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

UNCLAS SECTION 01 OF 02 TAIPEI 003343 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/RSP/TC, EAP/PA, EAP/PD - 
ROBERT PALLADINO 
DEPARTMENT PASS AIT/WASHINGTON 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: SIX PARTY TALKS, U.S. ARMS 
PROCUREMENT 
 
¶1. Summary:  The water shortage in Taoyuan, which has 
now turned into a political issue, was the front-page 
headline story in most major Chinese-language Taipei 
dailies August 11.  The pro-independence "Liberty 
Times," Taiwan's biggest daily, on the other hand, ran 
a banner headline on its page four that read: "[The 
Executive Yuan] will push for the passage of the [U.S.] 
arms procurement bill by including it in the 
[government's] special budget."  The sub-headline 
added: "Premier Hsieh and President Chen have 
communicated [over the bill, saying that] as long as an 
interim legislative session is held, the bill will 
still be reviewed in the form of a special budget. 
[The proposal to] list [the funding of] the bill in the 
regular annual budget will be used as an alternative 
option." 
 
¶2. In terms of editorials and commentaries, an 
editorial and an op-ed piece in the limited- 
circulation, pro-independence, English-language "Taipei 
Times" both discussed the U.S. arms procurement bill, 
whereas a commentary in the pro-independence "Taiwan 
Daily" continued to discuss the Six Party Talks. 
Taiwan Think Tank International Affairs Director Lai I- 
chung, in the "Taiwan Daily" commentary, urged Taiwan 
to seize the opportunity to increase its bargaining 
chips in the region by engaging with Pyongyang.  The 
"Taipei Times" editorial suggested that President Chen 
do what some pan-Blue legislators have been calling on 
the administration to do with regard to the U.S. arms 
procurement bill, namely, to include the arms 
procurement in the government's annual defense budget. 
Taiwan Solidarity Union Chairman Su Chin-chiang, 
however, said in the "Taipei Times" that the best way 
to avoid an attack from China is for all the Taiwan 
people to demonstrate their resolve to protect the 
island.  End summary. 
 
¶1. Six Party Talks 
 
"Six Party Talks Will Push for a Strategic Reshuffle in 
Northeast Asia - Will Taiwan Become Another South 
Korea?" 
 
Lai I-chung, International Affairs Director of the 
Taiwan Think Tank, observed in the "International 
Spotlight" column of the pro-independence "Taiwan 
Daily" [circulation: 150,000] (8/11): 
 
". If we observe the interactions between the United 
States, Japan, China and North and South Koreas in the 
`Six Party Talks' and their possible development in the 
future, [we may see that] Taiwan needs not worry too 
much that Washington will sacrifice the island's 
interests since it needs China's assistance in 
resolving the nuclear situation on the Korean 
Peninsula.  In the meantime, [we may also note that] 
the strategic competition between the `U.S.-Japan 
alliance' and China will only intensify, and China as 
well as the two Korea's clashes with the United States 
and Japan in the diplomatic aspect in the Asia-Pacific 
region may likely expand.  But Taiwan must not feel 
happy secretly about the intensifying competition 
between Washington, Tokyo and Beijing and thought that 
the island will not become expendable.  If it does so, 
it will mean that Taiwan is merely waiting passively to 
see how the situation will develop and will thus fail 
to seize this opportunity to create proactively a 
strategic turning point that is favorable for itself. 
 
"What Taiwan needs to help is not to maintain a 
situation where Washington and Tokyo will work together 
to fight against China.  Instead, Taiwan needs to help 
and create a strategic balance in the region in which 
sea nations such as the United States and Japan can get 
the upper hand.  With regard to Pyongyang's possession 
of the nuclear weapons, since it is an easy matter to 
resolve, [Taiwan] at least should prevent China from 
using the nuclear issue to increase its influence. 
Taiwan also hopes that Seoul could restore a relatively 
balanced relationship with Washington, Japan and 
Beijing and modify the current situation of `pro-China, 
anti-Japan, and keeping a distance with the United 
States.'  This objective may be reached through 
flexible and mature engagement between Taiwan and North 
Korea. 
 
"If Taiwan can convince Washington and Tokyo, its 
interaction with North Korea can then actually make 
China realize that it cannot single-handedly control 
North Korea.  For Seoul, North Korea's engagement with 
Taiwan will also cause it to adjust its previous pro- 
China practice and increase its interaction with Taiwan 
so as to gain more control over the future development 
of North Korea's nuclear program.  As a result, Seoul 
will have more bargaining chips than China over the 
nuclear situation on the Korean Peninsula. 
 
"For Pyongyang, its interaction with Taiwan will in 
fact increase its bargaining capabilities with China, 
so naturally it will be happy to do so.  For Tokyo and 
Washington, Taiwan's interaction with, and possible 
financial aid to, North Korea can not only help the two 
countries retain their [original] position when 
negotiating with [Pyongyang] but may also alter 
Beijing's and Seoul's ways in handling the nuclear 
issue on the Korean peninsula and their attitude toward 
Washington and Tokyo. ." 
 
¶2. U.S. Arms Procurement 
 
A) "Call the Pan-Blue's Bluff" 
 
The pro-independence, English-language "Taipei Times" 
[circulation: 30,000] editorialized (8/11): 
 
"It's time for President Chen Shui-bian to accept 
reality.  The special arms procurement budget will 
never pass - at least, not in anything like its current 
form.  It's time to give up on the special budget 
tactic, which has left the pan-greens looking 
ineffectual and incompetent. . 
 
"The key is to do exactly what some pan-blue 
legislators have been calling on the administration to 
do for several months: Include the procurement of the 
items in the annual defense budget. . 
 
"So Chen should agree to this demand.  The math is 
quite simple.  The proposed special arms budget, as it 
stands now, would require the government to spend 
NT$480 billion (US$15 billion) over 15 years to 
purchase three major weapons systems from the US.  This 
translates to a little over US$1 billion a year to 
purchase eight diesel-electric submarines, three PAC-3 
Patriot anti-missile batteries and 12 P-3C Orion 
maritime patrol aircraft. 
 
"Taiwan has budgeted about US$8 billion to spend on 
defense for Fiscal 2005.  If the annual defense budget 
were increased to 3 percent of GDP - about US$9.3 
billion - this would mean that the Ministry of National 
Defense would have an added US$1.3 billion to spend on 
shiny new toys.  Over 15 years, the added amount would 
total a whopping US$19.5 billion - US$4.5 billion in 
excess of the amount requested for the special arms 
procurement budget. ." 
 
B) "Taiwan Has to Bolster Its Defense and Resolve" 
 
Taiwan Solidarity Union Chairman Shu Chin-chiang noted 
in an op-ed piece in the pro-independence "Taipei 
Times" [circulation: 30,000] (8/11): 
 
". In the face of the ever-increasing military threat 
from China, the pro-Beijing parties are holding up the 
passage of the budget which will enable Taiwan to buy 
US weapons.  This is little short of encouraging China 
to invade Taiwan, and then to expand into the Asia- 
Pacific region.  The repercussions of all this are very 
worrying indeed. 
 
"Given the threat that exists from China, Taiwan should 
form an Asia-Pacific security community with the US and 
Japan to deal with Beijing's military rise.  Without 
strength there is no peace, but Taiwan should neither 
engage in a senseless mutual escalation with China, nor 
tie the question of security within the Taiwan Strait 
to whether or not China will invade Taiwan. 
 
"The best way to avoid and prevent an attack from China 
is for the entire population of Taiwan to demonstrate 
the resolve and willingness to protect their homeland. 
This is what is meant by the terms `civilian-based 
defense' and `psychological defense.'" 
 
PAAL