VZCZCXRO2789
RR RUEHCN RUEHGH RUEHVC
DE RUEHIN #0985/01 1220506
ZNY CCCCC ZZH
R 020506Z MAY 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 5101
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEKJCS/SECDEF WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000985 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS USTR 
STATE FOR EAP/TC 
COMMERCE FOR 3132/USFCS/OIO/EAP/WZARIT 
COMMERCE FOR 4431/ITA/MAC/AP/OPB/TAIWAN/MCHOI 
TREASURY FOR OASIA/LMOGHTADER 
USTR FOR STRATFORD, ALTBACH 
 
E.O. 12958: DECL: 05/01/2017 
TAGS: ECON PREL PGOV PINR EAIR CH TW
SUBJECT: MORE MAC PESSIMISM ON CROSS-STRAIT INITIATIVES 
 
REF: TAIPEI 930 
 
Classified By: AIT Director Stephen M. Young, Reason 1.4 b/d 
 
¶1. (C) Summary: In a May 1, 2007 meeting with AIT, 
Mainland Affairs Council (MAC) Chief Secretary Jan Jyh- 
horng expressed pessimism about the likelihood of cross- 
Strait agreements on charter flights and tourism during 
the remaining thirteen months of the Chen administration. 
He further told AIT that the appointment of Chen Ming- 
tong as the new MAC Chairman has had a negative impact on 
prospects for the two initiatives.  He also explained 
that Taiwan's principal objection to the Olympic torch 
route announcement by Beijing on April 26 was the 
nomenclature used for Taiwan rather than the path the 
torch would take.  Jan's comments suggest that either the 
Chen Shui-bian administration has given up hope on 
reaching agreement with China on charter flights and 
tourism, or that the appointment of Chen Ming-tong as MAC 
Chairman reflects a decision to signal a less cooperative 
approach to cross-Strait relations, or both.  End 
summary. 
 
Charter Flights and Tourism Agreements Unlikely 
--------------------------------------------- -- 
 
¶2. (C) MAC Chief Secretary Jan Jyh-horng told AIT on May 
1, 2007, that he sees little possibility in the short 
term for progress in cross-Strait discussions on weekend 
passenger and cargo charter flights and further opening 
of Taiwan to PRC tourists.  In AIT Director Young's 
meeting with MAC Chairman Chen Ming-tong a week earlier, 
Chen speculated that the two sides would need to reach 
agreement on these initiatives before late July. 
Otherwise, intensified campaigning in advance of 
legislative and presidential elections would likely 
preclude any cross-Strait agreement for the rest of 
President Chen Shui-bian's final term (reftel).  When 
asked about Chairman Chen's hypothetical late-July 
deadline, Jan said he was pessimistic that an agreement 
would be concluded before then. 
 
¶3. (C) Jan attributed his pessimism in part to the highly 
partisan political atmosphere in Taiwan in the run up to 
legislative and presidential elections in late 2007 and 
early 2008.  He noted that Taiwan President Chen Shui- 
bian and Premier Su Tseng-chang's harsh criticisms of the 
Kuomintang (KMT)-Chinese Communist Party (CCP) Economic 
Forum that concluded in Beijing on April 29 should be 
understood in the context of election politics.  The Chen 
administration's reaction to the previous two KMT-CCP 
forums, Jan pointed out, had been more restrained.  He 
explained that the administration's response had also 
been exacerbated by the perception that Beijing is using 
the new national association of Taiwan investors in China 
to generate political support for the KMT. 
 
¶4. (C) Jan also cast blame on Beijing for the failure to 
reach agreement on the charter and tourism initiatives. 
The statement at the KMT-CCP forum by Jia Qinglin, 
Chairman of the PRC Chinese People's Political 
Consultative Conference, that cross-Strait tourism is not 
an issue that should be handled "state to state," Jan 
explained, had deeply offended the Chen administration. 
Beijing, he continued, had earlier set similarly 
unrealistic preconditions that blocked conclusion of a 
tourism agreement.  During the fourth round of tourism 
consultations in Macao on January 27, 2007, he said, 
Beijing had surprised the Taiwan negotiators by 
presenting a draft text.  The document was to be signed 
by the civilian organizations assigned to lead the 
negotiations but omitted any mention of government 
authorization to enter into an agreement.  In addition, 
that text referred to Taiwan as "China Taiwan" (Zhongguo 
Taiwan), a name unacceptable to the Taiwan authorities. 
Jan explained that Taiwan insists the tourism agreement 
should be similar to the Taiwan-Hong Kong aviation 
agreement.  That document was signed by aviation industry 
organizations but specifically noted that they had been 
 
TAIPEI 00000985  002 OF 003 
 
 
authorized by their respective governments to enter into 
the agreement.  The January 27 meeting, he assessed, had 
marked a turning point in cross-Strait negotiations that 
has resulted in the current stalemate. 
 
New MAC Chairman a Setback 
-------------------------- 
 
¶5. (C) Jan Jyh-horng told AIT that he believes the 
appointment of Chen Ming-tong as the new MAC Chairman may 
have exacerbated the stalemate.  He noted that the "name 
rectification" campaign to remove "China" references from 
the names of official and state-owned entities and 
proposals for a new "second Republic of China" 
constitution had surprised Beijing and made it less 
willing to deal with the Chen administration.  The 
appointment of Chen Ming-tong, one of the drafters and a 
vocal proponent of the second republic constitution, as 
MAC Chairman had worsened the situation.  The PRC was 
unlikely to allow Chen Ming-tong to take credit for a 
cross-Strait agreement.  Jan noted that China had been 
unwilling to deal with the previous MAC Chairman, Joseph 
Wu, for the first two years of his tenure, 2004-2005.  It 
was only after the PRC authorities had time to see Wu in 
action and decided they could deal with him that they 
began to work more cooperatively with MAC, Jan observed. 
 
Olympic Torch - Nomenclature More Problematic Than Route 
--------------------------------------------- ----------- 
 
¶6. (C) When asked about Taiwan's rejection of the PRC's 
proposed route for the 2008 Olympic torch to pass through 
Taiwan, Jan explained that the Beijing Olympic Games 
Organizing Committee's use of the nomenclature "China 
Taipei" (Zhongguo Taibei) in all of its publications and 
website was more problematic for Taiwan authorities than 
the route of the torch.  Beijing, he explained, had 
consciously violated a 1989 agreement signed by the 
Chinese Olympic Committee and Taiwan's Chinese Taipei 
Olympic Committee by consistently referring to Taiwan as 
"China Taipei" instead of the agreed "Chinese Taipei" 
(Zhonghua Taibei).  Taiwan, he said, had repeatedly 
complained about this usage but to no avail.  On Friday, 
April 27, however, the night Taiwan rejected the PRC's 
Olympic torch proposal, the Beijing Olympic Committee's 
website replaced some (but not all) of the references to 
"China Taipei" with "Chinese Taipei," Jan noted.  He 
surmised this might indicate some flexibility on the part 
of Beijing regarding the torch and nomenclature issues. 
He believes China is eager to include Taiwan in the relay 
as a goodwill gesture to the people of Taiwan.  Although 
reluctant to speculate, Jan also said he believed the 
Taiwan authorities might accept Beijing's proposed route 
if it agrees to consistently use the "Chinese Taipei" 
nomenclature.  He stressed that Beijing would not go so 
far as to consider Taiwan's preferred route in which the 
torch would both enter and exit Taiwan from a third 
territory. 
 
No Cross-Strait Honeymoon After Election 
---------------------------------------- 
 
¶7. (C) Jan predicted a cool period in cross-Strait 
relations after next year's presidential elections 
regardless of which party wins.  Beijing, he said, has a 
fairly favorable opinion of Frank Hsieh, one of the DPP 
front-runners, but it will want to wait to see how he 
governs before moving forward with closer cross-Strait 
cooperation if Hsieh wins.  Noting Ma Ying-jeou's 
reputation as a strong opponent to communism, Jan 
similarly argued that China would want to see how Ma acts 
as President if he wins.  However, Jan believed that this 
period of observation imposed by Beijing would be shorter 
for a KMT President than a DPP one. 
 
KMT-CCP Forum Offers Little to Work With 
---------------------------------------- 
 
¶8. (C) Jan dismissed the possibility that Taiwan could 
 
TAIPEI 00000985  003 OF 003 
 
 
act on any of the announced proposals from the KMT-CCP 
Economic Forum in Beijing.  On China's offer to permit 
Taiwan firms to invest in wholly-owned shipping companies 
and to operate highways and ports in China, Jan argued 
that these measures would face stiff opposition from 
Chinese firms that see Taiwan investors as unwelcome 
competition.  Jan acknowledged that some in Taiwan 
believe China's offer to permit Chinese students to 
enroll in Taiwan universities might be the answer to 
excess capacity in Taiwan's higher education system.  But 
he argued that Chinese students would be reluctant to pay 
Taiwan university fees to enroll in some of Taiwan's less 
competitive schools, which suffer most from the shortfall 
of students. 
 
Comment - A New Course? 
----------------------- 
 
¶9. (C) Jan's pessimism on charter flight and tourism 
discussions suggests the Chen administration may have 
given up hope that an agreement with China is within 
reach.  In this light, the somewhat controversial 
appointment of Chen Ming-tong as MAC Chairman could be 
seen as a signal of Taiwan's unwillingness to compromise 
any further on these issues.  Jan's observations on 
Chen's appointment suggest that senior Taiwan officials 
must have known it would likely have a negative impact on 
cross-Strait relations and may even have made a decision 
to follow such a course. 
 
¶10. (C) As we entered Jan's office for the meeting, his 
walls were bare and his shelves emptied of his stacks of 
books and files.  The new Chairman, he explained, had 
decided to select his own Chief Secretary and Jan would 
move to a new as yet undetermined position.  Jan is a 
knowledgeable and politically objective MAC insider, who 
has been with the agency since it was established in 
¶1991.  While dissatisfaction with his sudden replacement 
may have colored Jan's characterization of Chen Ming- 
tong's appointment, his dismissal as Chief Secretary 
probably does not bode well for the Chairman's cross- 
Strait intentions.  Jan's replacement may, in fact, 
corroborate the above early indications that the Chen 
administration has chosen to take cross-Strait relations 
in a different direction during its final thirteen 
months. 
YOUNG