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C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 000762 
 
SIPDIS 
 
E.O. 12958: DECL: 06/03/2023 
TAGS: PREL PGOV AORG MARR MASS MCAP CH TW
SUBJECT:  TAIWAN NSC SECRETARY-GENERAL SU CHI ON 
CROSS-STRAIT NEGOTIATIONS; U.S. ARMS SALES 
 
Classified By: AIT Acting Director Robert S. Wang.  Reasons: 1.4 (b/d) 
 
¶1.  (C) Summary.  NSC Secretary General Su Chi told Senate 
Foreign Relations Committee senior staff member Frank Jannuzi 
that the Ma Administration considers its U.S. ties to be even 
more important than its relations with Beijing.  He said the 
former is critical to both Taiwan's survival and prospects 
for improving cross-Strait ties.  Su indicated that Ma wants 
to normalize Taiwan's economic relations with the mainland as 
quickly as possible while pressing the PRC to afford Taiwan 
greater "international space."  He hopes Beijing will agree 
to Taiwan,s observer status in the WHA next May, and stated 
that Beijing has now agreed to allow current Taiwan officials 
to participate in upcoming SEF-ARATS meetings as 
&consultants.8  Taiwan is also talking to Beijing about 
freezing the number of missiles aimed at the island, if only 
as a symbolic gesture, he said, but the prospect of a &peace 
agreement8 is in the distant future. 
 
¶2.  (C) At the same time, Su Chi reiterated Taiwan,s desire 
to strengthen its relations with the U.S. because this would 
increase Taiwan,s leverage in its discussions with China. 
Specifically, he expressed the hope that the U.S. could 
proceed on existing arms procurement items (citing PAC-II and 
PAC-III,s in particular) and consider selling F-16's as 
well.  Su Chi said the F-16,s would only replace earlier 
models and, in his opinion, would not undermine ongoing 
cross-strait discussions or alter the existing military 
balance.  He voiced Taiwan,s continued interest in an FTA 
although he recognized the substantive and political value of 
progress on TIFA.  Finally, Su said Beijing has now agreed to 
allow foreigners to use the direct weekend charter flights 
once they start up in July.  End Summary. 
 
¶3.  (C) National Security Council Secretary-General Su Chi 
met with visiting Senate Foreign Relations Committee senior 
staff member Frank Jannuzi and AIT Acting Director Bob Wang 
on June 2.  Jannuzi asked Su Chi to pass the best wishes of 
Senator Biden to President Ma Ying-jeou, explaining that the 
senator was very encouraged by Ma's inaugural address laying 
out a positive cross-Strait agenda.  There is a new, more 
relaxed attitude about Taiwan in Washington these days, 
Jannuzi said. 
 
Cross-Strait Negotiations 
------------------------- 
 
¶4.  (C) Jannuzi told Su Chi that members of Congress want to 
ensure U.S. actions reinforce Ma's efforts to improve 
cross-Strait relations.  While the U.S. does not intend to 
mediate between Taiwan and the PRC, neither does it want to 
do anything that undermines Taiwan or cross-Strait relations. 
 Jannuzi asked Su Chi how the U.S. can help the cross-Strait 
process and, specifically, whether congressional 
notifications of arms sales would enhance or undermine 
Taiwan's cross-Strait negotiations. 
 
¶5.  (C) Su responded that while the Ma administration is 
working to improve relations with China, it also wants to 
improve relations with the U.S.  In fact, he said, he and 
President Ma consider relations with the U.S. as more 
important than relations with China.  China "only respects 
power," he said, and, thus, U.S. support "is essential to our 
approach to China."  The Ma administration "sees China as a 
threat and an opportunity," with the emphasis now on 
opportunity. 
 
¶6.  (C) Su explained that Taiwan's top priorities in its 
negotiations with the PRC are charter flights, PRC tourists 
visiting Taiwan, normalizing bilateral relations (property, 
investment, legal issues), and international space.  He 
pointed out that forty percent of Ma's inaugural address 
focused on international space, which indicates the 
importance of international space for Taiwan.  Ma 
specifically requested KMT Chairman Wu Poh-hsiung to deliver 
the international space message to Hu Jintao during Wu's 
visit to Beijing last week.  Hu's appointment of Vice Foreign 
Minister Wang Yi as head of the PRC Taiwan Affairs Office 
(TAO) a few days later, Su argued, showed Beijing "got the 
 
TAIPEI 00000762  002 OF 004 
 
 
message and is willing to talk about international space." 
There is much talk about a cross-Strait peace accord, Su 
noted, but this will take a longer time. 
 
¶7.  (C) Su told Jannuzi that the cross-Strait negotiations 
starting next week between Taiwan's Strait Exchange 
Foundation (SEF) and the PRC's Association for Relations 
Across the Taiwan Strait (ARATS) will be "unofficial- 
official" negotiations.  Beijing, he explined, had agreed 
that government officials from both sides can sit at the 
negotiating table as advisors or consultants.  Negotiations 
on PRC tourism to Taiwan are already in this 
"unoffical-official" format, he said, while those on charter 
flights remain under the existing civilian format.  (Note: 
The "Macao channel" that negotiated the current cross-Strait 
holiday charter flights over the past several years consisted 
of delegations from Taiwan and Mainland China under industry 
-- airline and tourism -- leadership with unacknowledged 
government officials imbedded in the delegations.)  This will 
be a "new way of talking," Su explained, with "officials 
doing the negotiating." 
 
International Space, Cease Fire, and Foreign Passengers 
--------------------------------------------- ---------- 
 
¶8.  (C) Su said he is fully confident cross-Strait economic 
negotiations on charter flights and PRC tourists will 
succeed, but he remains uncertain about the issue of 
international space.  Jannuzi responded that Senator Biden 
had written WHO in support of Taiwan participation and many 
other members of Congress are deeply frustrated over 
Beijing's recalcitrance.  Expressing appreciation for this 
support, Su Chi stressed that "health issues know no 
borders."  The Ma administration, he explained, is stressing 
pragmatic participation in functional IO's such as the World 
Bank, IMF, and ICAO.  It may also decide to go slow on the UN 
issue this year.  The Ma administration will be closely 
watching WHO over the next year as an indicator of Beijing's 
intentions, Su said, expressing hope for observer status next 
May under the practical name "Chinese Taipei." 
 
¶9.  (C) Jannuzi asked Su Chi if there is any chance for a 
diplomatic cease fire between the PRC and Taiwan.  Su 
responded that Taiwan has privately informed Beijing of its 
desire for a cease fire, and "I think they understand."  The 
PRC bureaucracy, however, is an obstacle to a cease fire 
settlement.  The military and foreign policy bueaucracies, he 
rued, "are tough nuts to crack."  Thus, Taiwan has repeatedly 
sought to meet directly with Hu Jintao, he explained, in 
order "to convince" PRC bureaucrats, who are focused on 
"their own bureaucratic turf," to alter their ways.  Taiwan's 
strategy, Su said, is to "talk with the big guys in order to 
reach the working level officials."  Hu, moreover, has his 
own vested interest in achieving progress, Su said, because 
Taiwan will be his "historical legacy."  Besides, he added 
with a smile, "we have shown that Taiwan can make trouble." 
 
¶10.  (C) Su stated that Taiwan had pressed Beijing to include 
foreigners in the cross-Strait charter flight agreement.  He 
urged Jannuzi to encourage U.S. congressional travellers to 
use the direct cross-Strait route, as this might help Taiwan 
convince Beijing to permit foreign carriers to participate in 
the cross-Strait flights.  Beijing's reluctance to allow 
foreigners on the cross-Strait aircraft, Su explained, was in 
large part a "face issue."  When Beijing finally agreed to 
allow foreign nationals to fly the new cross-Strait flights, 
it requested Taiwan not to publicize this decision.  Beijing 
also preferred to limit the number of PRC airports 
participating in the charter flights in the run up to the 
August olympics, Su explained, but it also wanted to help Ma 
realize his pledge to achieve charter flights in July,  So, 
Beijing agreed to an initial short list of five PRC cities -- 
Nanjing, Shanghai, Xiamen, Beijing, and Guangzhou. 
 
PRC Military Buildup 
-------------------- 
 
¶11.  (C) Su told Jannuzi that the Ma administration hopes the 
cross-Strait "rapprochement process" underway will reduce the 
 
TAIPEI 00000762  003 OF 004 
 
 
security threat facing Taiwan.  It has urged Beijing to 
freeze missile buildup in order to increase Taiwan's sense of 
security.  But while Taiwan can realistically expect to 
attain many cross-Strait objectives, particularly on charter 
flights and PRC tourism, Su said, security and international 
space are two issues on which Taiwan and the PRC remain at 
odds.  Of the two, he said, international space is the more 
urgent, since there is imminent danger of diplomatic shifts 
by Paraguay, Panama, and other Taiwan diplomatic partners. 
Still, there has been some improvement, he said, explaining 
that the number of PRC military aircraft sorties over the 
Taiwan Strait had plummetted after the March 22 presidential 
election from 7-10 per day to near zero. 
 
¶12.  (C) On the security front, Su told Jannuzi, Taiwan will 
honor its commitment to purchase PAC-3 missiles, P-3C 
anti-submarine surveillance aircraft, and F-16 C/D fighters. 
In the future, if Beijing agrees to freeze its military 
buildup, Taiwan might consider a similar freeze on weapons 
acquisition.  Meanwhile, Taiwan needs the F-16 C/D's, Su 
argued, both to replenish its dwindling stock of fighters and 
to demonstrate Taiwan's resolve to China. 
 
Congressional Notification 
-------------------------- 
 
¶13.  (C) Jannuzi asked if U.S. congressional notification of 
weapons sales would help or undermine Taiwan's negotiations 
with the PRC.  Notifications are not a problem, Su responded, 
because these systems have already been funded and Beijing 
has probably already protested the sales to the U.S.  Timing 
of notifications, however, could be an issue.  June-July, for 
example, would not be a good time, because Taiwan will be 
negotiating, then implementing, the charter flight and 
tourism agreements.  He suggested that September, after 
President Bush returns from China, would be a good time for 
notifications. 
 
¶14.  (C) Jannuzi reiterated that Congress wants to be helpful 
and not undermine Taiwan and the cross-Strait process. 
Congress, moreover, plays a role in congressional 
notification timing, he said, because the administration 
usually asks Congress whether the time is right to send 
notifications to the Hill.  Su's candor, he said, would be 
very helpful to Congress as it considers future arms sale 
notifications.  ADIR Wang pointed out that given the U.S. 
congressional schedule and notification time requirements, a 
late notification could risk the diversion of Taiwan's 2008 
budget funds to other defense items. 
 
TIFA and FTA 
------------ 
 
¶15.  (C) Su Chi asked about the prospects for a U.S.-Taiwan 
FTA.  While the TIFA process is very useful, he said, the Ma 
administration does not want to give up on working toward an 
FTA.  Just launching the FTA process would be "politically 
very helpful," he said, stressing that the pace and progress 
of FTA discussions is not important.  Jannuzi responded that 
FTA's are problematic in Washington now.  He urged Taiwan to 
understand that a concrete TIFA with its investment, 
taxation, extradition, and other agreements, offers distinct 
advantages and a much shorter time line than an FTA. 
Moreover, an early TIFA would both deepen U.S.-Taiwn 
commercial ties and demonstrate to Beijing the close 
U.S.-Taiwan ties. 
 
Comment 
------- 
 
¶16.  (C) Su Chi clearly wanted to use this opportunity to 
urge the U.S. not to weaken its support for Taiwan in the 
context of improving cross-strait relations.  His message was 
that U.S. support would strengthen Taiwan,s position and 
enhance cross-strait negotiations and would not disrupt 
progress. 
 
 
 
 
TAIPEI 00000762  004 OF 004 
 
 
 
 
 
 
 
 
 
 
 
 
WANG