantage that wins legislative
elections into victory in national elections. If the
pan-Blue is unified, Huang predicted, they could win all 8 of
the legislative races with one of the seats going to a
pro-Blue independent. Local Democratic Progressive Party
(DPP) party leaders, however, told AIT they hope for a
KMT-People First Party (PFP) split in 3 districts, giving the
DPP a chance to win a slim majority of the Taichung seats.

The View from Taichung City
--------------


7. (C) With over 1 million inhabitants, Taichung is Taiwan's
third most populous city and is divided into three
legislative districts in the new system. Professor Huang
told AIT that he expected urban candidates to run campaigns
based on personal image and party affiliation because the
local factions are weakening and no longer play as strong a
role as they do in rural areas. With a popular KMT mayor,
the Blues enjoy a resource advantage over the Greens in what
has generally been a Blue-leaning area. The KMT and PFP,
however, are both considering entering candidates in two of
the three districts and it remains to be seen whether the
parties can successfully coordinate to agree on single
pan-Blue candidates once the KMT primaries conclude in June.
While Huang suggested that the DPP could take advantage of a
potential KMT-PFP split, the DPP itself faces the problem of
coordinating with the Taiwan Solidarity Union (TSU) in the
strongest Green district. Details on the contests in the
three Taichung City legislative districts follow:

-- District 1 is a Blue-leaning district where Tsai
Chin-lung, deputy secretary-general of the KMT legislative
caucus, is likely to win his party primary and square off
against the DPP's Michael Tsai (Ming-hsien),former
Legislator and former Vice Minister of Defense. Tunghai
University Professor Wang Yeh-li said that in the upcoming
battle of the "two Tsais" the KMT incumbent enjoys the
advantage of combining a national reputation with stronger
grassroots support. Michael Tsai, moreover, faces potential
challenges from DPP legislator Lee Ming-hsien, who might run
as an independent, and from former Taichung Mayor Chang
Wen-ying, who might run under the TSU banner.

-- District 2 is a strong Blue district and one of three
districts island-wide for which the KMT and PFP have agreed
to hold public opinion polls to produce a single pan-Blue
candidate. KMT-PFP coordination, however, could be
undermined by longstanding antagonism between the pan-Blue
local political establishments. PFP candidate Shen Chih-hui,
an incumbent legislator, alienated local KMT leaders in 2005
by running against the highly popular (KMT) Taichung Mayor
Jason Hu during his reelection bid. Professor Huang told AIT
that local KMT party leaders rejected Shen's application to
return to the KMT earlier this year, and that her attempt to
jump ship also alienated her own PFP supporters. The KMT
candidate is incumbent Legislator Lu Hsiu-yen. Professor
Huang, who has campaigned for Lu in the past, explained that
even if Shen does not run, Lu will still face a tough
challenge from Hsieh Ming-yuan, DPP co-founder and an
incumbent Legislator, who has a stronger grassroots support
base than Lu in this district.

-- District 3 is the only Taichung city district where the
Blues and Greens are evenly matched and could see a three- or
even four-way race. None of the five KMT hopefuls is a
current Legislator. PFP Legislator Daniel Hwang (I-chao)
told AIT in mid April that he thought he has a good chance of
winning reelection. Recent media reports indicate that the
KMT may end up ceding this district to Hwang as part of an

TAIPEI 00000950 003 OF 003


overall deal with the PFP on legislative races. Professor
Wang told AIT that the DPP's Wang Shih-hsun and the TSU's Ho
Min-hao, both incumbent legislators, belong to the same local
Ho family faction, so the chances of agreement on fielding a
joint pan-Green candidate in this district are good.

The View from Taichung County
--------------


8. (C) Taichung County, with 1.5 million inhabitants, is the
fourth-largest administrative district in Taiwan and will
have 5 LY seats. The DPP's President Chen narrowly won all
five districts in 2004. Subsequently, Districts 1-4 voted
Blue in the 2004 LY election. DPP Taichung County Executive
Director Chang Wen-huai told AIT that no candidates have
registered for the primary in Districts 2 and 4, which are
particularly difficult for the DPP. Details on the five
districts:

-- District 1 is a contest between strong KMT and DPP
incumbents. Taichung City DPP Chairman Chang says he is
confident Legislator Tsai Chi-chang will be reelected.
However, Tsai faces Legislator Liu Chuan-chung of the KMT,
who outpolled him by 50% and was the top vote winner in his
district under the old system.

-- District 2 is the home base of Nonpartisan Solidarity
Union (NSU) Legislator Yen Ching-piao, a pro-Blue independent
with an underworld background who is very influential in
Taichung politics. No DPP candidate is registered here. KMT
Legislator Chi Kuo-ting registered, but contacts told AIT he
will step aside and run for Vice County Magistrate as the KMT
cedes this district to Yen.

-- District 3 is Blue-leaning, and the KMT recently announced
it would use polls to determine a single Pan-Blue candidate.
Local party leaders told AIT that the Blues should win if
they agree on a single candidate. At this point, incumbent
LY member Fung Ting-kuo (PFP) appears to be leading Chiang
Lien-fu (KMT). On the DPP side Legislator Hsieh Hsin-ni, the
county second place vote winner in the 2004 LY, faces a
primary challenge by former Legislator Chin Chao-tung.

-- District 4 is a KMT majority district, and there is no DPP
candidate registered for the primary. The powerful
Legislator and KMT Central Standing Commission Member Hsu
Chung-hsiung faces County Councilor Chen Ching-lung in the
KMT primary. Hsu is one of only two KMT district legislators
endorsed by a consortium of 27 civics groups that have
pledged to be a nonpartisan voice of moderation in the
upcoming LY elections.

-- District 5 is the only Taichung County district that voted
Green, narrowly, in the 2004 LY race. Tunghai University
Political Science Professor Wang Yeh-li said this district is
too close to call. DPP Legislator Kuo Chun-ming left
District 4 to compete in this district against Legislator Wu
Fu-kuei and a local county councilor. The winner will square
off against KMT Legislator Yang Huan-ying, who has avoided a
primary after the KMT pressured a county councilor to
withdraw from the race.
YOUNG