VZCZCXRO0057
RR RUEHCN
DE RUEHIN #1158/01 0930847
ZNY CCCCC ZZH
R 030847Z APR 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 9505
INFO RUEHBJ/AMEMBASSY BEIJING 5012
RUEHCN/AMCONSUL CHENGDU 1156
RUEHGZ/AMCONSUL GUANGZHOU 9184
RUEHHK/AMCONSUL HONG KONG 6203
RUESLE/AMCONSUL SHANGHAI 8574
RUEHSH/AMCONSUL SHENYANG 5105
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001158 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/TC 
 
E.O. 12958: DECL: 03/30/2016 
TAGS: EAIR PREL ECON CH TW
SUBJECT: CROSS-STRAIT CHARTER FLIGHT DISCUSSIONS PLANNED 
FOR APRIL 
 
REF: A. TAIPEI 418 
 
     ¶B. TAIPEI 1139 
 
Classified By: AIT Deputy Director David J. Keegan, Reason 1.4 d 
 
Summary 
------- 
 
¶1. (C) On March 28, Taipei Airline Association (TAA) 
Chairman Tony C.C. Fan told AIT/T that most technical 
issues required to expand cross-Strait charter flights are 
nearly resolved.  At that time, Fan was waiting for a 
response from his counterpart in the PRC to a proposal that 
the two meet to resume discussions on cross-Strait 
passenger and cargo charter flights.  On March 31, Fan 
informed us that his PRC counterpart had agreed to meet for 
informal discussions sometime between April 10 and 15. 
Taiwan has linked weekend passenger and cargo charter 
flights to progress in cross-Strait tourism discussions, 
which face sensitive nomenclature issues.  In the meantime, 
Taiwan has proposed humanitarian and special one-time cargo 
charters as an interim step.  Fan also offered his insights 
on the relatively small circle of Taiwan officials involved 
in decision making on charter flights.  Mainland Affairs 
Council Chairman Joseph Wu told AIT/T March 30 (ref B) that 
a charter flight meeting would take place in July. 
Although Fan's information differs from Wu's, it is clear 
that the prospects are good for progress in the near term 
on charter flights.  End summary. 
 
Mid-April Meeting 
----------------- 
 
¶2. (C) TAA Chairman Tony C.C. Fan told AIT/T on March 28 
there had been no significant progress on charter flight 
discussions since the Lunar New Year charters were 
announced in November 2005.  Fan said that that he was 
waiting for a response from his counterpart in the PRC to a 
proposal that the two meet to resume discussions of cross- 
Strait weekend passenger and cargo charter flights. 
According to Fan, he called his PRC counterpart, Director 
Pu Zhaozhou of the Office of Taiwan, Hong Kong and Macau 
Affairs at the Civil Aviation Administration of China 
(CAAC), on March 23 to suggest that the two meet to resume 
discussions.  The two have previously met informally and 
secretly in Macau. 
 
SIPDIS 
 
¶3.  Pu had been on an overseas trip and was scheduled to 
return to China on March 30.  On March 31, Fan informed 
AIT/T that Pu had agreed to meet in mid-April.  They had 
not yet confirmed a date, but planned to meet between April 
10 and 15.  Fan had previously speculated that such a 
response would be the first clear signal that the PRC is 
willing to move forward on cross-Strait charters since 
President Chen Shui-bian's announcement on February 27 that 
the National Unification Council and Guidelines had ceased 
to function and apply. 
 
Link to Tourism 
--------------- 
 
¶4. (C) During the March 28 meeting, Fan explained that 
weekend passenger and cargo charter flights have only a few 
more outstanding technical issues to be resolved.  The 
number of flights, routes, and cargo volumes have mostly 
been agreed, said Fan.  He speculated that the two sides 
would only require two more unofficial meetings to settle 
outstanding issues. 
 
¶5. (C) However, Fan believes that it will be impossible for 
the two sides to conclude a charter flight agreement before 
they reach agreement on further opening Taiwan to PRC 
tourists.  He said that Taiwan is unwilling to permit 
weekend passenger charters without further opening of 
tourism because the PRC would receive the economic benefits 
of Taiwan residents taking short trips to the Mainland 
without any reciprocal gain for Taiwan.  Fan argued that 
Taiwan genuinely wants to open to Mainland tourism but the 
PRC is reluctant to proceed.  The PRC, he explained, has 
refused to begin discussions with the Taiwan industry 
 
TAIPEI 00001158  002 OF 002 
 
 
organization identified by the Mainland Affairs Council 
(MAC) to lead negotiations on behalf of Taiwan because the 
Taiwan organization's Chinese name uses "the Republic of 
China" (zhonghua minguo).  Fan said that technical issues 
on tourism could be resolved within months, but noted that 
further delays would drag out discussions into the campaign 
season for Taipei and Kaohsiung mayoral elections, making 
further progress unlikely. 
 
Interim Proposal - Humanitarian and One-Time Cargo Charters 
--------------------------------------------- -------------- 
 
¶6. (C) Because of the difficulties facing tourism 
discussions, Fan reported that he had proposed to Pu that 
the two sides discuss humanitarian charters and special 
one-time cargo charters as an interim step.  Humanitarian 
charters would consist primarily of medical evacuations. 
As an example of a special one-time cargo charter, Fan 
cited the possibility that a semiconductor firm would 
charter a single cargo flight to move large pieces of 
manufacturing equipment from Taiwan to new facilities in 
the PRC. 
 
Not Many in the Loop 
-------------------- 
 
¶7. (C) Fan claimed that his communications with CAAC is the 
only semi-official channel between the PRC and Taiwan. 
According to Fan, decisions on charter flights are made by 
Presidents Chen Shui-bian and Hu Jintao, and only a few 
officials participate in the internal discussions on the 
issue.  Fan told us that he gets all of his instructions 
from MAC Economics Division Director Fu Don-cheng, who is 
in turn instructed by MAC Chairman Joseph Wu.  He said that 
even MAC Vice Chairman Michael Y.L. You is not fully 
informed of the most recent developments.  Fan commented 
that beyond MAC and the Presidential Office only Chiou I- 
jen and a few others in the National Security Council are 
involved in decision making on cross-Strait charter 
flights.  Ministry of Transportation and Communications 
officials learn about developments much later. 
 
Comment - Different Dates, Positive Prospects 
--------------------------------------------- 
 
¶8. (C) In ref B, MAC Chairman Joseph Wu told us that Taiwan 
and the PRC will hold discussions on charter flights and 
tourism in early July, which does not track with the 
information from Fan.  One possible explanation is that Wu 
referred to a final and public round of discussions at 
which an agreement would be signed.  Fan was clearly 
referring to another round of secret, informal discussions 
that would not immediately conclude an agreement.  Other 
possibilities include either Fan or Wu intentionally 
provided inaccurate information or one of them is not fully 
briefed on cross-Strait charter flight discussions. 
Regardless of why the two provided different dates, it is 
clear that Taiwan contacts involved in the charter flight 
discussions believe that there will be progress in the 
coming months.  End comment. 
YOUNG