KMT CHAIRMAN WU POH-HSIUNG ON CROSS-STRAIT FORUM,

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001789 SIPDIS E.O. 12958: DECL: 12/31/2028 TAGS: PGOV PREL ECON ETRD CH TW SUBJECT: KMT CHAIRMAN WU POH-HSIUNG ON CROSS-STRAIT FORUM, WHO/WHA AND DOMESTIC POLITICS Classified By: AIT Director Stephen M. Young, Reasons: 1.4 (b/d) ¶1. (C) Summary: KMT Chairman Wu Poh-hsiung told the Director on December 29 he was optimistic on prospects for a breakthrough regarding Taiwan's participation in the WHA next May, although he acknowledged the issue is not yet resolved. The Director noted that China objects to the U.S. raising the WHO/WHA issue publicly, but Wu stressed that Taiwan hopes the U.S. and others will continue to support Taiwan publicly. Wu said the December 20-21 KMT-CCP cross-Strait forum in Shanghai had gone about as expected. He was also pleased that bankers and officials from both sides had participated, because this could facilitate progress on issues of concern to the Taiwan business community in China. The Director urged the KMT to be careful not to worsen the partisan confrontation in Taiwan, explaining that he had delivered a similar message to DPP Chairperson Tsai Ing-wen. Our concern is that unchecked confrontation in a period of economic difficulty could potentially result in violence and damage to Taiwan's young democracy. Wu took the point and emphasized that the KMT would pay attention to this problem. End Summary. ¶2. (C) The Director met with KMT Chairman Wu Poh-hsiung on December 29 to discuss political developments and the recent KMT-CCP cross-Strait economic and cultural forum in Shanghai. Wu, who was accompanied by former TECRO Representative Stephen Chen, said the forum had gone about as expected. Both Honorary Chairman Lien Chan and President Ma Ying-jeou, who had a good grasp of all the issues covered in the forum, had wanted him, as chairman, to represent the party at the forum. Calling Lien Chan an asset, not a liability, in the cross-Strait relationship, Wu stressed his respect for Lien's contributions. The government is proceeding very carefully, step by step, in developing cross-Strait relations, Wu stressed, adding that President Ma believes Taiwan needs a strong defense to ensure peace in the Taiwan Strait. The Director assured Wu that the U.S. will continue to support Taiwan. ¶3. (C) Wu noted the forum in Shanghai marked his fifth meeting overall with PRC Politburo Standing Committee member Jia Qinglin, and his third meeting just this year. (Note: Wu visited Beijing in May and again in July for the Olympics. In earlier years, when party vice chairman, Wu attended two of the three previous KMT-CCP fora.) Wu described Taiwan Affairs Office Director Wang Yi as very capable and familiar with Taiwan. Although Wang's job in the past in China's Foreign Ministry involved suppressing Taiwan in the international arena, he now plays an important and valuable role in coordinating with his former MFA colleagues on policy toward Taiwan. WHO/WHA -------------- ¶4. (C) Without going into details, Wu said Taiwan had let the PRC know it needs greater international space, adding that Beijing understands this need. Wu was optimistic about a breakthrough on WHO/WHA in 2009, pointing out even the WHO secretary general has the authority to invite observers to the annual WHA meeting. Nonetheless, Wu said, the issue is not yet resolved, and Beijing apparently needs to wait until it has an internal consensus. ¶5. (C) Beijing has urged the U.S. not to raise the issue of Taiwan's WHO participation publicly, the Director noted. Wu responded that since Beijing is delaying, it is quite reasonable for Taiwan to seek visible international support from the U.S., Japan and others. Japan has a particular interest in the issue because the large number of travelers between Japan and Taiwan makes cooperation on health and disease issues imperative. ¶6. (C) Mainland-based Taiwan entrepreneurs were prominent participants in the cross-Strait forum, Wu said. The TAIPEI 00001789 002 OF 002 businesspeople have many complaints about doing business in China, including the weak rule of law and the difficulty of qualifying for loans from mainland banks. That is why it was especially important that bankers and officials from both sides participated in the cross-Strait forum. Noting that many Taiwan businesses in Dongguan, Guangdong, had closed, Wu suggested this is also a problem for the PRC because it increases unemployment in China. Beijing's decision to buy flat panel screens is especially welcome, since orders to Taiwan producers have recently dried up as buyers have turned to South Korean suppliers whose prices are now lower because of the depreciation of the Korean Won. Cross-Party Relations -------------- ¶7. (C) Many Taiwan participants in the recent cross-Strait forum, which was entirely open, were not KMT members. Wu added that the KMT had invited some moderate DPP members to attend, but they had not dared to accept. Wu has also stated publicly that he hopes the DPP and Taiwan Solidarity Union (TSU) will participate in the forum next year. Wu noted that DPP Chairperson Tsai Ing-wen declined his recent proposal for a meeting. ¶8. (C) Citing the negative example of Thailand, the Director stressed that it is particularly important during a period of economic difficulty for political parties to avoid partisan confrontation which can lead to violence and damage Taiwan's young democracy. Wu took the point and emphasized that the KMT would pay attention to this problem. However, Tsai Ing-wen is now talking about returning to the streets, he said, adding that such protests are dangerous and cannot be controlled. The Director told Wu he had urged Tsai Ing-wen to be careful and he hoped the KMT would also be careful. Wu claimed that the KMT is gentler and more rational than the DPP. ¶9. (C) The Director asked Wu whether the next KMT-CCP cross-Strait forum might be held in Taiwan. Wu noted that he had suggested internally that the opening session of the next forum be held in Xiamen and the closing session in Kinmen. The KMT hopes to hold the next forum in the first half of the 2009 (May-July) because after that the party will be busy preparing for the local elections in December. The next round of talks between the Straits Exchange Foundation (SEF) and the Association for Relations Across the Taiwan Strait (ARATS) will probably take place in March or April in China, Wu said. Comment - KMT Inside Baseball -------------- ¶10. (C) Wu's current term as party chairman ends next summer and it is not clear yet whether he will retire at that point or might continue for another term. KMT Vice Chairman and Taoyuan County Magistrate Eric Chu (protect),who is close to President Ma Ying-jeou, recently told the Director "in confidence" that Ma plans to replace Wu as KMT party chairman next summer. According to Chu, Wu is willing to go along, so long as his son, Taoyuan KMT Legislator Wu Chih-yang, is nominated as the KMT candidate to replace Chu as Taoyuan magistrate. Chu said that Ma has decided the only way to stop efforts by the KMT apparatus to undermine his presidency is to resume the party chairmanship, which he gave up in early 2007 when he was indicted for misuse of the Taipei mayoral special allowance. According to Chu, Ma is increasingly frustrated with the efforts by KMT elders Wu Poh-hsiung and Lien Chan to limit his influence within the party. Chu added that, once back in the saddle, Ma plans to push KMT reform and rejuvenation as he plans strategy for his 2012 presidential reelection campaign. SYOUNG