VZCZCXYZ0003
RR RUEHWEB

DE RUEHIN #1156/01 1430853
ZNR UUUUU ZZH
R 230853Z MAY 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 5357
INFO RUEHBJ/AMEMBASSY BEIJING 6817
RUEHHK/AMCONSUL HONG KONG 8073

UNCLAS AIT TAIPEI 001156 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - LLOYD NEIGHBORS 
DEPARTMENT PASS AIT/WASHINGTON 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: U.S. ON CROSS-STRAIT TRADE RELATIONS 
 
 
Summary:  Taiwan's major Chinese-language dailies continued to focus 
news coverage May 23 on the dispute between the central government 
and the Taipei city government over the renaming of the Chiang 
Kai-shek Memorial Hall; on the issues to be discussed during the 
current Legislative Yuan session; on the year-end legislative 
elections; and on other local issues.  In terms of editorials and 
commentaries, as a follow-up on Tuesday's news analysis, the 
pro-independence "Liberty Times" editorialized on AIT Taipei 
Director Stephen Young's call for further opening of the economic 
relations across the Taiwan Strait at a speech to Taiwan's Chinese 
National Association of Industry and Commerce Monday.  The article 
explained in detail why, in their opinion, Taiwan must not further 
open its economic relations with China and urged Washington to look 
at cross-Strait relations from a strategic perspective rather than 
focusing on trade and economics alone.  End summary. 
 
"When Looking at Cross-Strait Relations, the United States Should 
Not Just Focus on Trade and Economics and Thus Overlook the 
Strategic Perspective" 
 
The pro-independence "Liberty Times" [circulation: 500,000] 
editorialized (5/23): 
 
"AIT Taipei Director Stephen Young said during a speech at the 
annual assembly of Taiwan's Chinese National Association of Industry 
and Commerce (CNAIC) Monday that a critical way to improve the 
U.S.-Taiwan trade partnership is for Taiwan further to open its 
economic relationship with China.  He noted that Taiwan firms should 
observe high standards of environmental protection and labor rights 
in China.  This can help speed the development of a modern China 
that is a constructive partner for both the United States and 
Taiwan, he added.  The fact that Director Young spoke in front of 
the president of the host country using the language of the host 
country clearly indicated that he intended to convey a certain 
message. 
 
"One can still recall Director Young's press conference at the end 
of last year, in which he requested that Taiwan pass the arms 
procurements budget as early as possible.  During his press 
conference on May 3, Young addressed again that China has 
continuously deployed many missiles over the past decade, posing a 
serious threat to Taiwan.  Director Young also expressed confusion 
over Taiwan's failure to pass the long-stalled national defense 
budget, including the part earmarked for the PAC-III missiles. 
Young's overtones showed that he is clearly aware of China's threats 
against Taiwan.  While no signs showed that China's threats would be 
possibly reduced, [the United States] still requested that Taiwan 
further open its economic relations with China.  Isn't this 
something similar to 'damn the torpedoes, full speed ahead?' [lit. 
'clearly knowing there are tigers in the mountain but going up the 
tigers' mountain anyway'] ... 
 
"Perhaps Director Young is unaware that in Taiwan, the so-called 
'further opening of economic relations with China' is exactly the 
excuse used by those pan-Blue, pro-China people to boycott the 
national defense budget!  According to these people's theory, peace 
across the Taiwan Strait will become possible as long as Taiwan 
expands trade and economic relations with China, removes its ceiling 
on investment [in China], and open the three links; and such a 
policy option, as a result, will render the national defense budget 
unnecessary.  We can thus imagine that Director Young's 'opening 
theory' will be quoted by these people [as an excuse] to impose 
pressure on the government to liberalize its policy on investment in 
China and thereby to oppose all the defense-related budgets.  This 
is perhaps not a result that Director Young will be happy to see, is 
it? 
 
"As in the case of the United States and other countries, Taiwan's 
external trade and economic policies, particularly those toward 
China, are part of the nation's policies as a whole.  Taiwan cannot 
proactively liberalize itself and move westbound [i.e., toward 
China] blindly, at least not before China's threats are removed, or 
there will be serious consequences in terms of the island's economic 
security, national security, and even national identity.  Director 
Young has repeatedly urged our country's Legislative Yuan to pass 
the arms procurements budget, and this indicates that he is fully 
aware that there are not simply trade and economics in the 
relationship between Taiwan and China.  Perhaps Director Young is 
also facing pressure from the U.S. business sector, but it might not 
serve the United States' interests as a whole if one simply focuses 
on trade and economics while overlooking the strategic perspective! 
Just as Director Young said, the United States is not only Taiwan's 
best but also the only security partner.  It is because of this that 
Taiwan, in addition to working in line strategically with the 
U.S.-Japan security system, also hopes to sign a free trade 
agreement (FTA) with the United States, in an attempt to avoid 
China's economic magnetization and to strengthen Taiwan's economic 
security.  It is a pity, however, that for many years the United 
States has been unwilling to sign an FTA with Taiwan.  Instead, it 
 
offered most-favored-nation treatment to China, while Taiwan is 
constantly facing pressure from the United States, demanding that 
the island keep on liberalizing its [policy toward] investment in 
China.  It may well be asked:  How would the Taiwan people possibly 
find a job and how would they survive if Taiwan's industries were 
hollowed out because of the westbound [policy]? 
 
"Moreover, when it comes to 'helping speed the development of a 
modern China,' China's economy has been developing rapidly over the 
past few years, given the boost of international capital, including 
Taiwan's.  But China did not use these resources to improve its 
people's lives and undergo democratic reforms.  Instead, it has been 
expanding its military buildup in plain sight and, to name just one 
[of its moves], it has deployed around one thousand missiles 
targeting Taiwan.  China's national defense budget leaps at a 
two-digit speed each year, rendering it capable of invading Japan's 
territory, stalking the USS Kitty Hawk carrier battle group and 
test-firing missiles to destroy the satellites in a short period of 
time.  This is definitely not the kind of modernization that 
Director Young expects, rather [it is a] dangerous military 
modernization, and Taiwan is the one that bears the brunt of China's 
military expansion! 
 
"The way that China applies the economic united-front [tactics] on 
Taiwan [shows that] what Beijing covets is to annex Taiwan; by no 
means can it become a constructive partner to Taiwan.  In this 
context, Taiwan must do all it can to safeguard the status of its 
independent sovereignty.  It is also based on such consideration 
that Taiwan had better not open itself proactively to China without 
limitations.  Since the United States views Taiwan as its security 
partner, it can surely understand that Taiwan's economic and trade 
policy toward China must be in concert with its policies as a whole, 
which are aimed at maintaining the status of Taiwan's independent 
sovereignty.  Let's just imagine:  Taiwan has to confront China's 
military threats, economic united-front tactics, and diplomatic 
containment against this island on the one hand -- moves that are 
all aimed at eradicating Taiwan's sovereignty -- while it has to 
withstand the United States' requests that the island further open 
its economic relations with China and while Taiwan's space is 
constantly squeezed by China's manipulation.  [In this context,] 
isn't it the case that Taiwan is offered no option but to pick the 
road of 'ultimate unification [with China]'?  Everyone knows that 
Director Young is a friend of Taiwan.  He would do well to 
contemplate this situation for Taiwan." 
 
YOUNG