CONTACTS SAY WANG YI APPOINTMENT SIGNALS

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 002218

SIPDIS

E.O. 12958: DECL: 06/06/2033
TAGS: PREL PGOV CH TW
SUBJECT: CONTACTS SAY WANG YI APPOINTMENT SIGNALS
DETERMINATION TO IMPROVE CROSS-STRAIT RELATIONS

Classified By: Political Minister Counselor Aubrey Carlson. Reasons 1.
4 (b) and (d).

Summary
--------------


1. (C) Embassy contacts say veteran diplomat Wang Yi's
appointment as Director of the State Council Taiwan Affairs
Office (TAO) signals an effort to improve cross-Strait
relations. Appointing a diplomat to handle Taiwan also sends
a strong signal regarding Beijing's recognition of the need
to address Taiwan's desire for increased international space.
Contacts praised Wang as bright, capable and creative. They
say that newly minted State Councilor Dai Bingguo is
responsible for Wang's appointment and is playing a greater
role on Taiwan policy. One contact noted that Central Policy
Research Office Director Wang Huning participated in all the
meetings with visiting KMT Chair Wu Poh-hsiung and may be
playing a significant role. Hu Jintao is personally
directing Taiwan policy, and fellow Politburo Standing
Committee member Jia Qinglin, in charge of the Taiwan
portfolio, also has input. Wang Yi may face challenges in
adapting to the new institution, and it may be difficult to
run the TAO with Chen Yunlin, TAO's director for the past
decade, heading up the Association for Relations Across the
Taiwan Strait (ARATS). End Summary.

Wang Yi New TAO Chief, Chen Yunlin to Head ARATS
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2. (C) Executive Vice Foreign Minister (EVFM) Wang Yi was
formally announced as the new Director of the TAO as he
opened the plenary session of the 2nd ARATS Board of
Directors meeting June 3 in the Great Hall of the People.
(Note: The first Board of Directors meeting was held in 1991
when ARATS was founded and former Shanghai Mayor Wang Daohan
was appointed Chair.) From 2004 until he began his recent
two-month stint as EVFM, Wang was China's Ambassador to
Japan, a period which saw a significant thaw in relations.
As expected, ARATS elected Chen Yunlin (TAO Director since
1997) as the new Chair to replace Wang Daohan, who passed
away in December 2005. TAO Executive Deputy Director Zheng
Lizhong, who was rumored to be in line for the TAO job, was
named Executive Deputy Chair of ARATS. Zheng and fellow TAO
deputy Sun Yafu, who was also named as an ARATS Deputy Chair,
will keep their positions at TAO. Politburo Standing
Committee Member and CPPCC Chair Jia Qinglin and State
Councilor Dai Bingguo spoke at the ARATS board meeting on
June 3.

Appointment Signals External Aspect of Taiwan Policy
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3. (C) Zhou Zhihuai (protect),Vice President of the
Institute of Taiwan Studies at the Chinese Academy of Social
Sciences (CASS),told PolOff on June 3 that Wang's
appointment signals an increased willingness to accommodate
Taiwan's desire for international space. Everyone expects
that the weekend charter flights and Mainland tourism issue
will be resolved quickly, Zhou said, but the next major issue
will be Taiwan's international space, which Wang Yi will be
able to manage well. Zhou asserted that Wang's appointment
signals an end to differing approaches between the TAO and
MFA, in which in the past has meant that the TAO tried to win
hearts and minds on Taiwan while the MFA played a more
adversarial role as it sought to limit Taiwan's international
space. As an example, Zhou claimed, even before Chen
Shui-bian left office, the PRC rebuffed a request from "a
certain country" to shift diplomatic relations from Taipei to
Beijing.


4. (C) Gu Guoliang, Deputy Directr of CASS's Institute of
American Studies, tod PolMinCouns on June 5 that Executive
Vice Freign Minister Wang Yi's posting to the TAO is a
significant development. The assignment suggests a
determined attempt to improve cross-Strait relations and look
seriously at such issues as Taiwan's international space. On
increased "international space" for Taiwan, Gu confirmed PRC
officials are considering how this might be accomplished. He
stressed, however, that this is a tricky issue for Beijing.
No move in this direction can bring into question the
"sovereignty issue" or suggest there are "two Chinas."
Another concern is of giving away "space" now that China
might regret if the pro-independence Democratic Progressive
Party comes back into power in a future election.


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5. (C) In a conversation with PolOff on June 5, Zhu Feng
(protect),Deputy Director of Peking University's Center for
Strategic and International Studies, commented that because
of Wang's stellar reputation at the MFA, he is ideally suited
to implement a more liberal policy toward Taiwan's
international participation. Zhu argued that the assignment
also signals that Hu Jintao increasingly views Taiwan as an
"international" issue, although this can never be admitted
publicly.


6. (C) Jia Qingguo (protect),Vice Dean of Peking
University's School of International Studies, told PolOff on
June 5 that Wang's appointment represents a "correction" in
PRC policy toward Taiwan. Jia quoted former Premier Zhou
Enlai's statement that while Taiwan is an "internal affair"
of China, it also has "external" elements. Jia said that
previous TAO directors all came from a provincial or Party
background, but this is the first time someone with extensive
foreign policy experience is running the office. Jia
acknowledged that the MFA and TAO played differing roles
vis-a-vis Taiwan in the past, but attributed this to
differing institutional missions. Even though some in Taiwan
may have misgivings about the MFA, Jia argued, they would be
familiar with Wang's positive reputation and would find him
easy to work with. Jia also said that in his new position,
Wang will focus on his new role and not worry about the MFA's
institutional interests.

Praise for Wang Yi
--------------


7. (C) All of our interlocutors had high praise for Wang Yi.
Renmin University Professor Shi Yinhong (protect) commented
that Wang is bright, capable, experienced, insightful and
flexible and will be able to handle the complexities of
dealing with Taiwan. He noted that Wang has good ties to the
Chinese leaders. Gu Guoliang similarly said Wang Yi is a
capable official with good ties to senior leaders. (Note:
Shi and Gu declined to specify which senior leaders.) Zhu
Feng praised Wang's experience in dealing with difficult
issues with China's neighbors and noted that he is the
son-in-law of Zhang Jiadong, Zhou Enlai's personal secretary.
Jia Qingguo called Wang thoughtful, diligent and creative.
In this respect, Jia said Wang compares favorably with Chen
Yunlin, who he called a "by the book" official. This
creativity would be much needed when and if the two sides
deal with the fundamental disputes over sovereignty and
Taiwan's status, Jia said.

New Players on Taiwan Policy
--------------


8. (C) Zhou Zhihuai, who attended the June 3 ARATS meeting,
said that State Councilor and former EVFM Dai Bingguo
nominated Wang for the TAO job. On the afternoon of June 2,
Dai escorted Wang to the TAO to introduce him to the staff.
Zhou said that Dai developed good ties with Hu Jintao while
serving as head of the Party's Foreign Affairs Office and
that this is why Hu accepted Dai's suggestion. Shi Yinhong
made a similar point, saying that Dai's participation in the
Hu Jintao-Wu Poh-hsiung talks, his speech at the ARATS
meeting, and his ties to Wang Yi signal more involvement by
Dai in Taiwan affairs. Zhu Feng explained that Dai is
responsible for both the TAO and the MFA's work from his
State Councilor position and said that former State Councilor
Tang Jiaxuan and Dai both have close ties to Wang Yi. Jia
Qingguo said that in addition to Hu Jintao, key policymakers
on Taiwan issues will be Jia Qinglin, Dai Bingguo and Wang Yi.


9. (C) According to Gu, however, the person to watch on
Mainland Taiwan policy is Central Policy Research Office
(Zhongyang Zhengce Yanjiushi) Director Wang Huning (also a
member of the Central Committee Secretariat and of the
Central Group for Constitutional Amendments). Wang sat in on
all of Wu Poh-hsiung's meetings with PRC officials and is a
close advisor to President Hu Jintao.


10. (C) All of the interlocutors noted Hu's paramount role in
Taiwan-related policymaking. "Make no mistake about it," Gu
stressed, "Hu Jintao is in charge of Mainland Taiwan policy."
Shi Yinhong said it does not matter who holds the TAO post,
because Hu Jintao manages the Taiwan issue directly.

Chen Yunlin's Role as Head of ARATS
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11. (C) Contacts offered significantly divergent views on
Chen Yunlin's role at ARATS and how Wang Yi and Chen would
interact. (Note: ARATS and TAO share an office building, as
well as personnel.) Shi said that coming in as an outsider
to the TAO may pose institutional challenges for Wang,
especially with Chen Yunlin staying on as ARATS chair. Zhu
Feng said that Chen, with a position in the CPPCC and now
ARATS, is essentially retired and Wang Yi would bring in his
own people and quickly put his own stamp on TAO. Jia Qingguo
said that even though Chen is technically under Wang, Wang
would have to defer to him because of his experience and long
institutional ties to the TAO. Zhou Zhihuai said Chen Yunlin
will be actively involved with the policy process and have a
good feel for senior leaders' wishes in the cross-Strait
dialogue.
PICCUTA