SHANGHAI ACADEMIC ZHANG NIANCHI CAUTIOUSLY OPTIMISTIC ON

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000043

SIPDIS

SIPDIS

STATE FOR EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 2/1/2033
TAGS: PGOV PREL CH TW
SUBJECT: SHANGHAI ACADEMIC ZHANG NIANCHI CAUTIOUSLY OPTIMISTIC ON
TAIWAN

REF: A) SHANGHAI 41; B) SHANGHAI 42; C) 2007 SHANGHAI 791

CLASSIFIED BY: Christopher Beede, Political/Economic Section
Chief, U.S. Consulate , Shanghai .
REASON: 1.4 (b),(d)




1. (C) Summary. In a January 23 meeting with EAP DAS Thomas
Christensen, Shanghai Institute for East Asian Studies (SIEAS)
President Zhang Nianchi was cautiously optimistic that there can
be progress on cross-Strait issues. He was pleased with the
Taiwan Legislative Yuan (LY) election results and said that this
has decreased the threat of independence. However, he was still
concerned that the UN membership referendum could pass and also
noted that President Chen Shui-bian will still have space and
opportunity to cause problems, even after he steps down. He
said it was unlikely that both sides can come to an agreement on
a peaceful framework as proposed by President Hu Jintao during
the 17th Party Congress. EAP DAS Christensen said that, given
the democratic constraints on Chen Shui-bian, the only way he
coiuld achieve any radical goals is if the mainland were to
overreact and provide the emergency environment in Taiwan
necessary for him to do so. Christensen urged that Beijing take
a more moderate approach toward Taiwan and seize the opportunity
of a new leadership there to improve cross-Strait relations.
Squeezing Taiwan's international space and taking other
provocative actions only help supporters of Taiwan independence.
End Summary.

Independence Threat Decreased
--------------


2. (C) EAP DAS Christensen met with SIEAS President and Taiwan
expert Zhang Nianchi on January 23. A former assistant to Wang
Daohan, Zhang is a leading expert on Taiwan issues in China and
continues to maintain a great deal of influence on Beijing's
Taiwan policy. SIEAS Deputy Director Hu Lingwei, Pol/Econ
Section Chief and Poloff also participated in the meeting.
Unlike many other academics in Shanghai (see reftel A and B),
Zhang holds a more moderate and optimistic approach to Taiwan.
He was pleased with the results of the January LY elections and
said the results have decreased the threat of Taiwan
independence. This was good for cross-Strait relations and
U.S.-China relations. He said that the United States and the
international community were very active in making known
opposition to the referendum. This has been very helpful and he
hoped that this trend will continue.

Referendum Can Still Pass
--------------


3. (C) However, the upcoming referendum on Taiwan membership in
the UN still poses a threat to regional stability. The LY
elections and the Presidential elections are very different.
The LY election's voter participation rate was rather low. A
higher turnout can be expected for the March Presidential
election, increasing the number of potential participants in the
referendum. In addition, while the DPP lost seats in the LY
election, opinion polls indicate that approximately 40 percent
of the electorate still supports the DPP. There is still a
possibility that the DPP can win the majority of votes in the
March Presidential elections.


4. (C) According to Zhang, Taiwan people have a very different
attitude and do not always pay sufficient attention to the true
opinions of other countries. Some Taiwan scholars believe that
the United States opposes the UN referendum because of the U.S.
relationship with the Mainland, but that in its "heart," the
United States actually supports Taiwan's independence efforts.
Many in Taiwan believe that many nations are sympathetic to
Taiwan's plans for a UN membership referendum, regardless of the
state of official relations between those nations and Beijing.
DAS Christensen countered that in addition to the unequivocal
U.S. statements of opposition to the UN membership referendum,
the European Union and Japan are among the other members of the
international community that have clearly expressed opposition
to the referendum. Zhang continued that no one could have
predicted that the KMT would have won two-thirds to
three-quarter of LY seats. Many observers might now think that
there is a possibility that Taiwan will return to a strong
one-party state and this could have a bad effect on domestic
politics. However, this decision should be left up to the
Taiwan voters. He asked whether the United States would now try
to interfere and create a balance between the KMT and DPP in

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Taiwan by tacitly supporting the DPP in the Presidential
election.


5. (C) DAS Christensen disagreed that people in Taiwan did not
pay attention to international opinion. In addition, most
Taiwan people do not believe that the United States secretly
supports Taiwan independence. The United States has made its
opposition to the UN membership referendum very clear and people
on Taiwan have certainly notices. For its part, the Mainland
should not exaggerate the importance of the referendum. If it
passes, Taiwan's status will still remain the same. More
importantly, if the Mainland is too aggressive, this would
provide President Chen with an excuse and a conducive
environment to take more radical actions to promote
independence. The LY results and President Chen's decision to
step down as DPP Chair will have a positive effect as it allows
DPP Candidate Frank Hsieh to take over the party and assert a
more moderate posture in the campaign. Hsieh is more moderate
than Chen. The United States does not interfere in Taiwan's
domestic politics and has no preference between the candidates.
The USG can work well with any Taiwan politician as long as they
do not support destabilizing pro-independence policies.


6. (C) Zhang agreed with Christensen's overall statement and
said that it is important to not exaggerate the threat posed by
the referendum. Appearing to lament the ignorance of many of
his influential compatriots, he asserted that, while there are
some in China who are pleased with the LY results and believe
that the referendum is not a threat, there are still many who
are concerned about the referendum and see it as a threat to
stability. He also agreed that DPP Candidate Hsieh is more
moderate and said that no matter who wins the election that
person would be better than President Chen Shui-bian.

President Chen Still A Threat
--------------


7. (C) Like many scholars, Zhang voiced concerns that President
Chen still has lots of space and opportunity to cause problems
until he steps down. He wondered whether Chen would accept the
results of the Presidential election and noted that there is no
disadvantage for President Chen to take radical actions. In
addition, President Chen will likely still have opportunities to
play a destabilizing role even after he steps down from office.
DAS Christensen stressed that there continues to be democratic
constraints on President Chen that will prevent him from
implementing any radical actions. President Chen will not be
able to carry out any actions not supported by the people of
Taiwan unless Beijing overreacts and gives President Chen an
excuse to enact radical policies and the domestic atmosphere
necessary to implement those policies.

A Peaceful Framework
--------------


8. (C) Zhang asserted that although the new leadership in
Taiwan will likely be more moderate and it will be relatively
easy to resolve such issues as cross-Strait tourism and Taiwan
investment in the Mainland, it will be very difficult to reach
agreement for a "peace framework" as proposed by President Hu
Jintao during the 17th Party Congress. Both sides still
disagree on the definition of the 1992 consensus. At the time
of the 1992 meetings in Singapore, the focus was on creating the
Three Links, not on creating a Consensus on one China, which was
just a convenient way to move on to the important issues. The
"One China" concept was not strictly defined and it was easy to
get around it. Now it is a different era. The three direct
links and other problems are not too difficult to achieve, while
the "One China" concept is problematic. For there to be an
agreement on a peaceful framework, both sides must discuss
issues such as the definition of "One China," Taiwan's identity
and other difficult issues. It will not be easy to discuss
these issues, but President Hu made the proposal, and now China
must do it. [Note: Zhang seemed quite critical of HJT's
statements in the 17th Party Congress speech because they set
the bar too high for the foreseeable future] DAS Christensen
urged that China avoid discussing definitions of "One China"
with the new leadership in Taiwan and also to stop insisting on
pre-conditions for discussions. In addition, there need not be
an explicit agreement for both sides to have a "peaceful
framework."

Squeezing Taiwan's International Space
--------------

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9. (C) DAS Christensen expressed concern over Beijing's
attempts to squeeze Taiwan's international space by preventing
Taiwan from having meaningful participation in international
organizations requiring statehood for membership, by placing
unacceptable conditions on Taiwan's membership in international
organizations for which statehood is not a prerequisite, and by
competing with Taiwan for diplomatic recognition. Reports
suggest that Beijing has also apparently considered other
measures that would lead to instability such as proposing a new
civil aviation route near the middle of the Taiwan Strait.
These aggressive measures are causing problems and are
counterproductive. He urged that academics like Zhang advise
Beijing to find a better and more flexible way in dealing with
Taiwan. The proposed mid-Strait civil aviation route is a bad
and dangerous idea, militarily and politically, at any time and
especially in the run-up to the March general election in Taiwan.


10. (C) According to Zhang, lots of his friends have suggested
to the Central Government that if KMT Candidate Ma Ying-jeou
becomes President and there continues to be cross-Strait
stability, then in the third to fifth year of Ma's Presidency,
Beijing should allow Taiwan to have some kind of representation
in some international organizations. While Beijing would never
support Taiwan joining organizations as a country, perhaps it
can have observer status to organizations such as the World
Health Organization. Zhang agreed that increasing Taiwan's
international space would decrease cross-Strait tensions. He
added, however, that the hardest part of his Taiwan work over a
period of twenty years has been getting Mainland officials to
acknowledge different or new points of view and increase
understanding about Taiwan and the views held by people there.
DAS Christensen in reply emphasized the constructive role played
by scholars and researchers in trying to resolve Taiwan issues
and called for the reconsideration of more moderate approaches
to cross-Strait relations, as advocated by Wang Daohan in the
late 1990s. He cited Wang's flexible idea of shared sovereignty
as the type of innovative thinking that one rarely sees in
high-level discussions of Taiwan on the mainland and that will
be necessary if the mainland is to seize the opportunity of
improving relations across the Strait when a new leadership
assumes office in Taiwan on May 20.


11. (C) DAS Christensen cleared this report.
JARRETT