VZCZCXRO3480
RR RUEHCN RUEHGH RUEHVC
DE RUEHIN #1520 1860947
ZNR UUUUU ZZH
R 050947Z JUL 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 5889
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHUL/AMEMBASSY SEOUL 8762
RUEHKO/AMEMBASSY TOKYO 8913
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI

UNCLAS TAIPEI 001520 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/TC, EAP/EP 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV PINR TW
SUBJECT: DPP LEGISLATOR HONG CHI-CHANG SLATED TO BECOME NEW 
CHAIRMAN OF THE STRAITS EXCHANGE FOUNDATION 
 
 
¶1. (SBU) Summary.  Premier Chang Chun-hsiung has confirmed 
plans to appoint DPP legislator Hong Chi-chang as the new 
chairman of the Straits Exchange Foundations (SEF).  Hong has 
said his priorities will be to increase services for Taiwan 
investors on the mainland and to reestablish direct 
interaction with SEF's counterpart, the PRC Association for 
Relations Across the Taiwan Strait (ARATS).  Comment.  These 
goals will be difficult to accomplish, especially in an 
election year, since ARATS show little or no inclination to 
change its 8-year policy of boycotting SEF.  With SEF and 
ARATS both marginalized, the two sides have been negotiating 
cross-Strait economic issues through private associations. 
End Comment.  End Summary. 
 
NEW CHAIRMAN NAMED 
 
¶2. (U) On June 27, Premier Chang Chun-hsiung confirmed plans 
to appoint Hong Chi-chang, a Democratic Progressive Party 
(DPP) legislator and leading figure in the party's former New 
Tide faction, as Chairman of the Straits Exchange Foundation 
(SEF).  Hong will succeed Chang Chun-hsiung, who stepped down 
as SEF Chairman when he was appointed Premier in May 2007. 
The appointment will become effective after personnel 
procedures are completed and Hong's appointment is approved 
by the SEF Board.  Hong has said his first priority as SEF 
Chairman will be to propose constructive measures to improve 
services for Taiwan investors in the mainland.  In addition, 
he plans to focus on trying to reestablish functional 
relations with the SEF's mainland counterpart, the 
Association for Relations Across the Taiwan Straits (ARATS), 
which have been suspended for eight years. 
 
BIO NOTE 
 
¶3. (SBU) Hong Chi-chang, born August 23, 1951, is a 
professional psychiatrist as well as an influential DPP 
politician.  A founding member of the DPP and a legislator 
since 1989, he recently lost his primary bid to compete for 
another term. During the primary he came under Deep Green 
criticism for supporting increased opening of cross-Strait 
economic relations.  Hong graduated from the Department of 
Medical Science, Taipei Medical College, and earned Master's 
degrees in public health from National Taiwan University and 
the Graduate School of Medical Studies, Toronto University. 
In the mid-1980's he served as chief of the psychiatry 
department at MacKay Memorial Hospital in Taipei.  One of 
AIT's long-term contacts, Hong has focused in recent years on 
economic policy, especially the further opening of 
cross-Strait economic relations. 
 
COMMENT 
 
¶4. (SBU) Due to ARAT's suspension of most direct contact with 
SEF since 1999, SEF has not played a prominent role in 
cross-Strait relations in recent years.  For example, 
cross-Strait tourism and charter flight consultations are 
conducted through authorized private associations. China's 
Cross-Strait Travel Exchange Association interacts with 
Taiwan's Cross-Strait Tourist Exchange Association. 
Similarly, the Taiwan Airlines Association works with its 
counterpart, China's Civil Aviation Association, on charter 
flight issues.  On July 3, SEF Secretary General Michael You 
told us that Hong is well-respected on both sides of the 
Strait, suggesting he could have the clout to restart 
SEF-ARATS talks, however Hong's goal of reestablishing SEF as 
the primary channel of interaction with China on cross-Strait 
issues will be unlikely to accomplish in the run up to the 
2008 Presidential election.  For now, the PRC seems content 
to continue its current policy of negotiating with Taiwan on 
cross-Strait economic issues through private associations, 
with officials from the two sides embedded in their 
respective delegations. 
YOUNG