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Cablegate: Uscc Delegation Discusses U.S.-Taiwan And

VZCZCXRO1157
OO RUEHCN RUEHGH
DE RUEHIN #1408/01 2690724
ZNR UUUUU ZZH
O 250724Z SEP 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0013
INFO RUEHBJ/AMEMBASSY BEIJING 8612
RUEHUL/AMEMBASSY SEOUL 9800
RUEHKO/AMEMBASSY TOKYO 0235
RUEHCN/AMCONSUL CHENGDU 2844
RUEHGZ/AMCONSUL GUANGZHOU 1431
RUEHHK/AMCONSUL HONG KONG 0062
RUEHGH/AMCONSUL SHANGHAI 2251
RUEHSH/AMCONSUL SHENYANG 6802
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 TAIPEI 001408

SENSITIVE
SIPDIS

STATE PASS USCC FOR SCOTT BUNTON

E.O. 12958: N/A
TAGS: PREL PGOV MCAP MARR CH TW
SUBJECT: USCC DELEGATION DISCUSSES U.S.-TAIWAN AND
CROSS-STRAIT RELATIONS WITH SENIOR OFFICIALS

SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY.

1. (SBU) Summary: Members of the U.S.-China Economic and
Security Review Commission (USCC) met August 22 with key
members of President Ma Ying-jeou's administration and the
head of the island's main opposition party to review the
status of U.S. relations with Taiwan and assess the evolving
cross-Strait relationship. Members of the Ma adminstration
took pains to emphasize that, while the President hoped to
improve Taiwan's ties with the PRC, relations with the United
States remained paramount. Ma's National Security Advisor
and Defense Minister stressed the importance of U.S. military
hardware in the island's defense strategy. The Vice Foreign
Minister emphasized the need for Taiwan's partners like the
United States to support President Ma's flexible approach to
securing meaningful participation in UN specialied agencies.
The leader of the Democratic Progressive Party (DPP)
cautioned that President Ma's approach to China put Taiwan's
sovereignty and security in jeopardy. End summary.

NSC Chief: Status Quo the Only Cross-Strait Option
--------------------------------------------- -----

2. (SBU) NSC Secretary General Su Chi and the members of the
USCC delegation led by Vice Chairman Carolyn Bartholomew
discussed cross-Strait relations, Taiwan's long-term goals
and defense needs, and U.S.-Taiwan relations during their
hour-long meeting. Beijing threatened to use force against
Taiwan in the mid-1990s and tried to press unification in the
late 1990s, Su observed, but both efforts failed.
Subsequently, President Chen Shui-bian's effort to promote
independence during his tenure also was a disastrous failure.
This leaves the cross-Strait status quo, which 80 percent of
the people in Taiwan support. Su was confident the status
quo could be sustained for some time because, he said, PRC
President Hu Jintao saw a stable cross-Strait relationship as
his historical legacy. Hu, who leaves office in 2012, has
expressed interest in a cross-Strait peace agreement. Su
stressed the importance of Taiwan leaders engaging directly
with Hu, who, if needed, can override opposition from some in
the PLA and Foreign Ministry to international space and peace
agreement initiatives.

3. (SBU) Not wanting to appear "too greedy" in seeking
concessions from Beijing, Taiwan will work to build trust
step-by-step, focusing first on economic ties and then
addressing international space issues, Su said.
Understanding the difficulty and time required to deal with
the growing PRC military threat, Taiwan will delink military
from other issues and continue to build up its own defense
capabilities. Although Beijing regularly lobbies the U.S.
against arms sales to Taiwan, it rarely raises the issue with
Taiwan, he noted. Su stressed Taiwan's wish to move ahead on
the seven pending U.S. arms sales notifications, noting that
President Ma Ying-jeou had made this point in discussions
with U.S. Senators and Representatives during his recent U.S.
transits. In addition to these pending sales, Su said, there
was bipartisan KMT-DPP support for buying F-16C/Ds. These
were needed to replace F-5E "flying coffins," and would
bolster Taiwan's position in dealing with the PRC, Su
explained.

4. (SBU) Ultimately, though, Taiwan cannot compete militarily
with the PRC, especially in missiles, and therefore needs to
take a broader approach to security incorporating all
elements of power. These include military defense and
deterrence, "alliance" with the United States and others,
assurances of moderation to China and soft power, especially
the power of Taiwan's democracy. President Ma is working to
foster internal unity and build bridges to the opposition DPP
Party, for example, appointing TSU stalwart Lai Shin-yuan as
chairperson of the Mainland Affairs Council (MAC). The
previous DPP approach to China that combined provocation plus
defense was a recipe for disaster, Su argued. Under the new
KMT administration, there has been a paradigm shift in
Taiwan's approach to China, the U.S., and other countries.

TAIPEI 00001408 002 OF 003


Su believed the signals from Washington have been positive,
though he acknowledged it would take time to rebuild
understanding and trust after eight years of DPP rule.

VFM: Taiwan Needs Voice in International Organizations
--------------------------------------------- ---------

5. (SBU) Echoing points made by President Ma Ying-Jeou
earlier in the day (reported septel), Vice Foreign Minister
David Lin stress the need for Taiwan to have a voice in key
international organizations. That said, the Ma
administration hoped to avoid the confrontational - and
ineffective - approach of the previous government. Thus, a
proposal to the UN recently submitted by Taiwan's diplomatic
allies sought meaningful participation in international
organizations and not membership. While Taiwan did not
expect the proposal submitted by its diplomatic allies on
August 14 to be voted on at the UNGA, Lin said, it was
essential that the United States and others support it
publicly. Taiwan's eventual target was to obtain WHA
observer status in May 2009.

Defense Minister: U.S. Arms Decision Urgent
-------------------------------------------

6. (SBU) MND,s top priorities were enhancing combat
capabilities, moving to an all-volunteer force by 2013 and
finalizing the procurement of U.S. arms currently under USG
consideration, Defense Minister Chen Chao-min told visiting
members of the USCC. Taiwan under President Ma was committed
to its own defense, Chen said, not least by maintaining its
defense budget at no less than 3% of GDP. He repeatedly
emphasized the need to move forward with a pending sale of a
package of U.S. arms to enhance Taiwan's self-defense
capabilities in the face of a rapidly expanding PRC military
threat. Without quick U.S. action, Chen said, his Ministry
would be forced to return procurement funds to Taiwan,s
treasury. More seriously, failure to complete the deal could
lead some on Taiwan to doubt the U.S. commitment to Taiwan,s
defense. While there was a history of good cooperation
between MND and DoD, Chen said, he recognized the need for
Taiwan to work to rebuild mutual trust damaged due to actions
by the previous (Chen Shui-bian) administration. He noted
that the USCC annual report and DOD,s annual report on
China,s Military Power contributed greatly to Taiwan,s
understanding of China.

7. (SBU) Chen said President Ma hoped to improve cross-Strait
relations but also recognized the need to negotiate from a
position of strength. Thus, although cross-Strait relations
were progressing in a positive direction, Taiwan would not
relax its military readiness. Chen cited a recent statement
by one of China's Central Military Commission Vice Chairmen
that China would not renounce the use of force against
Taiwan. Responding to questions from the Commissioners, Chen
also highlighted concerns over PRC defense spending, missile
build-up, and cyber attacks. Asked whether Taiwan and China
had a military hotline, Chen responded that they did not.

Opposition Chair Pans Cross-Strait Rapprochement
--------------------------------------------- ---

8. (SBU) After briefly acknowledging her own party's
"political troubles" stemming from former President Chen
Shui-bian,s alleged involvement in a campaign finance and
money laundering scandal, opposition DPP Chairperson Tsai
Ing-wen quickly turned to what she called the Ma
administration's misguided cross-Strait policy. Despite some
obvious tensions, cross-Strait relations were relatively
stable when the DPP was in power, Tsai maintained. On the
other hand, Ma's approach increases Taiwan's dependence on
China and raises the potential for crisis. Ma was raising
expectations, she said, ceding the initiative to China and
permitting Chinese "intrusion" into questions of sovereignty.
Closer ties also would have high social and economic costs,
she warned, citing China's "ambush" investment tactics in the

TAIPEI 00001408 003 OF 003


real estate industry. Chinese investors would move in, push
up prices to earn quick profits, and exit just as quickly,
leaving behind property prices too expensive for young
graduates. Instead of relying on China to improve Taiwan's
economy, Tsai suggested Taiwan accelerate industrial
restructuring and increase its competitiveness in the
science, technology, and education sectors.

9. (SBU) She attributed the DPP,s loss in March 2008
Presidential election to economic issues (job losses, wage
rate problem, commodity prices, and import inflation).
Nevertheless, she predicted, cross-Strait relations, not the
economy, would continue to be a major focus of future
political campaigns. Tsai labeled the Ma administration as
"too soft" on sovereignty issues, saying Ma was blurring the
lines between China and Taiwan. When asked about DPP's
current policy on Taiwan's status, Tsai said the party
preferred Taiwan be accepted as a country with 23 million
people. She added that Taiwan is "at least an entity with
international personality" and has the right to make its own
decisions, including on what kind of relationship to have
with China.

10. (U) The delegation has cleared this cable.
YOUNG

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