VZCZCXYZ1522
RR RUEHWEB

DE RUEHGZA #0123 2581011
ZNR UUUUU ZZH ZUI RUEWCSE5951 2581022
R 151011Z SEP 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0000
INFO CHINA POSTS COLLECTIVE
ZEN/RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHEHNSC/NSC WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS GUANGZHOU 030123 
 
SIPDIS 
 
SENSITIVE 
 
 
SIPDIS 
 
STATE FOR EAP/CM, EAP/RSP/TC 
STATE PASS USTR STRATFORD 
USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON PINR TW CH
SUBJECT: YES, CHEN SHUI BIAN WILL STEP DOWN, XIAMEN UNIVERSITY TAIWAN 
EXPERTS SAY, BUT NOT UNTIL AFTER 2008 ELECTION 
 
REFERENCE: GUANGZHOU 11045 
 
(U) THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT 
ACCORDINGLY.  NOT FOR RELEASE OUTSIDE U.S. GOVERNMENT CHANNELS.  NOT 
FOR INTERNET PUBLICATION. 
 
¶1. (SBU) SUMMARY: DESPITE RUMORS OF RESIGNATIONS AND CONSTITUTIONAL 
SHENANIGANS, XIAMEN UNIVERSITY TAIWAN RESEARCH INSTITUTE ACADEMICS 
BELIEVE THAT THERE IS LITTLE LIKELIHOOD TAIWAN PRESIDENT CHEN SHUI-BIAN 
WILL STEP DOWN BEFORE HIS TERM IS UP.  THEIR FOCUS IS NOT ON THE SHORT- 
TERM OF DEMONSTRATIONS LED BY CHEN?S DPP BETE-NOIR SHI MING-TE OR 
CHEN?S OWN ATTEMPTS TO SHORE UP HIS BELEAGUERED POSITION, BUT ON POST- 
2008 TAIWAN.  THEY EXPECT TAIWAN RESIDENTS TO CAST THEIR VOTES FOR 
PRACTICAL REASONS THAT HAVE MOTIVATED VOTERS IN OTHER COUNTRIES: PARTY 
IDEOLOGY AND POLICY PROMISES. THEY ALSO BELIEVE THAT THE MAJOR PARTIES 
? DPP AND KMT - ARE EVENLY SPLIT PROVIDING AN OPPORTUNITY FOR A THIRD 
PARTY TO DETERMINE THE FINALLY OUTCOME. ONE SCHOLAR NOTED THAT THE 
CENTRAL GOVERNMENT IN BEIJING CONTINUES TO COMMUNICATE REGULARLY WITH 
THE TAIWAN RESEARCH INSTITUTE AND PAYS CLOSE ATTENTION TO EVEN THE 
FAINTEST WHISPER OF ANY MOVEMENT TOWARD TAIWAN INDEPENDENCE.  ON THE 
ECONOMIC SIDE, ACADEMICS SAY TAIWAN?S ECONOMY IS CONTINUING TO HOLLOW 
OUT AS TAIWAN INVESTMENT MIGRATES TO CHINA.  WHILE FUJIAN LEADERS SPEAK 
WELL OF THE BENEFIT OF THEIR PROVINCE?S RELATIONSHIP WITH TAIWAN ? AS 
DID MAYORS AND VICE MAYORS IN MEETINGS WITH THE CONSUL GENERAL THE WEEK 
OF SEPTEMBER 10 - THE ACADEMICS? VIEWED TAIWAN?S ECONOMIC REALITIES 
MORE CAUTIOUSLY, THOUGH THEY DID CITE SOME POTENTIALLY HELPFUL 
REGULATORY EFFORTS TO IMPROVE TRADE BETWEEN TAIWAN AND MAINLAND CHINA. 
END SUMMARY. 
 
ACADEMICS ANALYZE 2008 ELECTION LANDSCAPE 
----------------------------------------- 
 
¶2.  (SBU) THE CONSUL GENERAL AND CONGENOFFS MET WITH REPRESENTATIVES OF 
XIAMEN UNIVERSITY?S TAIWAN RESEARCH INSTITUTE, INCLUDING DIRECTOR LIU 
GUOSHEN ON SEPTEMBER 10 TO REVIEW THE LATEST DEVELOPMENTS IN CROSS- 
STRAITS TIES. THE OTHER GUESTS INCLUDED PROFESSOR CHEN KONGLI, 
ASSISTANT TO DIRECTOR LI PENG, CHIEF OF POLITICAL DEPARTMENT SUN YUN, 
DEPUTY CHIEF OF POLITICAL DEPARTMENT ZHANG WENSHENG, AND DEPUTY CHIEF 
OF ECONOMIC DEPARTMENT SHI ZHENGFANG. 
 
¶3.  (SBU) ACCORDING TO THE ACADEMICS, CHEN SHUI-BIAN IS UNLIKELY TO 
RESIGN, THOUGH THEY REFRAINED FROM SAYING RULING IT OUT ALTOGETHER.  IN 
FACT, THEY OFFERED THREE SCENARIOS IN WHICH HE WOULD HAVE NO 
ALTERNATIVE BUT TO STEP DOWN: 
-- IF HIS WIFE WERE CHARGED WITH FRAUD (ALTHOUGH THE COMPLEX PROCESS IN 
TAIWAN COULD DRAW OUT THIS PROCESS BEYOND 2008);, 
-- IF CHEN BELIEVED THE DEMOCRATIC PROGRESSIVE PARTY (DPP) WOULD BE 
HURT POLITICALLY WERE HE WERE TO STAY, OR 
-- IF SOCIAL TURMOIL OVER THE SCANDALS RELATING TO HIS SON-IN-LAW, HIS 
WIFE AND HIS OWN INVOLVEMENT IN THE SECRET DIPLOMATIC FUND MATTER TOOK 
AN UNEXPECTED AND DRAMATIC TURN. 
 
¶4.  (SBU) IN THE VIEW OF MOST OF THE PROFESSORS, THOSE WHOSE FAMILIES 
MIGRATED TO TAIWAN FROM THE MAINLAND AT THE END OF THE CIVIL WAR IN THE 
LATE 1940?S STRONGLY SUPPORT TAIPEI MAYOR AND KMT CANDIDATE MA YING- 
JEOU FOR PRESIDENT.  THE SCHOLARS TOOK NOTE OF THE EMPHASIS MA IS 
PLACING ON COURTING THE ETHNIC TAIWAN POPULATION. SEVERAL OF THE TRI 
ACADEMICS THOUGHT THAT MAINLANDERS AND TAIWANESE MIGHT HAVE QUESTIONS 
ABOUT MA?S GOVERNING ABILITY BECAUSE OF HIS LACK OF FOREIGN POLICY 
EXPERIENCE. 
 
¶5.  (SBU) TRI DIRECTOR LIU SAID THAT POLITICAL IDEOLOGY, PERSONALITY, 
COMPETENCE AND PUBLIC POLICY PROPOSALS WERE MORE IMPORTANT THAN WHETHER 
A CANDIDATE FOR PRESIDENT OR OTHER OFFICES IS FOREIGN-BORN (MA WAS BORN 
IN KOWLOON) OR HIS ORIGINS CAN BE TRACED BACK MANY GENERATIONS IN 
TAIWAN.  IN OTHER WORDS, A POLITICAL CAMPAIGN APPEALING TO THOSE WHO 
DID NOT WANT A MAINLANDER TO BE PRESIDENT WAS LIKELY TO FAIL. PARTY 
AFFILIATION IS TOO STRONG FOR THE NEXT ELECTION TO BE PLAYED OUT AS 
PART OF ANY MAINLANDER-TAIWAN DYNAMIC.  PROFESSOR CHEN KONGLI, A FORMER 
DIRECTOR OF THE INSTITUTE, DISAGREED WITH LIU, SAYING THAT MANY IN 
TAIWAN WOULD VOTE AGAINST A MAINLANDER SIMPLY BECAUSE HE WAS A WAI- 
SHENG REN (LITERALLY SOMEONE FROM OUTSIDE THE PROVINCE) AND THAT WOULD 
TURN THE ELECTION TOWARD THE DPP.  LIU NOTED THAT THE 2008 WOULD BE A 
TEST OF THE SOPHISTICATION OF THE TAIWAN POPULATION ? WHETHER THEY 
WOULD USE MORE REALISTIC CRITERIA IN CHOOSING THEIR LEADER OR BASE 
THEIR VOTE ON PARTY AFFILIATION OR PLACE OF HIS BIRTH. 
 
DARK HORSE COULD UPSET A TWO-PARTY RACE 
--------------------------------------- 
 
 
 
¶6.  (SBU) SINCE THERE WERE GROWING DISSATISFACTIONS OVER THE ACTIONS OF 
CANDIDATES IN THE DPP AND KMT CAMPS, THE SCHOLARS THOUGHT THAT A THIRD 
PARTY HAD GREAT POTENTIAL FOR DETERMINING THE OUTCOME OF THIS RACE. 
LIU GUO-SHEN SUGGESTED THAT THE CURRENT ANTI-CHEN SHUI-BIAN CAMPAIGN 
MIGHT PRODUCE A ?THIRD COLOR? TO GO ALONG WITH THE PAN-BLUE KMT AND THE 
PAN-GREEN DPP.  LIU OPINED THAT MANY WHO WOULD LIKE TO SEE THE END OF 
THE CHEN PRESIDENCY COULD END UP DISAPPOINTED WITH BOTH THE DPP AND MA 
YING-JEOU, AND MIGHT BE PERSUADED TO VOTE FOR A NEW ENTITY THAT WOULD 
CLEAN HOUSE. 
 
¶7.  (SBU) THE ACADEMICS TOOK NOTE OF DEBATES OVER WHETHER CHEN MIGHT 
TRY TO AMEND THE CONSTITUTION IN ORDER TO RETAIN HIS POWER.  HOWEVER, 
THEY ALL AGREED THAT CHEN WOULD NOT RISK THE POTENTIAL DAMAGE COULD 
HAVE ON TAIWAN?S RELATIONSHIP WITH THE UNITED STATES.  IN ANY CASE, HE 
LACKED PARLIAMENTARY SUPPORT FOR SUCH A MOVE.  IN ADDITION, IF CHEN 
ATTEMPTED TO AMEND THE CONSTITUTION UNILATERALLY AND WITHOUT 
PARLIAMENTARY SUPPORT, HIS ACTION WOULD BE CONSIDERED ?TREASONOUS? 
UNDER TAIWAN LAW AND THE MILITARY MIGHT TRY TO OUST HIM. 
 
CHEN?S CONCILIATORY ATTITUDE IS LIKELY AN ?ACT? 
--------------------------------------------- -- 
 
¶8.  (SBU) THE ACADEMICS ALSO CONTINUE TO BELIEVE THAT CHEN HAS A STRONG 
AGENDA THAT IS ESSENTIALLY PRO-INDEPENDENCE. THEY CLAMED HIS 
CONCILIATORY ATTITUDE TOWARDS BEIJING IS MERELY AN ?ACT.?  HOWEVER, AS 
MUCH AS THEY DOUBT CHEN?S OCCASIONAL WILLINGNESS TO HEW A MORE MODERATE 
LINE ON CROSS-STRAIT ISSUES, THEY HARBOR EVEN STRONGER RESERVATIONS 
ABOUT VICE-PRESIDENT LU HSIULIEN (ANNETTE LU), WHOM THEY CONSIDER EVEN 
MORE NATIONALIST. 
 
¶9.  (SBU) IN RESPONSE TO A QUESTION ABOUT RELATIONS WITH TAIWAN 
SCHOLARS WHO VISIT THE MAINLAND, THE ACADEMICS SAID THAT THEY WERE 
GENERALLY SURPRISED AT HOW INTERESTED THEIR VISITORS WERE IN ALL 
ASPECTS OF LIFE IN THE MAINLAND, WHICH LED THEM TO BELIEVE THAT A 
NUMBER OF TAIWAN ACADEMICS WERE INVOLVED IN INTELLIGENCE. (ACCORDING TO 
LIU, TAIWAN INTELLIGENCE AGENTS APPROACH INSTITUTE SCHOLARS UNDER 
ACADEMIC TITLES AND ASK THE LATTER ALL MANNER OF QUESTIONS ABOUT 
CURRENT EVENTS IN THE MAINLAND, TRYING, FOR EXAMPLE, TO GAIN 
INFORMATION ON LAND DISPUTES OR CORRUPTION.) 
 
TAIWAN ECONOMY FACING CHALLENGES 
--------------------------------- 
 
¶10.  (SBU) SEVERAL OF THE TRI ACADEMICS TOOK NOTE OF THE CONTINUING 
?HOLLOWING OUT? OF TAIWAN?S ECONOMY.  TAIWAN HAS HIGH COSTS, A SMALL 
MARKET, AND LIMITED NATURAL RESOURCES, WHICH HAS LED TAIWAN BUSINESS 
PEOPLE TO CONTINUE MOVING THEIR OPERATIONS ? SOMETIMES IN THEIR 
ENTIRETY - TO THE MAINLAND.  IN A DISCUSSION WITH THE CONSUL GENERAL ON 
SEPTEMBER 11, XIAMEN MAYOR ZHANG CHANGPING TOOK NOTE, WITH SOME PRIDE, 
ON HOW EXTENSIVE THE TAIWAN PRESENCE IN HIS CITY WAS - 60,000 TAIWAN 
CITIZENS NOW LIVE AND WORK IN XIAMEN, 20 BOATS TRAVEL DAILY FROM JINMEN 
TO XIANMEN, TAIWAN BUSINESSES SEE XIAMEN AS A PLACE OF OPPORTUNITY A 
TIME WHEN TAIWAN CAN NO LONGER SUPPORT LIGHT INDUSTRIAL GROWTH.  ZHANG 
SAID THAT CHINA?S PRESIDENT HU JINTAO?S POLICY OF ENCOURAGING DUTY-FREE 
IMPORTS OF TAIWANESE FRUIT WAS BENEFICIAL TO BOTH XIAMEN AND TAIWAN AND 
IT WAS INCUMBENT ON TAIWAN TO RELAX BARRIERS ON TRADE WITH THE MAINLAND 
 
¶11.  (SBU) SOME OF THE ACADEMICS NOTED POSITIVELY TAIWAN?S STRATEGY OF 
FOCUSING ON RETAINING KEY SERVICE JOBS, WHILE LETTING GO OF 
MANUFACTURING JOBS. THEY SAID TAIWAN WOULD BE ABLE TO MAINTAIN THE 
MACHINE TOOL INDUSTRY IF THE THREE LINKS WERE OPENED BETWEEN CHINA AND 
TAIWAN.  WITHOUT THE THREE LINKS, HOWEVER, THE INDUSTRY?S SURVIVAL IN 
TAIWAN WOULD BE IN DOUBT, AS CIRCUMSTANCES MIGHT FORCE IT TO MOVE TO 
THE MAINLAND. 
 
COMMENT 
------- 
 
¶12.  (SBU) WHILE THE TRI ACADEMICS EXPECT CHEN TO WEATHER THE CURRENT 
SCANDALS AND MISSTEPS THAT HAVE BESET HIS ADMINISTRATION, NONE WAS 
WILING TO VENTURE A GUESS ON THE OUTCOME OF THE 2008 ELECTIONS. 
CHINESE ACADEMICS ? AND GOVERNMENT OFFICIALS ? HAVE BEEN BURNED BEFORE 
FOR WISHING FOR AN ABC OUTCOME (?ANYBODY BUT CHEN?).  THEIR CAUTION IS 
UNDERSTANDABLE ? CHEN MAY BE DOWN AND HIS FUTURE IS SIMPLY AS A 
PLACEHOLDER PRESIDENT, BUT MA?S IS NOT ASSURED AND TWO YEARS IS A LONG 
TIME IN THE POLITICAL LIFE OF ANY CANDIDATE, ESPECIALLY ONE WHO AT 
TIMES, IN THE VIEWS OF THE SCHOLARS, HAS SEEMED AS CAUTIOUS AS MA YING- 
JEOU. 
 
 
 
 
GOLDBERG