SHANGHAI ACADEMIC YANG JIEMIAN ON TAIWAN, SED

C O N F I D E N T I A L SECTION 01 OF 02 SHANGHAI 000280

SIPDIS

STATE FOR EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 7/25/2033
TAGS: CH PGOV PREL TW
SUBJECT: SHANGHAI ACADEMIC YANG JIEMIAN ON TAIWAN, SED

REF: A) SHANGHAI 41; B) SHANGHAI 194

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




1. (C) Summary: During the Consul General's July 25 farewell
call, Shanghai Institute for International Studies (SIIS)
President Yang Jiemian noted improvements in cross-Strait
relations and expressed his hope that the Strategic Economic
Dialogue (SED) will continue even after the change in
administration. He relayed contents of his discussions with
policy advisors in Taiwan, explaining that greater international
space for Taiwan remains their chief diplomatic priority. End
Summary.


2. (U) The Consul General paid a farewell call on SIIS
President Yang Jiemian on July 25. Yang is the brother of
Chinese Foreign Minister Yang Jiechi and an influential academic
in his own right. SIIS Vice President Chen Dongxiao, SIIS
Senior Fellow Wu Chunsi, Consul General, Deputy Principal
Officer, Acting Political/Economic Section Chief and Poloff
(notetaker) also participated in the meeting.

Yang's Discussions with Ma's Advisors
--------------

3. (C) Yang provided a readout on his recent visit to Taiwan.
Yang met with high level advisors to President Ma Ying-jeou,
including officials at the Mainland Affairs Council, and members
of the DPP. Yang sees cross-Strait relations shifting in a
positive direction but noted four issues raised by his Taiwan
interlocutors. First, Taiwan seeks a greater role in
international space, particularly as an observer in the World
Health Organization (WHO). Ma is willing to use the
nomenclature "Chinese Taipei" rather than insisting on "Taiwan".
Second, the Taiwans see Paraguay's continued recognition of
Taiwan (i.e. no Mainland pressure on Paraguay to switch) as a
sign of the Mainland's goodwill in improving cross-Strait
relations. Third, Ma would like to send a more senior
representative to APEC. Although many outsiders believe that
former KMT Chairman Lien Chan would be a suitable candidate,
Yang observed that Ma is hesitant to appoint Lien since he and
Lien still have some political differences. Fourth, Taiwan
hopes to participate more fully in Southeast Asia's economic
integration, preferably via ASEAN, such as a 10 plus 3 plus 1
format (ASEAN plus China plus South Korea plus Japan plus
Taiwan) or even a 10 plus 3 plus 3 format (including Hong Kong
and Macau).


4. (C) According to Yang, Ma's advisors are still debating
whether or not to suspend Taiwan's application for United
Nations membership this year. There are three possible options:
a) suspend the application if cross-Strait relations continue to
improve; b) continue with the application but do it
"half-heartedly"; c) continue with the application "more
energetically" to show Ma cares more than the DPP about Taiwan's
international space. Yang stated that Ma's advisors have not
reached a conclusion on this yet.


5. (C) Yang believes DPP head Tsai Ying-Wen's star is rising
fast in Taiwan. He tried to meet with her during his trip to
Taiwan, but she insisted that the meeting take place in her
office. He wanted to meet in a more neutral environment and, in
the end, the two could not come to an agreement on a venue.
Yang insisted, however, that this episode did not affect his
high opinion of her. Yang did meet with other senior DPP
figures.


6. (C) The Consul General encouraged the Mainland to be as
"responsive as possible" to Taiwan's overtures regarding the
international space issue. The issue has received considerable
attention from the outside world, and a positive response from
the Mainland would lend force to a "virtuous cycle" in improving
cross-Strait relations.

The SED's Future
--------------

7. (C) Yang believes the SED has played an integral role in
furthering U.S.-China bilateral relations and expressed his hope
that the SED will continue even after the change in

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administration next year. SIIS has been tasked by the Ministry
of Finance (MOF) to act as a consultant on economic issues, and
the SED in particular. SIIS has already had discussions with
the MOF in advance of Treasury Secretary Paulson's planned visit
to Beijing during the Olympics and is working on the agenda for
the next round of SED talks in December.

SIIS's Goals
--------------

8. (C) Yang described SIIS's growing role as advisor to China's
Ministry of Foreign Affairs, MOF, and Taiwan Affairs Office.
Beijing is concerned about the state of the U.S. economy,
especially given the huge exposure of China's foreign reserves
to the U.S. market. SIIS will increase its focus on economic
issues, particularly the U.S. economy; Yang hopes that SIIS
academics will have more opportunities to exchange ideas with
economic experts visiting from the United States.


9. (C) SIIS will also expand its research in areas where there
are differences of opinions between the United States and China
including Burma, Africa, Zimbabwe, and Latin America. Yang
emphasized the importance of paying attention to non-traditional
issues in foreign policy such as energy, environment and public
policy. To that end, SIIS will expand its research in these
areas and has already hired an academic from China University of
Hong Kong to cover climate change issues.


10. (C) Yang hopes that U.S.-China relations will continue to
improve in the next administration. He said that after the
Olympics, Premier Wen Jiabao will likely attend the autumn
session of the UN General Assembly. It was unclear whether Wen
will also seek to conduct a formal bilateral visit at that time.
However, Yang believes that it is important to constantly
inject "momentum" in the U.S.-China relationship.
JARRETT