This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 003409 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 10/10/2013 
TAGS: PREL PGOV CH TW
SUBJECT: TAIPEI SEEKS TO LIMIT FALLOUT OVER SECRETARY'S 
BEIJING INTERVIEWS 
 
REF: A. TAIPEI 3353 
 
     ¶B. 10/26 AIT-EAP/TC E-MAIL (NOTAL) 
     ¶C. TAIPEI 3234 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
¶1. (C) Summary: Chen administration officials are working to 
limit media and political fallout from a set of interviews 
given by Secretary Powell in Beijing on October 24. 
President Chen Shui-bian expressed appreciation to the AIT 
Director on October 28 for a series of public statements by 
the Secretary and other Department officials clarifying that 
U.S. policy has not changed.  Nevertheless, the media and 
political parties continue to utilize the episode to advance 
a variety of domestic political agendas.  The Taiwan 
Solidarity Union (TSU) has focused on the Secretary's remarks 
in an attempt to resuscitate their flagging Legislative Yuan 
(LY) campaign while the opposition Pan-Blue has used the 
episode to justify opposition to the USD 18 billion special 
defense procurement budget.  Former President Lee Teng-hui 
has played both sides of the public debate, asserting on the 
one hand that the Secretary's remarks were blown out of 
proportion by an ignorant Taiwan media but also asserting 
that the comments should remind Taiwan's people of the need 
to become a "normal country."  Some Democratic Progressive 
Party (DPP) officials warn that the episode could have longer 
term policy consequences, including over the fate of the 
special defense budget.  Other observers, however, suggest 
that the incident will help remind leaders in Taipei that 
Taiwan does not exist in a vacuum.  End Summary. 
 
Switch to Moderation 
-------------------- 
 
¶2. (C) Chen administration officials are sending out 
reassuring messages to the media in an effort to stem the 
public relations furor that they themselves fanned after 
Secretary Powell's comments on Taiwan's status during two 
 
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October 24 interviews in Beijing (Ref A).  President Chen 
Shui-bian told the Director October 27 that he appreciated 
the Secretary's subsequent clarification and the State 
Department's reassurances that U.S. policy had not changed. 
Presidential Office Deputy Secretary General James Huang told 
reporters the same day that the Powell CNBC interview and 
statement by EAP DAS Schriver to TECRO Washington Rep. David 
Lee that the USG still respects the 1982 U.S.-Taiwan "Six 
Assurances" were "helpful and positive."  Unnamed 
presidential aides told the Taiwan media that the leadership 
"breathed a sigh of relief" following Washington's 
clarifications that the Secretary did not intend to signal a 
new policy change.  Soon thereafter, signs emerged of efforts 
to stop the damage and take credit for effective "crisis 
management" by the Chen administration. 
 
¶3. (C) The initial response in Taipei to the Secretary's 
interviews was shock, combined with fear that the USG had 
decided on a major policy reorientation without Taipei's 
knowledge.  Mainland Affairs Council (MAC) Chairman Joseph Wu 
told AIT that Taipei's biggest concern was that the 
Secretary's statements on reunification and non-sovereign 
 
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status would become regular policy formulations. 
Presidential Office Secretary Liu Shih-chung said Taipei was 
also surprised over the timing of the statements, noting that 
Taipei has been trying for months to repair relations with 
both Beijing and Washington.  Green-leaning Academia Sinica 
political analyst Hsu Yung-ming asserted that "what the DPP 
feared most was that there was some major U.S. policy 
decision made and they had totally missed signs of its 
formulation." 
 
¶4. (C) The Chen administration's current attempts to play up 
the strength of the U.S.-Taiwan relationship stand in 
contrast to the initial barbed public response to the 
Secretary's references to Taiwan's lack of sovereignty (Ref 
 
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B).  President Chen used public meetings with visiting 
foreign delegations on October 25-27 to emphasize Taiwan's 
sovereign and independent status and complain that it is 
"unfair" that many countries do not recognize this "fact." 
Premier Yu Shyi-kun and Foreign Minister Mark Chen offered 
similar comments during Legislative Yuan (LY) interpolations. 
 Yu went further than other officials on October 28 when he 
used the "one country on each side" formulation initially 
coined by Chen Shui-bian in 2002 to describe relations 
between Taiwan and the Mainland.  No senior official has used 
the phrase since the March 20 election. 
¶5. (C) The decision to take a combative public line was 
clearly made at the top.  Officials like MAC's Wu and 
Presidential Office Deputy SecGen Huang told AIT immediately 
after the Secretary's interview was reported in Taipei that 
they would counsel a quiet, low-key response.  MOFA North 
American Affairs Director General Victor Chin told the Deputy 
Director that the decision to tone down rhetoric was also 
made at the top.  Chin said that Chen discarded plans to make 
barbed comments at an Asia Foundation dinner on October 28 
after learning about Secretary Powell's interview with CNBC. 
However, just as Yu appeared to play domestic politics with 
"one country on each side," officials like Huang and Wu 
consistently used restrained language with the media 
throughout the week to signal to us that Taipei's commitments 
to improved relations with Washington and Beijing remain 
strong. 
 
Political Reaction Polarized 
---------------------------- 
 
¶6. (C) DPP officials expressed somewhat contradictory 
concerns over the political ramifications of the controversy. 
 DPP Secretary General Chang Chun-hsiung told AIT that the 
government feared that the Secretary's interview may signal 
to the public that the USG was pushing Taiwan towards 
unification.  "Many centrists in Taiwan might come to the 
conclusion that even the United States wants Taiwan to be 
unified with China," he stated, "so they may decide to simply 
give up hope."  That, he suggested, might also reduce support 
for the special defense budget.  However, Chang's deputy, 
Chung Chia-bing, and officials at the Presidential Office and 
MAC expressed the exact opposite concern, warning that the 
Secretary's sovereignty language would strengthen the hand of 
 
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pro-independence fundamentalists.  Chung noted that the TSU 
decided after the Powell interview to reschedule a "name 
rectification" rally on December 5 that had been originally 
canceled under pressure from the DPP, which is planning a 
rally on December 4 that will feature a more moderate 
nationalist agenda (Ref C).  Academia Sinica's Hsu asserted 
that the Secretary's comments on Taiwan sovereignty breathed 
new life into the TSU's floundering electoral campaign.  Hsu 
warned that the TSU may follow-up on the episode by proposing 
a referendum on whether or not "Taiwan is a sovereign, 
independent country" in conjunction with the December 11 LY 
election, a move Hsu said would put the DPP in an awkward 
position. 
 
¶7. (C) Opposition leaders seized on the Beijing interviews to 
lash out at the DPP's mismanagement of relations with 
Washington, burnish their own nationalist credentials, and 
justify their recent opposition to action on the USD 18 
billion special procurement budget for U.S. defense articles. 
 Pan-Blue legislators placed a hold on the special budget 
bill in the LY pending a "satisfactory U.S. explanation for 
the Secretary's remarks," provoking a food fight with ruling 
party counterparts at a lunch-time committee meeting.  LY 
President Wang Jin-pyng told reporters on October 28 that the 
controversy had negatively impacted on the atmospherics for 
the special budget debate but said that this did not excuse 
Pan-Blue parties from fulfilling their commitment to start 
deliberations on the authorization portion of the bill before 
the November 11 recess.  However, DPP LY Defense Committee 
Convener Lee Wen-chung told AIT that the latest confrontation 
will make it virtually impossible for any serious 
deliberations on the special budget until after the December 
11 election.  Lee added that the controversy over the 
Secretary's interview would likely not be a factor in the 
 
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special budget's prospects after December 11. 
 
Lee Teng-hui Plays Both Sides 
----------------------------- 
 
¶8. (C) Former President Lee Teng-hui offered sharply 
divergent responses to the Secretary's interview, perhaps 
reflecting conflicting pressure from the TSU and his more 
realist advisors (Septel).  Lee's first reaction was to scold 
the Taiwan media for blowing the incident out of proportion, 
asserting that the Secretary's formulation on Taiwan's 
sovereignty was simply a recitation of the USG's 
long-standing position.  However, Lee later characterized 
Powell's comments as a reminder of Taiwan's current abnormal 
status.  While TSU candidates used the recent media attention 
to boost their campaign efforts, some moderate Lee associates 
also expressed satisfaction over the episode for very 
different reasons.  Lo Fu-chen, Chairman of the 
quasi-official Association of East Asian Relations and a 
long-time Lee confidante, told AIT that the Secretary's 
statement will serve as a useful reminder to Chen Shui-bian. 
"Chen gets too wrapped up in domestic political dynamics and 
forgets that as a leader he also needs to operate at the 
international level," Lo stated.  Lo said that he appreciates 
Washington's willingness to remain ambiguous about Taiwan's 
status, but added that "sometimes you need to inject some 
clarity to remind Chen about how important ambiguity is in 
the cross-Strait setting." 
 
Comment: Lessons Learned? 
------------------------- 
 
¶9. (C) It is still too early to say conclusively whether the 
Chen administration has learned the lesson that it must be 
more restrained in its public as well as private dealings 
with the United States.  The history of the last few years 
does not encourage optimism.  The Chen administration has 
clearly instructed its officials to send the message that it 
is business as usual.  This is likely aimed, at least in 
part, to prevent the TSU and Pan-Blue from scoring additional 
political points in the ongoing election campaign. 
 
¶10. (C) If there is a silver lining, it may be that the 
episode has created a renewed appreciation for how much 
influence Washington can wield over Taiwan's domestic 
political environment.  DPP SecGen Chang noted that President 
Bush's December 9, 2003 statement on Taiwan nearly destroyed 
Chen's hopes for re-election and expressed fear that the 
Secretary's October 24 remarks might do something similar in 
 
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the current LY campaign if not handled correctly.  In 
assuring Taiwan officials that U.S. policy has not changed, 
AIT has also used the opportunity to remind them about how 
important ambiguity regarding Taiwan's sovereign status is 
for both sides of the Taiwan Strait. 
PAAL