VZCZCXYZ0008
RR RUEHWEB

DE RUEHIN #3061/01 2490847
ZNR UUUUU ZZH
R 060847Z SEP 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 1969
INFO RUEHBJ/AMEMBASSY BEIJING 5626
RUEHHK/AMCONSUL HONG KONG 6833

UNCLAS AIT TAIPEI 003061 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - DAVID FIRESTEIN 
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 major Chinese-language dailies gave 
significant coverage September 6 to a press conference hosted by 
President Chen Shui-bian in Palau Tuesday, in which he talked about 
former DPP Chairman Shih Ming-teh's campaign to oust him, the 
controversial special state affairs expense account, the SOGO 
Department Store gift certificates case, First Lady Wu Shu-chen's 
jewelry assets report, and his son-in-law's criminal case.  Both the 
pro-status quo "China Times" and pro-unification "United Daily News" 
carried similar front-page banner headlines saying that President 
Chen has for the first time publicly acknowledged that other 
people's invoices and receipts were used to claim reimbursement from 
the Presidential Office's state affairs fund, and that the First 
Family had "indirectly" accepted SOGO gift certificates from a 
person involving in the controversial battle over the SOGO 
Department Store ownership.  The pro-independence "Liberty Times," 
Taiwan's biggest daily, however, ran a banner headline on page three 
that read "Bian: Did Not Put State Affairs Fund into Personal 
Pockets." 
 
The "China Times" and the "United Daily News" also each carried on 
their inside pages the results of their separate surveys about Shih 
Ming-teh's campaign to oust President Chen.  The "China Times" poll 
showed that 43 percent of those polled support Shih's campaign, but 
only 8.3 percent believe it would succeed in bringing Chen down. 
The "United Daily News" survey reported that 44 percent of 
respondents said they support Shih's rally, while 76 percent believe 
Chen would not step down because of this campaign. 
 
¶2. The Chinese-language papers editorialized on Taiwan's economic 
situation and the role of prosecutors and auditors in the 
controversial state affairs fund case.  An editorial in the 
limited-circulation, pro-independence, English-language "Taipei 
Times" discussed KMT Chairman Ma Ying-jeou's leadership, saying that 
with the upcoming campaign to oust President Chen and the U.S. arms 
procurement bill to be reviewed in September, the next few weeks 
could prove to be a make-or-break period for Ma and his presidential 
aspirations.  An editorial in the limited-circulation, conservative, 
pro-unification, English-language "China Post," on the other hand, 
discussed the possible benefits for American businesses if a free 
trade agreement is signed between the U.S. and Taiwan.  End 
summary. 
 
A) "Arms Bill Is Ma's Next Test" 
 
The pro-independence, English-language "Taipei Times" [circulation: 
30,000] editorialized (9/6): 
 
"The next few weeks could prove to be a make or break period for 
Chinese Nationalist Party (KMT) Chairman Ma Ying-jeou and his 
presidential aspirations.  With former Democratic Progressive Party 
chairman Shih Ming-teh's anti-Chen sit-in revealing decision-making 
ineptitude caused by a conflict of interest and an overwhelming 
desire to please everyone, any more vacillating during the course of 
the protest could further expose the weakness of Ma's position.  An 
even sterner test of his leadership lies just around the corner when 
the new legislative session begins on Sept. 19 - passage of the long 
delayed special arms procurement bill. ... 
 
"Only a dramatic shift in posture by the KMT legislative caucus will 
secure the passage of the bill, and Ma, as party chairman, is the 
one charged with prompting this shift. ...  Indeed, concerns about 
US relations and his aim of winning the presidency in 2008 are 
probably the rationales behind the 'reasonable arms purchase' 
doctrine that Ma has preached over the last year.  To satisfy 
Taiwan's main ally and enhance his appeal to moderate voters that 
value close US ties, reject unification with China and would like 
Taiwan to maintain a defense capability, Ma needs to ensure the 
passage of the bill. ..." 
 
B) "FTA: What's in It for America?" 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (9/6): 
 
"A free trade agreement (FTA) with the United States is a much 
desired policy aim in Taiwan.  It would increase Taiwan's trade and 
bind the island more closely to the U.S., Taiwan's most important 
ally - even if formal links are lacking.  But what is in it for 
Americans?  This, after all, is what will carry weight with 
Washington. ...  Indeed, the U.S. exports more to Taiwan than to 
Australia, Chile, and Singapore, all of which now enjoy FTAs. 
Despite increasing economic links between Taiwan and China, the U.S. 
remains the largest investor in Taiwan, while the latter is a 
sizable investor in America. ... 
 
"Intellectual property is a headache in U.S. trade with Beijing.  An 
FTA also would provide an opportunity to better protect intellectual 
property, a significant boon to U.S. firms. ...  Unfortunately, 
opposition to free trade is rising in Washington, even among 
Republicans.  However, the benefits of moving ahead with a 
U.S.-Taiwan FTA are too great to ignore.  The issue is geopolitics 
as well as economics.  Since 'the great game' with China already has 
begun, Washington needs to use all the tools at its disposal to 
enhance its regional influence. ..." 
 
YOUNG