VZCZCXYZ0003
RR RUEHWEB

DE RUEHIN #1842/01 1511604
ZNR UUUUU ZZH
R 311604Z MAY 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0420
INFO RUEHBJ/AMEMBASSY BEIJING 5248
RUEHHK/AMCONSUL HONG KONG 6464

UNCLAS AIT TAIPEI 001842 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - ERIC BARBORIAK 
DEPARTMENT PASS AIT/WASHINGTON 
 
SIPDIS 
 
E.O. 12958: N/A 
 
 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: U.S.-TAIWAN RELATIONS 
 
 
¶1. Summary:  Taiwan's dailies gave significant news and editorial 
coverage May 27-30 to alleged involvement in the snowballing insider 
trading scandal by President Chen Shui-bian's son-in-law, who was 
detained last Thursday, and to the pan-Blue and pan-Green camps' 
reactions to these developments.  News coverage also focused on the 
KMT and DPP primaries for the year-end Taipei and Kaohsiung mayoral 
races, the Indonesian earthquake Saturday, and a local train 
accident turned murder case.  The pro-status quo "China Times" 
reported May 28 on the results of its latest poll, which showed that 
President Chen's approval rating has dropped to a new low of 21 
percent; 65 percent of the public question his moral credibility, 
and nearly 60 percent believe Chen does not have the ability to 
govern the country. 
 
¶2.  The Chinese-language Taipei dailies all editorialized on Chen's 
son-in-law's case and the current predicament facing Chen and the 
DPP.  The English-language papers, however, commented on the recent 
visit by Deputy U.S. Trade Representative Karan Bhatia to Taiwan and 
the U.S.-Taiwan trade relationship.  An editorial in the 
limited-circulation, pro-independence, English-language "Taipei 
Times" urged Taiwan to try to sign Free Trade Agreements (FTAs) with 
allies in Central America, so that Taiwan businesses can make 
inroads into these countries and gain free access to the European 
and U.S. markets by utilizing their FTA networks.  The editorials in 
the limited-circulation, conservative, pro-unification, 
English-language "China Post" urged Chen to take Bhatia's advice 
with regard to cross-Strait trade policy and not to overlook the 
U.S. warning.  A separate "Taipei Times" editorial commented on the 
Pentagon's 2006 report on Chinese military power, saying the report 
"does not provide any dramatic new insights, but it does remind the 
wavering reader that the Chinese military is more ambitious, more 
skilled, better armed, is deadly serious in its intention and is 
preparing to strike Taiwan when the time is right."  End summary. 
 
A) "Looking Beyond the US for Trade" 
 
The pro-independence, English-language "Taipei Times" [circulation: 
30,000] editorialized (5/29): 
 
"Deputy US Trade Representative Karan Bhatia's remarks on Friday 
that it was not the right time to initiate free-trade talks between 
Washington and Taipei were not unexpected.  It's not the first time 
the US government has said so.  The message from Bhatia also did not 
appear to catch the government off guard, because the two 
governments have different strategies in terms of their pursuit of 
bilateral free-trade agreements (FTAs). ... 
 
"Taiwan, as the US' eight-largest trading partner, ranks higher than 
many countries with which the US has concluded such agreements - 
such as Chile, Jordan, Morocco and several countries in the Central 
America.  As such, Taiwan believes it deserves a higher priority for 
a trade pact.  It appears that President Chen Shui-bian's government 
sees a potential Taiwan-US FTA as serving as a model for other 
countries to follow suit -helping to prevent China from excluding 
Taiwan from regional economic blocs while encouraging Beijing to 
engage Taiwan in dialogue on cross-strait trade.  The US, on the 
other hand, focuses its FTA talks mainly on geopolitical 
considerations. ... 
 
"Nevertheless, while the need for bilateral free-trade talks is 
increasingly recognized by countries all over the world, Taiwan does 
differ from the US not just at the business level but at the 
strategic level.  The question for Taiwan is whether the government 
can outgrow the previous trade policy, which blindly follows the US. 
 While the need to seek a FTA with the US still exists, the 
government should rethink its FTA targets.  It should continue to 
seek FTAs with allies in Central American and try to overcome the 
China factor by pushing forward free-trade consultations with 
countries such as Singapore, Chile and Mexico. ...  If Taiwan can 
conclude agreements with these nations, Taiwanese businesses will be 
able to make inroads into these countries and gain free access to 
the European and US markets by utilizing their FTA networks." 
 
B) "Chen Neglects U.S. Warnings" 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] wrote in an editorial (5/30): 
 
"Last week, the U.S. issued two unprecedented blunt warnings against 
President Chen Shui-bian and his government, but they were 
overshadowed by sensational stories of corruption scandals 
surrounding the president's family and his close aides as well as 
the mysterious train accident turned murder case.  Representatives 
of Taiwan's mentor and protector came here to openly voice U.S. 
displeasure with the Chen administration's mainland policy, pursuit 
of independence and its constitutional reform plan.  But not many 
people paid attention to them. 
 
"Over the past week, both the print and the electronic media devoted 
most of their space and time to the two sensational domestic stories 
that the official visit of U.S. Deputy Trade Representative Karan K. 
Bhatia was scantily reported.  The same was with that of Alan 
Romberg, dubbed a 'true voice of Washington's Asia policy circle,' 
who was the State Department's deputy spokesman under the Reagan 
administration and principal deputy director of Policy Planning 
Staff under Clinton. ... 
 
"To challenge the U.S. 'one China' policy is to undermine Taiwan's 
close relationship with America.  But Chen is too preoccupied with 
salvaging his scandal-plagued presidency to heed warnings of 
Taiwan's closest ally." 
 
C) "For Once, Let's Take America's Advice" 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (5/28): 
 
"... Ambassador Karan K. Bhatia, Deputy U.S. Trade Representative 
responsible for Asia-Pacific affairs, openly called on President 
Chen's administration to reverse its policy of discouraging trade 
and investment between Taiwan and the mainland. ...  While we don't 
have any problem with Ambassador Bhatia's message, it was a bit 
surprising that he publicly challenged President Chen's policies 
during the visit.  This was surely a major blow to President Chen's 
administration following a series of embarrassing spats with our 
most important ally over cross-strait policy. ... 
 
"It seems that despite all of the warnings President Chen has 
received on this issue, he remains determined to persuade Washington 
to go along with his plans to erect more barriers to cross strait 
economic interaction. ... Frankly, it is long overdue for President 
Chen to listen to the advice we have received from our American 
friends for many years.  If we continue ignoring the opinions of our 
strongest ally in the world, it is likely that someday soon our 
friends in Washington will grow tired of waiting for us to make up 
our minds. ..." 
 
D) "US Defense Paper Misses One Target" 
 
The pro-independence, English-language "Taipei Times" [circulation: 
30,000] commented in an editorial (5/27): 
 
"One of the more intriguing sections of 'Military Power of the 
People's Republic of China 2006,' this year's US Department of 
Defense report to Congress, refers to the increasing use by China's 
military of ancient warfare and strategic texts such as Sun Zi and 
Sun Bin.  In particular, the study and implementation of 'strategic 
deception' has become entrenched in the Chinese military, the report 
says.  Then, in the next paragraph, the report expresses concern at 
the lack of transparency in Chinese military affairs: 'China takes a 
selective approach to transparency restricted to secondary areas of 
military activity such as military exchanges, joint exercises, and 
confidence-building measures involving visits to previously secret 
facilities.'  Which is just a polite way of saying that the Chinese 
can't be trusted, and that the slogan 'peaceful rise' is little more 
than public relations pap.  Reinforcing this is the report's 
skepticism that China's 'no first use' policy for nuclear weapons 
will continue unamended as its nuclear arsenal expands. ... 
 
"The report's discussion of cross-strait tensions offers up the 
chestnut that there exists a 'status quo' to be disrupted, even as 
it contends that the flowering of missiles along the Chinese coast 
constitutes only a threat to and not destroyer of this 'status quo.' 
 Even at the Pentagon, how remarkable it is that the bar for China 
to wound the 'status quo' is set so high - and how low the bar is 
set for Taiwanese leaders.  The Chinese can walk under it; the 
Taiwanese regularly trip over it. ... 
 
Disappointedly, though, the report makes no mention of the Taiwanese 
domestic angle in China's 'defense' affairs.  Taiwan is presented as 
more or less monolithic, united but slothful, 'modest' in its 
commitment to defense.  There is a certain amount of tiptoeing going 
on here, which is not unexpected. ... 
 
"Overall, the 2006 report does not provide any dramatic new 
insights, but it does remind the wavering reader that the Chinese 
military is more ambitious, more skilled, better armed, is deadly 
serious in its intention and is preparing to strike Taiwan when the 
time is right." 
 
KEEGAN