VZCZCXRO5939
PP RUEHCN RUEHGH
DE RUEHIN #0020/01 0071004
ZNR UUUUU ZZH
P 071004Z JAN 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 7735
INFO RUEHBJ/AMEMBASSY BEIJING 7624
RUEHGH/AMCONSUL SHANGHAI 1588
RUEHCN/AMCONSUL CHENGDU 2305
RUEHSH/AMCONSUL SHENYANG 6275
RUEHGZ/AMCONSUL GUANGZHOU 0771
RUEHHK/AMCONSUL HONG KONG 8895

UNCLAS SECTION 01 OF 02 TAIPEI 000020 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR AIT/W, EAP/TC, INR/EAP 
 
FROM AIT KAOHSIUNG BRANCH OFFICE 
 
E.O. 12958: N/A 
TAGS: PGOV TW
SUBJECT: KAOHSIUNG LEADERS ON UPCOMING LEGISLATIVE AND PRESIDENTIAL 
ELECTIONS 
 
 
SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY 
 
¶1. (SBU) Summary:  During a January 3 trip to the south, Director 
Young discussed the upcoming legislative and presidential elections 
with Kaohsiung Mayor Chen Chu (DPP), Kaohsiung County Magistrate 
Yang Chiu-hsing (DPP) and Kuomintang (KMT) Kaohsiung City Chairman 
Hsu Fu-ming.  Mayor Chen and Magistrate Yang both predicted the DPP 
will fare poorly in the Legislative Yuan (LY) elections because the 
new electoral system featuring smaller single member districts 
disadvantages DPP candidates.  They also opined that some of 
President Chen Shui-bian's recent speeches have actually done damage 
to the DPP's prospects.  All three interlocutors indicated the 
economy is the key campaign issue, saying the poor economic 
performance of the ruling DPP has dampened support for its 
candidates.  The KMT's Hsu Fu-ming reported that presidential 
candidate Ma Ying-jeou has won support from the business community 
in the South for his advocacy of unfettered cross-Strait links.  End 
summary. 
 
January 12 Legislative Elections 
-------------------------------- 
¶2. (SBU) The new electoral system featuring smaller single member 
districts is disadvantageous to DPP candidates, Mayor Chen and 
Magistrate Yang separately observed.  They predicted the DPP will do 
poorly in the upcoming legislative elections on January 12. 
President Chen's prediction that the DPP can win 45-50 of 73 
district seats is too optimistic, Yang suggested, adding that the 
recent campaign speeches by the President have hurt DPP prospects. 
Although no one dares admonish President Chen directly, Yang 
revealed that he has tried to hint to the President that he should 
not talk too much during the campaign.  Mayor Chen complained that 
media outlets have taken sides, often distorting and exaggerating 
the President's remarks.   According to KMT City Chairman Hsu, 
President Chen's campaign efforts are no longer effective for the 
DPP, but definitely help boost KMT support, so "the KMT hopes that 
he will come more often to the south." 
 
¶3. (SBU) Hsu cited a recent survey indicating increased support for 
KMT candidates in Kaohsiung City.  The KMT has a chance to win 3 out 
of 5 seats in Kaohsiung City and 2 out of 4 seats in Kaohsiung 
County, he said.  Magistrate Yang and Mayor Chen agreed that the DPP 
and KMT might each win two seats in Kaohsiung County, while Mayor 
Chen predicted the DPP will win 3 seats in Kaohsiung City.  Both 
Yang and Hsu believe turnout for the legislative elections will be 
around 60 percent.  (Note: The turnout rate in Taiwan overall in the 
last two LY elections was 66 percent in 2001 and 59 percent in 
¶2004. 
 
Economy is the Key Issue 
------------------------ 
¶4. (SBU) Rather surprisingly, both Magistrate Yang and Mayor Chen 
indicated the economy, not Taiwan identity, is the main issue in the 
election.  According to Yang, President Chen's made a mistake last 
year in not following his advice to increase government salaries. 
Such a move would have led private companies to follow the 
government's lead, thus easing economic hardship.  The KMT's Hsu 
stated that Ma Ying-jeou's policy on direct cross-Strait links has 
won support from most business circles and would increase votes for 
Ma during the presidential elections.  Moreover, KMT vice 
presidential candidate Vincent Siew is an important campaigner for 
Ma in Southern Taiwan because he can address economic issues in the 
Taiwanese dialect.  Yang, on the other hand, indicated that Frank 
Hsieh's proposed policy on lifting foreign investment limitations 
for high-tech industries in China is aimed at capturing support from 
swing voters.  He further pointed out that the next president, no 
matter who he is, may open direct air links with China, simply by 
using a different name for the links. 
 
Presidential Election - Hsieh Versus Ma 
--------------------------------------- 
¶5. (SBU) Chen Chu and Yang acknowledged that President Chen has thus 
far dominated the LY election campaigns, eclipsing the party's 
candidate Frank Hsieh.  However, they pointed out, President Chen is 
just doing his job as party chairman.  They predicted that Frank 
Hsieh would take charge of his presidential campaign after the 
January 12 legislative elections.  Yang believed President Chen will 
have to take responsibility for a poor performance in the 
legislative elections by resigning his DPP chairmanship.  Mayor Chen 
commended President Chen for his diligent and passionate 
 
TAIPEI 00000020  002 OF 002 
 
 
campaigning, but stressed that the DPP party should "stay on 
message" in its election campaigns.  Chen emphasized that Frank 
Hsieh is campaigning mostly in central and northern Taiwan since he 
already has an upper hand in southern Taiwan, having served in 
Kaohsiung City as Mayor from 1998-2005.  As Hsieh's Kaohsiung City 
campaign manager Chen Chu believes she is best positioned to do his 
campaigning in Kaohsiung at this stage. 
 
¶6. (SBU) Mayor Chen praised Frank Hsieh as a good administrator with 
vision and political wisdom.  Chen Chu and Yang predicted that Frank 
Hsieh, if elected president, will definitely do a better job than 
President Chen in maintaining a good relationship with the U.S. and 
seeking peaceful ways to deal with China.  Both Chen and Yang 
reiterated that Frank Hsieh represents real Taiwan people, Yang 
noting that Ma Ying-jeou was born in Hong Kong, and Ma's stance on 
unification with China raises real concerns among Taiwanese.  Yang 
concluded that "Taiwan identity" (bentu) will still be an important 
issue in the upcoming presidential election, and Mayor Chen stressed 
"she was not pessimistic about Frank Hsieh's presidential 
prospects." 
 
Vote Buying 
----------- 
¶7. (SBU) Chen Chu complained that the new smaller district 
constituencies make vote-buying easier in legislative elections, 
benefiting the more developed and organized KMT political networks. 
Vote buying is a "public secret", which indicates a lack of maturity 
that continues to affect the development of Taiwan's democracy.  On 
the other hand, the KMT's Hsu held that his party is in no position 
to buy votes since the DPP holds all the administrative resources 
and the KMT has sold most of its assets.  He also expressed concern 
that Frank Hsieh's camp will buy votes in certain areas in Kaohsiung 
to get out the vote, claiming that Hsieh has "people" to do vote 
buying due to his deep connections as a former mayor. 
 
UN Referendum 
------------- 
¶8. (SBU) Although joining the United Nation is the wish of Taiwan 
people, Yang said he realizes this is a difficult task.  He 
mentioned with some hesitation that the two UN referenda may not 
pass because a referendum requires the participation of 50 percent 
of eligible voters.  KMT Hsu said that although the KMT called on 
people not to vote on the referenda being held simultaneously with 
the legislative elections, the party may not do the same for the UN 
referenda which will be held together with the presidential election 
in March.  The KMT fears it could be accused by the DPP of "not 
loving Taiwan," which would negatively affect its presidential 
candidate, Hsu explained. 
 
China's Threat to Taiwan's Diplomatic Ties 
------------------------------------------ 
¶9. (SBU) Yang expressed concern about Taiwan's loss of diplomatic 
ties with some countries due to Chinese pressure.  Yang said he has 
advised President Chen not to make more trips abroad because these 
trips often result in diplomatic loses afterwards. 
 
Comment 
-------- 
¶10. (SBU) The perception of a sub-par performance by the ruling DPP 
on Taiwan's economy has indeed eroded the DPP's support to some 
extent in the South.  Although the KMT hopes addressing the economic 
issue in its campaign will bring more support to its presidential 
candidate Ma Ying-jeou, they are aware that Ma will always to 
vulnerable on the Taiwan identity issue.  Mayor Chen and Magistrate 
Yang's expectation of a poor outcome for the DPP in the upcoming 
legislative elections on January 12 echoes the predictions of many 
others in southern Taiwan. 
 
Thiele 
 
Young