KMT CHAIRMAN ON CROSS-STRAIT TALKS, TAIWAN POLITICS

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000650

SIPDIS

E.O. 12958: DECL: 06/03/2019
TAGS: PREL PINR CH TW
SUBJECT: KMT CHAIRMAN ON CROSS-STRAIT TALKS, TAIWAN POLITICS

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Classified By: The Director for reasons 1.4(b/d)


1. (C) Summary. Chinese President Hu Jintao is committed to
step-by-step progress on cross-Strait ties, KMT Chairman Wu
Poh-hsiung told the Director during their June 3 meeting.
Wu, just returned from an 8-day trip to China, was optimistic
about prospects for reaching a framework trade deal with
China as long as the agreement deals with purely economic
issues. The next round of KMT-CCP talks will be held in
July, focusing on cultural issues. While the visit to
Beijing and Shanghai by Kaohsiung mayor Chen Chu was billed
as a landmark high-level visit by a senior member of the
pro-independence DPP party, Wu told us travel by lower-level
party members is increasingly common. End Summary.


2. (C) The Director discussed cross-Strait relations and
Taiwan's domestic political situation during a cordial,
one-hour conversation with KMT party Chairman Wu Poh-hsiung
June 3. Wu, who returned June 1 from an eight-day visit to
Nanjing, Beijing, Hangzhou and Chongqing, appeared eager to
play the role of elder KMT statesman. Wu noted that he had
just visited Taiwan Vice President Vincent Siew, who was
released from the hospital June 2 following surgery for lung
cancer. All things considered, Wu said, Siew looked
relatively well.

Olympics, APEC and WHA Top Hu's List of Cross-Strait Hits
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3. (C) Recounting his just-completed trip to the PRC to mark
the 80th anniversary of Sun Yat-sen's burial in Nanjing, Wu
said he had been well-received by President Hu Jintao, CPPCC
Chairman Jia Qinglin and TAO Director Wang Yi, who was Wu's
escort for much of the visit. There were no surprises in his
meeting with Hu, Wu said. Hu cited three specific
developments as evidence of Beijing's goodwill toward the Ma
administration - Taiwan's treatment at the Beijing Olympics,
the decision to allow former VP Lien Chan to represent Taiwan
at the November 2008 APEC Senior Officials Meeting and the
invitation for Taiwan to participate as an observer at the
May 2009 WHA meeting in Geneva.


4. (C) In private, Wu said, he was prepared to admit that
China's goodwill was the key to these breakthroughs.
Publicly, however, the Ma administration and the KMT would
only admit that Chinese goodwill was one factor that
contributed to the expansion in Taiwan's international space.
The WHA deal was particularly important, both to Taiwan and
China, Wu said. With the WHA meeting opening as worries
about swine flu spread across the globe, the people of Taiwan
would have been very angry if China had blocked Taiwan's
participation for political reasons.

China Committed to ECFA, But Has Upper Hand in Talks
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5. (C) Both sides are sincere about efforts to complete an
Economic Cooperation Framework Agreement (ECFA) this year, Wu
said. Tactically speaking, though, Taiwan is at a
disadvantage. With provisions of the ASEAN 3 trade agreement
set to take force in 2010, Taiwan exporters face being priced
out of the market if China and its other neighbors lower
their tariffs, leaving Taiwan on the outside. China, of
course, knows this, Wu said, and can be expected to drive a
tough bargain. Naturally, Taiwan's negotiators will strive
for the best possible deal. The bottom line for the Ma
administration, though, is that the final agreement must be
solely about economics. Any attempt by the PRC to insert
"political" language into an ECFA would make it impossible to
sell to the people of Taiwan.


6. (C) Wu expressed optimism that, once an ECFA is signed,
other countries in the region will feel more comfortable
pursuing trade deals with Taiwan. As long as these
agreements steer clear of nomenclature that would suggest
they are between sovereign states, Wu suggested, China will
not oppose them. Indeed, he claimed, Singapore had been
prepared to sign an FTA with Taiwan during the Chen Shui-bian
administration. The deal fell through only because Chen
insisted it be called a Singapore-Taiwan FTA. The Director
noted that there was no indication that Washington is
prepared to discuss new FTAs with Taiwan or anyone else, for
now, given ongoing domestic debates on the basic concept.

KMT-CCP Forum Set for Hunan in July
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7. (C) The next KMT-CCP Forum will take place July 12-13 in
Changsha, Hunan, Wu revealed. Compared to previous such

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gatherings, this Forum will be relatively modest, focusing
primarily on expanding cultural exchanges. In addition to
KMT officials, Taiwan's delegation hopefully will also
include representatives from other organizations and
political parties. There will be about 100 people in
Taiwan's delegation, he projected.

DPP: Divided, But Also Talking to China
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8. (C) Wu downplayed the significance of Kaohsiung Mayor Chen
Chu's visit to Beijing and Shanghai. Chen, the opposition
DPP's most senior elected official, tried to portray her trip
as a spontaneous affair, Wu said. In fact, however, it was a
carefully choreographed event. The mayor had to go, he
suggested, to insure that the PRC would encourage travelers
to go to the city in July for the World Games. Kaohsiung is
counting on PRC tourists to fill many of the seats at the
Games' venues. In any event, he claimed, except for the
party's most senior leaders, travel by DPP officials is
increasingly commonplace.


9. (C) More generally, Wu said, the DPP suffered from a lack
of unity. Party Chair Tsai Ing-wen had no choice but to
organize the May 17 protest against the Ma administration, if
only as a way to rally the party faithful. In the final
analysis, though, the protest had strengthened neither her
nor her party's position. Similarly, Wu projected that local
elections scheduled for December would do little to revive
the opposition. The consolidation of several counties and
municipalities meant that key races will be postponed until

2010. KMT candidates should hold their own in the remaining
races, Wu said, which are, in any event, less likely to be
seen as referenda on the ruling party.

Comment
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10. (C) By all accounts, Wu is being pushed out of the KMT
Chairmanship this summer by Ma Ying-jeou, and is not pleased
with the prospect. But the offset appears to be the
nomination of his son, Wu Chih-yang, as the KMT candidate for
magistrate of Taoyuan county, one of the fastest growing
parts of Taiwan. For now, Wu is playing the gentleman, but
could change if he feels his treatment by the President is
undignified.
YOUNG