MEDIA REACTION: OBAMA ADMINISTRATION, CROSS-STRAIT

UNCLAS AIT TAIPEI 000063 SIPDIS DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - NIDA EMMONS DEPARTMENT PASS AIT/WASHINGTON E.O. 12958: N/A TAGS: OPRC KMDR KPAO TW SUBJECT: MEDIA REACTION: OBAMA ADMINISTRATION, CROSS-STRAIT RELATIONS ¶1. Summary: Taiwan's major Chinese-language dailies focused January 15 news coverage on the Taipei District Prosecutors' Office's search of the Presidential Office Wednesday and the arrest of two Presidential Office staffers for allegedly spying on behalf of China; and on the Control Yuan's decision Wednesday to impeach two former high-ranking government officials over a diplomatic scandal involving Papua New Guinea. In terms of editorials and commentaries, an editorial in the pro-unification "United Daily News" discussed the global economic crisis and the possible emergence of international protectionism. The article said that whether the new U.S. President Barack Obama will take large strides toward protectionism deserves close observation. An op-ed in the pro-independence, English-language "Taipei Times" discussed the Taiwan policy speech recently delivered by Chinese President Hu Jintao, in which he mentioned the idea of building a cross-Strait military confidence-building mechanism. The article concluded by saying, "Taiwan should work with the U.S. in any trilateral military dialogues." End summary. ¶2. Obama Administration "Is International Protectionism about to Emerge?" The pro-unification "United Daily News" [circulation: 400,000] editorialized (1/14): "... As a result, the Israeli-Palestinian issue will be the first quiz on international issues for Barack Obama when he assumes office, and whether he will move drastically toward the direction of protectionism will be his first test in economics. The fact that 'Business Week' in the U.S. has been featuring such an issue [i.e. Obama and protectionism] as its cover story over the past few weeks shows that one should not underestimate its importance; in particular, trade issues between the United States and China deserve [our] close attention. "The United States has been in favorable circumstances over the past twenty-five years; its imports have drastically increased from constituting 9 percent of the U.S.' GDP to 18 percent. Correspondingly, the employed population in the U.S. manufacturing industry has declined from 17 million to 13 million over the past twenty-five years. According to the U.S. statistics, the market share of China's clothing business is now over fifty percent and, while approximately a dozen of major U.S. steel plants were closed recently, one after the other, China's exports of steel pipe to the United States are growing each month. These are all the examples cited by the liberals who advocate protectionism. Since Obama himself has previously expressed a tendency to move toward protectionism in terms of automobiles from South Korea and products made in China, how he will deal with the conflicting issues of free trade and resolving the unemployment problem will be closely watched by everyone. In addition, Obama said rescuing the economy should trump the budget fight -- an effort that will cause government debt to reach US$1.2 trillion in 2009. Washington has also repeated many times its demand that China and petroleum exporting countries move their foreign exchange reserves to help with the economic lacunae of the United States. "Will the United States use protectionism as a tool to exercise pressure on foreign reserves at some point? Or will [Obama] be held on a short leash by the liberals and eventually resort to protectionism? These are trends worthy of close observation. Once a protectionism policy is implemented, a global economic storm will certainly ensue and worsen and no one, including Taiwan, will be able to escape by sheer luck. This is the reason why we must watch [this trend] closely!" ¶3. Cross-Strait Relations "A Closer Look at Hu's 'Six Proposals'" Yu Tsung-chi, a senior fellow of the U.S.-based Atlantic Council, opined in the pro-independence, English-language "Taipei Times" [circulation: 30,000] (1/15): "... Hu's six-point proposal is a response to Ma's policies, which appear to be accepting China's ultimate goal of eventual unification. ... However, issues such as military confidence-building mechanisms are very sensitive, as they touch on Taiwan's sovereignty and national security. Given the dissensions on 'one China' within Taiwan and the possibly negative impact on bilateral relations between Taipei and Washington, Taiwan should be cautious and patient before responding. To prevent possible reactions at home and aboard, Taiwan's military interactions with China must be openly negotiated between China and Taiwan, between Taiwan and the US, and between China and the US. The existing US arms sale policy to Taiwan should not be affected by improving cross-strait military relations. Taiwan should work with the US in RELATIONS any trilateral military dialogues. In particular, Taipei should consult with Washington on how to construct a durable confidence-building mechanism without impairing its national interests because, unlike Beijing, Taiwan doesn't have much experience in negotiating military issues. "Taiwan should also establish measures to prevent divergent viewpoints from further polarizing and debilitating the nation. Confidence-building mechanisms can only reduce the risk of war -- they cannot guarantee against war. Taiwan should not disarm psychologically if China decreases the number of missiles targeting it. After all, China holds all the cards in terms of the missiles. Removing them would be purely symbolic as they could easily be redeployed overnight." YOUNG