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 04 TAIPEI 003563 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 10/10/2013 
TAGS: PREL PGOV MARR CH TW
SUBJECT: PRESIDENT OUTLINES FUTURE CROSS-STRAIT POLICY 
DIRECTION 
 
REF: TAIPEI 3521 
 
Classified By: AIT Acting Director David J. Keegan, Reason: 1.4 (B/D) 
 
¶1. (C) Summary: National Security Council (NSC) Secretary 
General Chiou I-jen provided the Acting Director on November 
10 an advanced copy of a 10-point policy statement President 
Chen Shui-bian planned to unveil later in the day.  The 
policy reiterates themes from Chen's May 20 and October 10 
speeches, providing slightly more clarity over Taipei's 
position on the "1992 Hong Kong" framework and opening of 
direct transportation links.  Chen will also call on his 
government to craft a set of "Sunshine Policies" to 
facilitate closer substantive relations with the Mainland. 
Chiou said the president wants to signal Beijing that 
dialogue could be resumed by either addressing "principle" 
issues first, hence the "1992 Hong Kong" formulation, or 
technical issues, such as direct links.  Chiou acknowledged 
that some of Chen's recent statements aimed at domestic 
constituencies may have been "misinterpreted" by Beijing as 
deviating from the course Chen set on May 20, but he asserted 
that this sort of suspicion underscores the need for 
effective channels of communication.  End Summary. 
 
Chen's 10 Points 
---------------- 
 
¶2. (C) NSC Secretary General Chiou I-jen asked the Acting 
Director for an urgent meeting on November 10 to preview a 10 
point cross-Strait/foreign policy plan that he predicted 
would be announced later in the day by President Chen 
Shui-bian (See para 8 for AIT's informal translation). 
According to Chiou, Chen wanted to demonstrate to Beijing and 
Washington that the conciliatory policy line he set on May 20 
is not only unchanged, but is being reinforced in substantive 
terms.  Chiou said that Taipei sees a window of opportunity 
after the December 11 Legislative Yuan (LY) election to 
restart some form of dialogue with Beijing.  The November 10 
address would aim to lay the policy groundwork to move 
forward.  Chiou noted that Chen would preside over 4 hours of 
meetings later in the day with his foreign policy team, and 
if there were no serious objections, the points he provided 
to AIT would be read out by the president in front of 
television cameras.  Chiou noted that he would follow-up with 
a press conference to provide further background on the 
policy initiatives. 
 
¶3. (C) Chiou highlighted several elements of the address for 
AIT.  Chiou said that in point number 3, the president would 
expand a bit on his "1992 Hong Kong basis" formulation first 
floated during Chen's October 10 National Day address.  Chen 
would acknowledge Beijing's insistence on the "one China 
principle" and ask Beijing to respect the Taiwan people's 
loyalties to the "Republic of China."  Chiou noted that in 
the following point, Chen would call for opening talks on 
direct transportation links using the "Taiwan-Hong Kong 
aviation talks" model referred to recently by the PRC State 
Council Taiwan Affairs Office (TAO).  Chiou asserted that the 
two points were meant to give Beijing an option.  If they 
want to address political principles first, Taiwan was 
willing to look back to the 1992 Hong Kong talks, which 
focused on bridging the political gap between the two sides. 
If the PRC preferred to start with less sensitive subjects, 
Chiou asserted that point number 4 offered Beijing the model 
of the 1993 Singapore talks, which established protocols for 
technical cooperation between the two sides. 
 
¶4. (C) In addition to calling for direct transportation 
links, Chiou said that Chen would order that Taiwan's 
State-Owned Enterprises (SOEs) expand their operations beyond 
Taiwan's borders.  Chiou said that following the president's 
address, the Mainland Affairs Council (MAC) and Ministry of 
Economic Affairs (MOEA) would be tasked with revising current 
restrictions on the operations of SOEs overseas, including on 
the Mainland (Comment: the points provided to AIT do not 
refer to SOE operations on the Mainland, but Chiou explicitly 
stated that the PRC would be part of the SOE globalization 
initiative.  End Comment.)  On the military side, Chiou said 
that Chen will announce that Taiwan will "absolutely not" 
procure weapons of mass destruction (WMDs) and call on China 
to openly renounce the use of WMDs against Taiwan.  He 
acknowledged that this commitment meant that there would be 
no plans for an attack on Shanghai.  Chiou noted that Chen 
will also call for talks on the establishment of an air and 
sea buffer zone between the two sides, and pledge to reduce 
the size of Taiwan's military to 100,000 personnel. 
 
Staying on Message 
------------------ 
 
¶5. (C) The Acting Director responded positively to Chen's 
renewed commitment to the constructive steps laid out in his 
inaugural and 10/10 speeches, but he re-emphasized the 
importance of consistency in Taipei's public messages.  Chiou 
acknowledged that President Chen's November 7 speech to the 
Taiwan Association of Professors (Reftel) may have caused 
concern in Beijing, but Chiou assured AIT that they did not 
represent a change in policy.  Chiou said that the president 
informed him after the fact that Chen was careful to use the 
term "People's Republic of China" rather than "China," as 
some media outlets reported, to describe the other side.  In 
addition, Chiou asserted that Chen did not say anything that 
contradicted his May 20 pledge not to address sovereignty 
issues in the upcoming round of constitutional reforms.  The 
Acting Director countered that the tone of the speech left 
considerable room for interpretation and could encourage 
skeptics in Beijing to question Chen's sincerity.  Chiou 
accepted that this may be the case, but added that if Taiwan 
could communicate with Beijing like it does with the United 
States, such "misinterpretations" could be avoided. 
 
¶6. (C) Later in the day, NSC Senior Advisor for cross-Strait 
affairs Chen Chung-hsin informed AIT that the 10 points had 
been accepted at the afternoon foreign policy meeting with 
only one or two small word changes.  Chen noted that Vice 
President Annette Lu urged that the point dealing with the 
"1992 Hong Kong" framework be removed, ostensibly because 
domestic reaction to president's October 10 reference to the 
formula was not positive enough.  Chen said that the 
president rejected Lu's demand, stating that the "1992 Hong 
Kong" framework was integral to the government's efforts to 
find a way forward.  However, the president did agree to Lu's 
demand to add "or develop" to the call for the PRC not to use 
nuclear weapons.  Chen asserted that he and others argued 
against the change, noting that it would make Taiwan look 
naive, but the president agreed to include the change "in 
order to shut her (Lu) up."  According to Chen, a pool camera 
filmed the president reading out the statement at about 6:00 
pm local time.  He expected the tape to be broadcast later in 
the evening.  Chen added that he had alerted his cross-Strait 
media and academic contacts to pay special attention to the 
initiative. 
 
Comment: Getting Back on Track 
------------------------------ 
 
¶7. (C) As promised (Reftel), Chen's moderate NSC advisors 
have redirected the president back to the conciliatory May 20 
line.  Chen's points should lay down a helpful marker on a 
number of issues, even if some of the military confidence 
building measures (CBMs) initiatives are seen as overly 
optimistic.  The larger problem remains consistency.  While 
Chiou offered assurances that the president has no intention 
on changing the substance of his May 20 policy line, he 
admitted that pressures from Chen's fundamentalist base will 
constrain the president's room to maneuver on the question of 
Taiwan's sovereignty.  Chen's plan to hit the campaign trail 
starting November 12 may test his ability to stay on message. 
 
¶8. (C) (Begin informal AIT translation of the president's 
draft policy statement) 
 
1) The maintenance of stability in the Taiwan Strait and the 
status quo of peace continues to be a matter of great concern 
to the international community and an area where the United 
States plays an important role.  Taiwan and the United States 
both have long enjoyed common values of freedom, democracy, 
and human rights.  Over the past half century, Taiwan's 
democratic and economic development has become an asset to be 
enjoyed by the international community.  It is certainly not 
a liability.  We thank the United States for its continued 
commitment to the "Taiwan Relations Act" and the "Six 
Assurances."  In the future, the two sides should continue to 
cooperate to maintain peace and stability in the Asia Pacific 
region on the basis of a common alliance of values. 
 
2) We believe the coming two years should be viewed as a 
unique opportunity to restart dialogue across the Taiwan 
Strait in the common pursuit of long-term peace and 
stability.  The two sides' governments and leaders should 
wisely use this "window of opportunity" to create a basis for 
peace and happiness.  While there are many factors that 
contribute to the other side's inability to respond to our 
goodwill and sincerity, our determination and patience will 
not change.  We would like to once again reiterate that the 
cross-Strait policy direction set out in the president's May 
20 Inaugural Address and this year's National Day Address 
will not change in any way during the (the president's) term 
of office.  On the basis of the "Two No Changes," government 
agencies should actively explore reopening dialogue, reducing 
tensions, and cooperatively developing "Sunshine Policies" to 
promote cross-Strait cooperation. 
 
3) We fully acknowledge (renzhidao) the Beijing authority's 
insistence on the "one China" principle.  At the same time, 
we urge the other side to positively view the reality of the 
"Republic of China's" existence and the democratic 
determination of Taiwan's 23 million people to be their own 
masters.  If the two sides can extend mutual understanding 
and tolerance, we can use peaceful dialogue to rationally 
discuss how to resolve our differences and eliminate 
confrontation.  The "1992 Hong Kong talks" embodied exactly 
this spirit. 
 
4) On the basis of the "1992 Hong Kong talks," the government 
is actively pursuing cross-Strait economic and cultural 
exchanges, including the Three Links.  At this stage, we can 
use the Taiwan-Hong Kong Aviation Talks model to immediately 
open consultations on direct two-way air cargo and Chinese 
New Year's charter flights. 
 
5) In order to fulfill the economic strategy of "promote 
development in Taiwan, reach out to the world," the 
government should take a cue from the private sector and 
encourage major State-Owned Enterprises (SOEs) to expand 
their international operations and investment.  They should 
also actively encourage foreign capital and labor talent to 
come to Taiwan in order to accelerate the globalization of 
our industrial base. 
 
6) The Ministry of National Defense has already completed a 
plan to reduce the term of compulsory military service to 18 
months starting July 1 next year with a target of cutting our 
military forces to 100,000 by the year 2008.  This effort 
will help ease cross-Strait military tensions, create a lean, 
more effective military force, and enhance our self-defense 
capabilities. 
 
7) For humanitarian reasons and in view of international 
norms, we believe that the use of nuclear, chemical, and 
biological weapons should be banned in the Taiwan Strait.  We 
are willing to publicly pledge that we will absolutely not 
develop these sorts of weapons of mass destruction and 
strongly urge China to publicly announce that it will not or 
develop or use weapons of mass destruction against Taiwan. 
 
8) In order to avoid miscalculations or unintended military 
clashes, we recommend that the two sides consider 
establishing a military buffer zone.  Aircraft and ships 
should avoid entering this zone, or if they do need to enter 
it, they should first notify the other side. 
 
9) We recommend that the two sides of the Taiwan Strait 
consider the approach used in the 1972 U.S.-Soviet "Maritime 
Incident Agreement" and the 1998 U.S.-China "Maritime 
Cooperation Agreement" to create a Taiwan Strait military and 
security consultative mechanism that can promote the eventual 
creation of a "Taiwan Strait Code of Conduct."  This effort 
would be similar to the international demilitarized zone 
created between South and North Korea and the communication 
mechanism between India and Pakistan. 
10) Security in the Taiwan Strait is more important than the 
interests of individual political parties or personalities. 
The development of peace across the Taiwan Strait is the 
common hope of all people.  We can only develop cross-Strait 
relations if Taiwan is united internally and stable 
politically.  After the year-end legislative election, we 
will invite representatives from various political parties 
and social groups to join the "Cross-Strait Peace and 
Development Committee."  We do not rule out inviting the 
leaders of the opposition parties to serve as members.  Our 
hope is to develop a consensus among all political parties 
and the public behind a long-term "Cross-Strait Peace and 
Development Platform" that will serve to actively promote 
cross-Strait peace and stability, and create a sustainable 
and prosperous new cross-Strait relationship. 
PAAL