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 000081 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - ERIC 
BARBORIAK 
DEPARTMENT PASS AIT/WASHINGTON 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: PRESIDENT CHEN SHUI-BIAN'S NEW 
YEAR'S DAY SPEECH 
 
¶1. Summary: The top front-page story for almost all Chinese- 
language Taiwan dailies January 10 was the sudden corporate 
resignations and Prosecutors Office indictment of two top 
United Microelectronics Corp (UMC) executives Monday 
resulting from alleged illegal investments in China. 
Another news story, but not running on front pages, was 
President Chen Shui-bian's warning about the potential risk 
for Taiwan posed by overly concentrating Taiwan investment 
into China, and his reiteration of the necessity of his 
"proactive management, effective opening" policy. Newspaper 
coverage also focused on PFP Chairman James Soong's 
intention to run in the year-end Taipei mayoral election. 
 
The pro-unification "United Daily News" ran an exclusive 
news story on its page four that was topped with the 
headline: "The United States Returned [President Chen's] New 
Year's Day Address Draft Three Times?  Presidential Office: 
[the Address] Was Delivered After Communication with the 
United States."  The sub-headline added: "The Presidential 
Office Says [the Speech] Was Not Completed All at Once.  The 
United States Once Had Doubts about [Chen's Proposed] 
Referendum on a New Constitution.  [Taiwan's] First-ever 
National Security Report Has Been Delayed [Because] the 
United States Reportedly Has Concerns about `Attack 
Behavior' [in the Report]." 
 
¶2. Several newspaper editorials focused on China's offer to 
send two pandas to Taiwan as a gift, while others continued 
to discuss President Chen's New Year's Day speech.  Hsiang 
Chun, a research fellow at the ROC Society for Strategic 
Studies, analyzed the Chen Shui-bian administration's 
manipulation of the cross-Strait situation following the 
2004 presidential elections with the direct conclusion that 
Chen's New Year's Day speech is so destructive that it has 
made TECRO Chief David Lee's communications with Washington 
a "mission impossible."  An editorial in the limited- 
circulation, conservative, pro-unification, English-language 
"China Post" criticized Chen's New Year's Day speech for 
disappointing Taiwan's business community while also 
angering both Beijing and Washington.  An editorial in the 
limited-circulation, pro-independence, English-language 
"Taipei Times," however, supported Chen's new cross-Strait 
economic policy (as advocated in his New Year's Day speech) 
and urged Chen to stick to it unbendingly.  End summary. 
 
A) "Why the United States Makes a Representation Against A- 
Bian's New Year's Day Address" 
 
Hsiang Chun, a research fellow at the ROC Society for 
Strategic Studies, said in an opinion piece in the mass- 
circulated "Apple Daily" (1/10): 
 
". Following the March 20 [presidential] elections in 2004, 
the Chen Shui-bian administration's manipulative approach 
toward the cross-Strait situation were obviously done for 
his party's selfish interests only: On the one hand, Chen 
told [the Taiwan people] in a loud voice `not to worry 
[about cross-Strait tension],' but on the other hand, he had 
[Vice President] Annette Lu refer to cross-Strait [ties] as 
a `quasi-war state.'  Likewise, Chen behaved in a way 
suggesting he was doing what Washington had requested that 
he do - namely, getting ready to resume dialogue with 
Beijing -- while in the meantime, he ordered [then Premier] 
Yu Shyi-kun to stand out front and publicly incite the 
United States to `fight against' mainland China.  [Taipei] 
also provoked Beijing by saying `If you attack Taipei and 
Kaohsiung, I will attack Shanghai.'  . From the fact that 
the local TV network, TVBS, was oppressed [by the Government 
Information Office] to President Chen's talking about 
[launching] `a referendum on [Taiwan's] new Constitution' in 
his New Year's Day address, all [facts] prove that Taiwan 
ought to be classified as `a nation that is not yet 
completely democratized.'  No wonder that [Beijing's] 
`People's Liberation Army Daily' emphasized again in a 
recent editorial that `[Beijing] should stick to [the 
objective of] preparing for military conflict [with Taiwan]; 
the preparation for military conflict is the top, most 
practical and most urgent strategic task for the People's 
Liberation Army.'  In light of this, one finds it not too 
difficult to understand why the destructive power of A- 
Bian's New Year Day's address has almost made [the job of 
TECRO Chief] David Lee a `mission impossible.'" 
 
B) "U.S. to Rebuke Chen Again" 
 
The conservative, pro-unification, English-language "China 
Post" [circulation: 30,000] editorialized (1/10): 
 
"Recent messages from Washington suggest that President Chen 
Shui-bian is raising eyebrows there on the watch list again. 
In his New Year's Day speech, the president revived his pro- 
independence agenda - to write a new Taiwan Constitution 
this year, put it for referendum the next and full 
implementation in 2008 when he term ends.  He also called 
for tighter control over Taiwan's investments in the 
mainland. 
 
"Before this, he had said the agenda was `wishful thinking'; 
he couldn't do it, even his predecessor couldn't do it.  The 
about face has angered not just Taiwan's business community, 
who want closer economic ties with the mainland, but Beijing 
and Washington; both dread changes in Taiwan's status quo. . 
 
"But while the U.S. suspects Chen is playing the same old 
China-bashing game for domestic consumption, it will exert 
pressure behind the scenes to rein in his pro-sovereignty 
fervor, if only to placate Beijing.  Chen approval rating 
has plunged to 12 percent.  Can he withstand a U.S. rebuke?" 
 
C) "Chen Is His Own Worst Enemy" 
 
The pro-independence, English-language "Taipei Times" 
[circulation: 20,000] noted in an editorial (1/10): 
 
"In the wake of President Chen Shui-bian's New Year's day 
speech, there has been much talk about his new cross-strait 
economic policy of `active management, effective opening.' 
The speech suggests that a Cabinet reshuffle will follow the 
Lunar New Year, as has almost become traditional. . 
 
"Based on past performance, Chen's new determination to 
better manage cross-strait economic ties prompts mixed 
feelings.  Chen will hopefully become a fearless and 
charismatic leader who is undaunted by setbacks and unafraid 
to admit mistakes, rather than a politician who only pursues 
short-term advantage and bows to pressure from financial 
groups and trade associations.  Such short-sighted behavior 
is exactly what has made DPP supporters lose faith in his 
promises. 
 
"Chen and his party must admit that the DPP has lost the 
ideals it once had as a local party under Chen's leadership. 
As a result of Chen's weakness, the public has also begun to 
let down their guard toward China's `united front' 
strategies and military ambitions, with some even espousing 
an absurd desire to unify with China.  What Taiwan needs is 
a determination to press on with reform and a more 
consistent implementation of policy.  In this effort, Chen 
has no greater enemy than himself." 
 
PAAL