VZCZCXRO4457
RR RUEHGH
DE RUEHIN #1987/01 1610439
ZNR UUUUU ZZH
R 100439Z JUN 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0616
INFO RUEHBJ/AMEMBASSY BEIJING 5289
RUEHGH/AMCONSUL SHANGHAI 0190
RUEHHK/AMCONSUL HONG KONG 6509
RUEHGZ/AMCONSUL GUANGZHOU 9374
RUEHSH/AMCONSUL SHENYANG 5250

UNCLAS SECTION 01 OF 02 TAIPEI 001987 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS TO USTR 
DEPT FOR EAP/TC 
USTR FOR ERIC ALTBACH 
 
E.O. 12958: N/A 
TAGS: ETRD ECON CH TW
SUBJECT: TAIWAN EXPLAINS CROSS-STRAIT POLICY 
 
REF:  TAIPEI 1398 
 
Summary 
------- 
 
¶1. (U)  In a June 1 speech at National Chengchi University, Mainland 
Affairs Council (MAC) Chairman Joseph Wu said he expects regular 
cross-Strait charter flights and mainland tourist travel within five 
to six months.  He reiterated familiar complaints that China 
misunderstands Taiwan's democracy and also called for international 
attention to support maintenance of the military balance across the 
Straits.  End summary. 
 
Background of the Forum 
----------------------- 
 
¶2. (U)  On June 1, Mainland Affairs Council Chairman Joseph Wu 
(Jau-shieh) delivered a public speech entitled "Cross-Strait 
Relations and Taiwan's China Strategy" at National Chengchi 
University (NCCU).  An alumnus of NCCU, Wu served as Assistant 
Professor there after receiving his Ph.D. at Ohio State University. 
His speech attracted officials from the European Chamber of 
Commerce, Taipei (ECCT) and the Japan Interchange Association 
(Japan's trade representative office in Taipei) as well as AIT 
staff, in addition to an academic crowd. 
 
Close Cross-Strait Economic Ties 
-------------------------------- 
 
¶3. (U)  Wu said China is Taiwan's most important trading partner, 
noting that 37 percent of Taiwan's exports went to China (including 
Hong Kong) in 2005 and 27 percent of Taiwan's trade was engaged with 
China.  Since Taiwan began allowing tourist visits to China in 1987, 
Wu said more than 4.1 million trips have been made by Taiwan 
residents.  However, in this same period only some 173,000 Mainland 
Chinese came to Taiwan for business purposes, professional 
exchanges, or tourism, traveling to Taiwan through third areas, 
mostly Hong Kong.  He attributed the imbalance in travel to China's 
restrictions on professional exchanges imposed on PRC officials as 
well as its prohibition of tourist travel directly from China. 
 
Joint Announcement on Charters and Tourism 
------------------------------------------ 
 
¶4. (U)  Wu said he is optimistic that Taiwan and China could reach 
consensus on both cross-Strait charter flights and tourism in five 
to six months.  He projected that an agreement would boost the 
number of mainland tourists visiting Taiwan from the current average 
of 5,000-6,000 per month to 1,000 per day, which could boost 
Taiwan's GDP by USD 500-600 million. 
 
¶5. (SBU)  Consultations on cargo and passenger charter services 
continue, Wu stated, noting that the "Macao format" works well for 
cross-Strait discussions.  (Note: The "Macao format" refers to the 
civilian-led talks held in Macao to establish the cross-Strait 
Chinese New Year flights in 2005.  The Taiwan delegation to these 
talks was organized and led by representatives of Taiwan's civil 
aviation industry while officials from organizations such as 
Taiwan's Civil Aeronautics Administration participate as "advisors." 
 End Note.) 
 
Military Imbalance 
------------------ 
 
¶6. (U)  Wu said the latest MAC poll shows that 85 percent of 
Taiwan's residents prefer to maintain the status quo in cross-Strait 
relations, but do not rule out any type of cross-Strait connections. 
 Wu said it is the Taiwan government's responsibility to safeguard 
Taiwan's de facto independence.  He expressed concern about the 
cross-Strait military imbalance as well as China's suppression of 
Taiwan's international presence.  He stated that China's military 
expenses reached USD 100 billion in 2005, and the growth rate of 
military expenditures greatly exceeds China's GDP growth rate.  He 
said that not only Taiwan but also neighboring countries, especially 
Japan, worry about China's growing military might being concentrated 
on its northeastern coast.  Citing Taiwan Intelligence estimates, Wu 
said China has targeted Taiwan with 850-880 missiles, with the stock 
of missiles increasing by 10 each month.  He argued that the 
cross-Strait military balance must be maintained in order to secure 
peaceful cross-Strait ties. 
 
Misperceptions Keep Taiwan Apart From China 
------------------------------------------- 
 
 
TAIPEI 00001987  002 OF 002 
 
 
¶7. (U)  China's misperceptions of Taiwan's democracy and 
international presence hinders cross-Strait contacts, Wu maintained. 
 He noted that China criticized Taiwan's 1991-1992 parliamentary 
reforms and the 2000 peaceful transfer of power, when Chen Shui-bian 
won the presidential election and the DPP became the ruling party, 
as steps toward independence.  In addition to restricting Taiwan 
participation in WHO, Wu also noted the PRC boycotted several NGO 
events because of Taiwan participation and MAC officials' attendance 
at cross-Strait talks as consultants. 
 
Q's & A's 
--------- 
 
¶8. (U)  Direct Navigation:  Asked about opposition efforts to amend 
Articles 28-30 of the Act governing Relations between Peoples of the 
Taiwan Area and the Mainland Area (the Direct Navigation Act), Wu 
insisted that the Legislative Yuan (LY) is not a good place for 
policy debates, but is more of a place for politicians to show off. 
The direct link clause has become an issue which opposition parties 
use to highlight ruling party limitations.  Wu stressed that if 
China is willing to negotiate direct transport links with Taiwan 
then there is no need to discuss amending the direct navigation act. 
 Due to a series of clashes between ruling and opposition parties in 
the LY, most recently over the direct link clause, 50 percent of 
MAC's budget remains frozen, Wu lamented, noting that the Economic 
Sustainability and Development Forum planned for June 18 -19 might 
have to be delayed. 
 
¶9. (U)  A Japan Interchange Association (JIA) representative asked 
Wu about the "92 consensus."  Wu responded that the PRC's 
invitations to former Straits Exchange Foundation (SEF) Chairman 
C.F. Koo for the 1993 and 1998 Koo-Wang Talks did not contain any 
wording about a so-called "One China" principle or "92 consensus." 
 
 
¶10. (U)  Asked about former KMT Chairman Lien Chan's visits to 
China, Wu said many people believe that Lien's visits improved 
cross-Strait ties.  He emphasized that diplomacy is an official 
responsibility of the Taiwan authorities.  Nevertheless, Wu said 
that he was comfortable that prior to Lien's recent visit to the PRC 
in April 2006, KMT Policy Coordination Committee Director Tseng 
Yung-chuan had personally briefed MAC. 
 
 
¶11. (U)  According to the local press, Wu conveyed much of the same 
information in a presentation to Taishang (Taiwan business 
representatives doing business in Mainland China) the same day at a 
Dragon Boat Festival reception sponsored by the SEF. 
YOUNG