SHANGHAI SCHOLARS ON CROSS-STRAIT RELATIONS

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000212

SIPDIS

NSC FOR WILDER, TONG

E.O. 12958: DECL: 6/12/2033
TAGS: PREL PGOV CH TW
SUBJECT: SHANGHAI SCHOLARS ON CROSS-STRAIT RELATIONS

REF: BEIJING 2275; SHANGHAI 194; SHANGHAI 195; SHANGHAI 209

CLASSIFIED BY: Kenneth Jarrett, Consul General, U.S. Consulate
General Shanghai, Department of State.
REASON: 1.4 (b),(d)

1. (C) Summary. During a June 10 lunch for visiting former EAP
DAS Randy Schriver, participating Shanghai academics were
cautiously optimistic on near-term cross-Strait rapprochement.
Despite general agreement that economic cooperation between
China and Taiwan was achievable, there was little consensus on
next steps or on prospects for political progress. Fudan
University's Shen Dingli presented some bold schemes for
cross-Strait rapprochement, including greater international
space for Taiwan and a slowdown in China's missile buildup. The
academics viewed Wang Yi's appointment to the Taiwan Affairs
Office as a positive sign. END SUMMARY.


2. (U) On June 10, the Consul General hosted a lunch for
visiting former EAP DAS Randall Shriver and several prominent
Shanghai academics. Our guests included: Shanghai Institute
for American Studies (SIAS) Professor Ding Xinghao; Tongji
University Professor Frank Peng; Director of Fudan University's
Center for American Studies Shen Dingli; SIAS Vice President Ni
Jianping.

U.S. PRESIDENTIAL ELECTION
--------------


3. (C) Not surprisingly, our Shanghai guests demonstrated a keen
interest in the U.S. presidential campaign, particularly Senator
Barack Obama's success in securing sufficient delegate support
to become the presumptive Democratic Party nominee. Inquiring
about Obama's prospects in the fall, Ding recalled an article
that appeared after the Persian Gulf War, assessing Colin
Powell's political future and questioning then whether the
United States was ready for an African-American President. Peng
characterized Obama's nomination as a significant event, and
asserted that his election would "turn a new page" for world
history, including for China.


4. (C) The academics expressed mixed views regarding whom China
would prefer to see win the presidency. Shen. echoed by Ding,
asserted that Beijing has no clear preference, although Senator
John McCain's life story conveys an image of moral strength that
commands respect in China. He also argued that Beijing
generally favors Republican administrations. This, however,
could change in the future. As China's economic growth
continues, the Beijing leadership will become more capable of
handling such bilateral irritants as intellectual property
rights (IPR) and human rights. China's military expenditures,
meanwhile, are likely only to increase. Thus, a decade or more
from now, China may be more comfortable with Democratic
administrations and feel antagonistic towards views and
policies, particularly on national security issues, more often
espoused by Republican administrations.

TAIWAN PRESIDENTIAL ELECTION
--------------


5. (C) Referring again to Obama's nomination, Peng suggested the
March 22 election of Kuomintang (KMT) President Ma Ying-jeou was
a similarly historic event, in this the island's second transfer
of power to the opposition party. It was no surprise to China,
Peng argued, that Chen Shui-bian prevailed in Taiwan's election
in 2000, given KMT unpopularity and waxing pro-independence
sentiment. That Ma, despite his KMT affiliation, defeated his
Democratic Progressive Party (DPP) opponent Frank Hsieh in an
open and fair election and by a substantial margin is a
remarkable result that Beijing must take note of. Shen followed
this observation by noting that India, widely viewed within
China as a less advanced developing nation, is also nevertheless
capable of orchestrating successful democratic elections on a
nationwide basis involving hundreds of millions of voters, even
if the average education level is lower than in China. Both
examples may someday present a challenge to Beijing.

CROSS-STRAIT ISSUES
--------------


6. (C) Asked whether China would seize the opportunity offered
by the inauguration of the new Taiwan leadership to achieve real
cross-Strait progress, the Shanghai academics were guardedly
optimistic. Ding acknowledged the improved atmospherics in the
cross-Strait relationship, and that agreements on direct flights
and increased PRC tourism to Taiwan would be achievable this

SHANGHAI 00000212 002 OF 003


summer. More generally, however, moving forward at a gradual
pace would be critical. Peng similarly characterized direct
flights as a positive development, and noted that although
cross-Strait flights would fly through Hong Kong airspace, at
least "the [flight path] curves are getting smaller." Still,
progress beyond economic cooperation would be a tall order.
Peng contended that as Taiwan and China interact more closely,
questions of protocol and nomenclature -- for instance, whether
Ma would be addressed as "Mr. Ma" or "Mr. President" during a
hypothetical visit to the Mainland -- would be difficult to
finesse and might complicate further progress. Peng pointed out
that Taipei turned down Beijing's invitation to host a segment
of the Olympic torch run, likely recognizing that scenario's
potential for raising such thorny issues.


7. (C) Shen, meanwhile, advocated that both sides move toward a
"notional one China," a supranational grouping in which the
Mainland and Taiwan would each be considered a "local
government." Under this arrangement, a two-year, largely
figurehead presidency could alternate between Beijing and
Taipei, while two vice presidents would retain actual control of
their own "localities," respectively "Zhonghua Dalu" for the
Mainland and "Zhonghua Taipei" for Taiwan. Establishing a joint
bicameral legislative body, with representation in one of the
two houses of delegates based on population (say, one delegate
per one million residents) and representation in the second
house of delegates having an equal number of Taiwan and Mainland
representatives, might ensure the exchange of views without
allowing one side to dominate the other. Ni expressed
skepticism that such a plan was achievable, and asserted that
improved cross-Strait relations would require a generational
change in thinking. Shen admitted this might be the case, but
insisted he would continue to push his idea "every four years"
(i.e., coinciding with the Taiwan presidential election cycle).
Unification is not a realistic goal, Shen noted, and as things
presently stand, "one country, two systems" is the most China
can reasonably expect from Taiwan. Shen expressed
disappointment that Beijing had not sent a congratulatory
message to Taipei on the successful conduct of elections nor
sent a delegation to attend Ma Ying-jeou's inauguration. The
electoral transition of governments in Taipei should be
considered as a great success and honor for the Chinese people,
Shen said, and Beijing's choice to not honor that event was a
missed opportunity to build goodwill across the Strait.

FACE, SPACE, AND ARMS
--------------


8. (C) Looking ahead to longer-term PRC-Taiwan relations, Shen
argued that Beijing must ultimately lend Ma credibility to
ensure continued cross-Strait stability. During the Chen
Shui-bian administration, China took a confrontational approach
to relations with Taiwan, while the United States became more
forceful in denying Taiwan's sovereignty. This resulted in a
loss of face for the island. Beijing should want to see
continued KMT administrations after Ma leaves office, and thus
bears primary responsibility for giving Taiwan face now. One
way to do so would be to grant the island international space --
perhaps a one time, "special exception" on WHO membership, on
the condition Taipei not seek to exploit the gain
diplomatically. Success over two-three years in a one-time
special exception arrangement could then be repeated in other
international organizations - even at the United Nations, though
the Mainland would always retain China's seat on the UN Security
Council. China could also consider greater transparency in
defense-related acquisitions, confidence building measures
(CBMs),and decreasing the rate of increase in its military
expenditures. (Shen said that China still must plan for
contingencies with Japan and Russia so an actual decrease in
overall military expenditures is not feasible.) But all
progress on international space issues would be contingent on
the Ma Administration explicitly affirming that there is only
one China.


9. (C) Peng expressed concern that cross-Strait momentum would
be disrupted by the possible resumption of U.S. arms sales to
Taiwan. Shen did not believe arms sales were imminent, but
admitted a new administration or change in the perceived threat
level could always result in a policy reversal. Turning to his
own government's posture, Shen suggested a reduction in the
number of missiles facing Taiwan.

SHANGHAI 00000212 003 OF 003




10. (C) Ding commented that the appointment of Vice Foreign
Minister Wang Yi as head of the State Council's Taiwan Affairs
Office was an important and hopeful development. While TAO
officials have been willing to consider a truce in the struggle
between Beijing and Taipei for diplomatic recognition, the
Foreign Ministry has been less willing to consider or accept
that possibility. Wang, coming from the Foreign Ministry, is
familiar with the views and workings of the Ministry and may be
able to work some progress on that front. China does face the
sensitive issue of how to handle requests for establishment of
diplomatic relations from those countries who now have
diplomatic relations with Taipei but wish to switch to Beijing;
Ding said Panama and Nicaragua are cases in point. A diplomatic
truce may be a key step in moving forward in cross-Strait
relations but what can or should China say to such suitors for
diplomatic relations?

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


11. (C) While the Shanghai academics generally agreed that
economic cooperation between China and Taiwan is possible in the
short term, there was little consensus on next steps or on
prospects for political progress. Shen Dingli's bolder ideas on
cross-Strait progress, though regarded with some skepticism by
his colleagues, reflect the range of creative thinking and
flexibility among some Shanghai scholars on Taiwan.
JARRETT