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C O N F I D E N T I A L SECTION 01 OF 03 SUVA 000402 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 08/08/2017 
TAGS: PREL PINR MARR PGOV EFIS XV CH TW
SUBJECT: TAIWAN AND CHINA RELATIONS IN THE PACIFIC -- 
UPDATE RE TUVALU, KIRIBATI, AND NAURU 
 
REF: SUVA 372 
 
Classified By: Amb. Dinger.  Sec. 1.4 (B,D). 
 
Summary 
------- 
¶1. (C) Competition between China and Taiwan for allegiance 
from small Pacific states remains intense.  In Tuvalu, Taiwan 
is a very visible donor, which Tuvaluans appreciate. 
However, the Taiwan ambassador to Tuvalu was PNGed after 
meddling in 2006 post-election politics.  The current 
ambassador curries favor well, while the PRC constantly 
probes for an opening.  In Kiribati and Nauru in recent 
years, leadership changes brought realignments on the 
China-Taiwan front.  Both Kiribati and Nauru will have 
elections again in August.  Both sets of incumbents seem 
confident of victory.  In both nations, Taiwan has been very 
visibly supportive, sometimes with minimal accounting 
requirements, while China has attempted to maneuver behind 
the scenes.  The Scotty government in Nauru moved up 
elections from October to August in part to limit alleged PRC 
efforts to buy votes.  Reportedly, some PRC agents attempted 
to enter Nauru on Mongolian passports.  The Taiwan ambassador 
to Nauru was recently replaced in an effort to inject more 
energy into the bilateral relationship.  Nauru complained to 
us, as Tuvalu has in the past, of Australian efforts to push 
alignment with the PRC.  Taiwan has offered used 
purse-seiners to several Pacific allies, raising issues under 
the Western and Central Pacific tuna treaty.  We comment that 
USG efforts need to continue to try to convince both China 
and Taiwan to be responsible donors.  End summary. 
 
¶2. (U) The Ambassador visited Tuvalu, Kiribati, and Nauru 
from July 16-27.  All three small nations recognize Taiwan. 
During the past year, all three have experienced 
"interesting" events in the China-Taiwan competition. 
 
Taiwan aid to Tuvalu: cash; in kind; and seaman jobs 
--------------------------------------------- ------- 
¶3. (C) Tuvalu has recognized Taiwan for the entire 29 years 
since independence.  The Tuvalu Minister of Finance said 
Taiwan currently provides A$5 million of assistance per year: 
A$3 million in budget support, and A$2 million in projects on 
the various islands.  The Taiwan Ambassador told us the A$5 
million recently increased from A$3.5 million.  He said all 
is "project aid" and all must be accounted for.  In addition, 
Taiwan just completed the refurbishment of one of Tuvalu's 
two inter-island ferry boats.  And Taiwan has agreed to place 
12 Tuvalu seamen on Taiwan merchant ships in an experiment. 
One of Tuvalu's main sources of income is from seamen working 
on German ships, but supply exceeds demand, in part because 
some of the Tuvalu seamen have had discipline problems.  The 
Taiwan Ambassador to Tuvalu told us the Tuvalu seamen will be 
much more expensive than seamen from the Philippines.  The 
Taiwan Government is placing the seamen on ships of a 
government-affiliated company and will subsidize the cost. 
 
Former Taiwan Amb PNGed; new Amb a good fit 
------------------------------------------- 
¶4. (C) Following Tuvalu's general election last August, the 
then-Taiwan Ambassador suddenly departed.  Speaker of 
Parliament Latasi and the current Taiwan Ambassador both told 
us the former Ambassador had been accused of meddling in the 
process of forming the new government.  Latasi said flat out: 
"he was offering bribes, totally inappropriate behavior."  He 
was PNGed.  The current Ambassador appears to have built very 
cordial relationships with Tuvalu's leadership.  The big 
social event in Funafuti each week is a Wednesday evening 
buffet at the one hotel.  The Taiwan Ambassador always 
invites a dozen or so Tuvalu VIPs.  The night we observed, 
the entire Cabinet, almost the entire governing caucus, was 
in attendance.  Interestingly, when we met informally with 
the new Ambassador, he offered a $100 gift watch, with 
assurance that nobody would ever know.  We declined, but it 
illustrates how ingrained gift-giving is with Taiwanese 
diplomats. 
 
PRC always digging, but Taiwan makes people content 
--------------------------------------------- ------ 
¶5. (C) The Tuvalu Finance Minister aspires to create an 
 
SUVA 00000402  002 OF 003 
 
 
"economic relationship" with the PRC, but he said others 
prefer to stick purely to Taiwan.  The Taiwan Ambassador 
reported that the PRC is "always digging."  When the Taiwan 
Embassy recently processed visas for two Tuvalu MFA officials 
to visit Taipei, they found used PRC visas in the passports. 
Taiwan believes the Tuvalu "old guard" politicians are loyal, 
including Speaker of the House Latasi.  Latasi, himself, 
informed us he has advocated switching to the PRC, given 
world realities; but Taiwan's presence is well-established 
and most people are content. 
 
Kiribati: August election; Tong and Taiwan confident 
--------------------------------------------- ------- 
¶6. (C) In Kiribati, the last two elections have seen switches 
of allegiance between Taiwan and the PRC, most recently in 
2004 when current President Tong came in and immediately 
recognized Taiwan.  That caused the PRC to evacuate its 
presence, including a satellite-tracking station on South 
Tarawa.  The PRC left behind a "caretaker" for its diplomatic 
properties, a person widely believed to be an intelligence 
agent.  Having perceived signs of meddling in politics, 
Kiribati Immigration refused to extend the caretaker's visa 
early this year.  Since then the PRC has not been visibly 
present; however, some surmise the PRC is continuing attempts 
via agents to influence the general elections now scheduled 
for Aug. 22.  President Tong told us he is confident of 
victory.  The Taiwan Ambassador feels the same.  The Taiwan 
Ambassador said all his government's assistance to Kiribati 
is carefully accounted for, and much of it is project aid on 
outer islands.   Tong does not believe the China-Taiwan issue 
will influence voting, though he thinks most Kiribati 
citizens perceive that Taiwan gives more than the PRC did. 
 
Nauru: PRC meddling helps trigger early election 
--------------------------------------------- --- 
¶7. (C) In Nauru, recent changes of government have also 
caused shifts between Taiwan and the PRC.  After the 2004 
election, the Scotty government restored Nauru's 
long-standing allegiance to Taiwan after previous President 
Harris had shifted to the PRC, reportedly in exchange for 
significant Chinese cash.  Thereafter, the Harris crowd 
charged that the Scotty crowd had received under-the-table 
cash from Taiwan.  In recent months, Nauru authorities allege 
PRC agents have brought in up to A$40,000 for distribution to 
voters in order to help Harris and other Scotty opponents win 
this year's election and shift allegiance back to Beijing. 
In fact, a major reason why Scotty moved the elections up by 
two months from October to August 25 is to reduce the PRC's 
opportunity to influence voters.  The Minister of Commerce 
reported that PRC representatives recently attempted to enter 
Nauru via a "Mongolian trade mission," traveling on Mongolian 
passports.  Nauru came to realize they were actually PRC 
citizens and revoked their visas. 
 
Taiwan aid: plenty available with minimal accounting 
--------------------------------------------- ------- 
¶8. (C) The Nauru Commerce Minister acknowledged that both 
Beijing and Taiwan dole out cash to politicians, it is just a 
matter of to whom.  The Secretary of Finance (an Aussie) told 
us Taiwan currently provides A$4.5 million per year in budget 
support (a Taiwan embassy official said it is A$4.7 million), 
and Taiwan is paying A$2 million per year for six years to 
buy a Boeing 737 for Nauru's "Our Airline."  Plus, Taiwan 
provides each Minister A$5,000 per month and all other 
government MPs A$2,500 per month in "project funding" that 
requires minimal accounting.  One MP told us he uses his 
portion to buy daily breakfast for all school children in his 
district.  Taiwan reportedly is also giving Nauru 100 tons of 
rice, which the Nauru Government then sells to the public at 
a discount price, to the consternation of Australian rice 
exporters.  (Note: As point of comparison, Australian FM 
Downer in July signed a new MOU that will provide Nauru A$15 
million per year for the next two years.) 
 
Nauru also sent a Taiwan Amb packing 
------------------------------------ 
¶9. (C) President Scotty informed us that Taiwan's recent 
change of ambassadors was not just because the previous one 
had reached age 65.  He had been too "aloof" and had "needed 
more energy."  He had not been sufficiently active socially, 
 
SUVA 00000402  003 OF 003 
 
 
and presumably had failed to spread sufficient largess. 
Given PRC activities, both Taiwan and the Scotty Government 
desired change.  The former ambassador had not wanted to 
leave, but he left.  The new one was to arrive on July 27. 
 
Australian lobbying on behalf of the PRC 
---------------------------------------- 
¶10. (C) Scotty told us Australia, which has the biggest 
assistance program to Nauru, has pushed for Nauru to align 
with the PRC.  Scotty figures that is none of Australia's 
business and has resisted.  (Note: on a past visit to Tuvalu, 
we heard a similar account of Australian lobbying for the 
PRC.) 
 
Purse-seiner offers 
------------------- 
¶11. (C) Taiwan has offered used purse-seiner tuna boats to 
Tuvalu and Nauru (one each) and the Marshalls (two).  It is 
possible similar offers have been made to the other 
Taiwan-affiliated Pacific nations.  We asked if Taiwan has 
coordinated its purse-seiner offers with the Western and 
Central Pacific Fisheries Commission (WCPFC).  The Tuvalu 
Deputy PM said his government realizes it needs a blessing 
from the WCPFC.  He suggested the current WCPFC limit on the 
number of purse-seiners permitted to fish could be maintained 
by inserting the island-state boats and dropping some of the 
distant-water boats.  He said the Forum Fisheries Commission 
discussed the issue last May in New Zealand, and further 
discussion will take place at the WCPFC annual meeting in 
December. 
 
Comment 
------- 
¶12. (C) The China/Taiwan competition remains heated in the 
Pacific.  From what we have observed, each side does what it 
deems necessary to try to maintain or gain allegiance in each 
small nation.  Some inducements are legitimate project aid. 
Some are straight-out government budget supplements.  Some, 
like the purse-seiners, appear to be based on flawed concepts 
that could frustrate regional-development goals.  And some 
are under-the-table bribes and vote-buying efforts.  It is in 
the region's interest, and the USG's, to encourage good 
behavior by both China and Taiwan in coordination with other 
donors, and to discourage illegality by both.  We know both 
China and Taiwan are aware of USG seriousness, from past 
high-level lobbying of both.  From what we heard in Tuvalu, 
Kiribati, and Nauru, the message still bears repeating. 
DINGER