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FM AMCONSUL SHANGHAI
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INFO RUEHBJ/AMEMBASSY BEIJING 1684
RUEHCN/AMCONSUL CHENGDU 1095
RUEHGZ/AMCONSUL GUANGZHOU 1066
RUEHHK/AMCONSUL HONG KONG 1225
RUEHIN/AIT TAIPEI 0906
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7191

C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000043 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/CM 
NSC FOR DENNIS WILDER 
 
E.O. 12958: DECL:  2/1/2033 
TAGS: PGOV PREL CH TW
SUBJECT: SHANGHAI ACADEMIC ZHANG NIANCHI CAUTIOUSLY OPTIMISTIC ON 
TAIWAN 
 
REF: A) SHANGHAI 41; B) SHANGHAI 42; C) 2007 SHANGHAI 791 
 
CLASSIFIED BY: Christopher Beede, Political/Economic Section 
Chief, U.S. Consulate , Shanghai . 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (C) Summary.  In a January 23 meeting with EAP DAS Thomas 
Christensen, Shanghai Institute for East Asian Studies (SIEAS) 
President Zhang Nianchi was cautiously optimistic that there can 
be progress on cross-Strait issues.  He was pleased with the 
Taiwan Legislative Yuan (LY) election results and said that this 
has decreased the threat of independence.  However, he was still 
concerned that the UN membership referendum could pass and also 
noted that President Chen Shui-bian will still have space and 
opportunity to cause problems, even after he steps down.  He 
said it was unlikely that both sides can come to an agreement on 
a peaceful framework as proposed by President Hu Jintao during 
the 17th Party Congress.  EAP DAS Christensen said that, given 
the democratic constraints on Chen Shui-bian, the only way he 
coiuld achieve any radical goals is if the mainland were to 
overreact and provide the emergency environment in Taiwan 
necessary for him to do so.  Christensen urged that Beijing take 
a more moderate approach toward Taiwan and seize the opportunity 
of a new leadership there to improve cross-Strait relations. 
Squeezing Taiwan's international space and taking other 
provocative actions only help supporters of Taiwan independence. 
 End Summary. 
 
Independence Threat Decreased 
----------------------------- 
 
¶2.  (C) EAP DAS Christensen met with SIEAS President and Taiwan 
expert Zhang Nianchi on January 23.  A former assistant to Wang 
Daohan, Zhang is a leading expert on Taiwan issues in China and 
continues to maintain a great deal of influence on Beijing's 
Taiwan policy.  SIEAS Deputy Director Hu Lingwei, Pol/Econ 
Section Chief and Poloff also participated in the meeting. 
Unlike many other academics in Shanghai (see reftel A and B), 
Zhang holds a more moderate and optimistic approach to Taiwan. 
He was pleased with the results of the January LY elections and 
said the results have decreased the threat of Taiwan 
independence.  This was good for cross-Strait relations and 
U.S.-China relations.  He said that the United States and the 
international community were very active in making known 
opposition to the referendum.  This has been very helpful and he 
hoped that this trend will continue. 
 
Referendum Can Still Pass 
------------------------- 
 
¶3.  (C) However, the upcoming referendum on Taiwan membership in 
the UN still poses a threat to regional stability.  The LY 
elections and the Presidential elections are very different. 
The LY election's voter participation rate was rather low.  A 
higher turnout can be expected for the March Presidential 
election, increasing the number of potential participants in the 
referendum.  In addition, while the DPP lost seats in the LY 
election, opinion polls indicate that approximately 40 percent 
of the electorate still supports the DPP.  There is still a 
possibility that the DPP can win the majority of votes in the 
March Presidential elections. 
 
¶4.  (C) According to Zhang, Taiwan people have a very different 
attitude and do not always pay sufficient attention to the true 
opinions of other countries.  Some Taiwan scholars believe that 
the United States opposes the UN referendum because of the U.S. 
relationship with the Mainland, but that in its "heart," the 
United States actually supports Taiwan's independence efforts. 
Many in Taiwan believe that many nations are sympathetic to 
Taiwan's plans for a UN membership referendum, regardless of the 
state of official relations between those nations and Beijing. 
DAS Christensen countered that in addition to the unequivocal 
U.S. statements of opposition to the UN membership referendum, 
the European Union and Japan are among the other members of the 
international community that have clearly expressed opposition 
to the referendum.  Zhang continued that no one could have 
predicted that the KMT would have won two-thirds to 
three-quarter of LY seats.  Many observers might now think that 
there is a possibility that Taiwan will return to a strong 
one-party state and this could have a bad effect on domestic 
politics.  However, this decision should be left up to the 
Taiwan voters.  He asked whether the United States would now try 
to interfere and create a balance between the KMT and DPP in 
 
SHANGHAI 00000043  002 OF 003 
 
 
Taiwan by tacitly supporting the DPP in the Presidential 
election. 
 
¶5.  (C) DAS Christensen disagreed that people in Taiwan did not 
pay attention to international opinion.  In addition, most 
Taiwan people do not believe that the United States secretly 
supports Taiwan independence.  The United States has made its 
opposition to the UN membership referendum very clear and people 
on Taiwan have certainly notices.  For its part, the Mainland 
should not exaggerate the importance of the referendum.  If it 
passes, Taiwan's status will still remain the same.  More 
importantly, if the Mainland is too aggressive, this would 
provide President Chen with an excuse and a conducive 
environment to take more radical actions to promote 
independence.  The LY results and President Chen's decision to 
step down as DPP Chair will have a positive effect as it allows 
DPP Candidate Frank Hsieh to take over the party and assert a 
more moderate posture in the campaign.  Hsieh is more moderate 
than Chen.  The United States does not interfere in Taiwan's 
domestic politics and has no preference between the candidates. 
The USG can work well with any Taiwan politician as long as they 
do not support destabilizing pro-independence policies. 
 
¶6.  (C) Zhang agreed with Christensen's overall statement and 
said that it is important to not exaggerate the threat posed by 
the referendum.  Appearing to lament the ignorance of many of 
his influential compatriots, he asserted that, while there are 
some in China who are pleased with the LY results and believe 
that the referendum is not a threat, there are still many who 
are concerned about the referendum and see it as a threat to 
stability.  He also agreed that DPP Candidate Hsieh is more 
moderate and said that no matter who wins the election that 
person would be better than President Chen Shui-bian. 
 
President Chen Still A Threat 
----------------------------- 
 
¶7.  (C) Like many scholars, Zhang voiced concerns that President 
Chen still has lots of space and opportunity to cause problems 
until he steps down.  He wondered whether Chen would accept the 
results of the Presidential election and noted that there is no 
disadvantage for President Chen to take radical actions.  In 
addition, President Chen will likely still have opportunities to 
play a destabilizing role even after he steps down from office. 
DAS Christensen stressed that there continues to be democratic 
constraints on President Chen that will prevent him from 
implementing any radical actions.  President Chen will not be 
able to carry out any actions not supported by the people of 
Taiwan unless Beijing overreacts and gives President Chen an 
excuse to enact radical policies and the domestic atmosphere 
necessary to implement those policies. 
 
A Peaceful Framework 
-------------------- 
 
¶8.  (C) Zhang asserted that although the new leadership in 
Taiwan will likely be more moderate and it will be relatively 
easy to resolve such issues as cross-Strait tourism and Taiwan 
investment in the Mainland, it will be very difficult to reach 
agreement for a "peace framework" as proposed by President Hu 
Jintao during the 17th Party Congress.  Both sides still 
disagree on the definition of the 1992 consensus.  At the time 
of the 1992 meetings in Singapore, the focus was on creating the 
Three Links, not on creating a Consensus on one China, which was 
just a convenient way to move on to the important issues.  The 
"One China" concept was not strictly defined and it was easy to 
get around it.  Now it is a different era.  The three direct 
links and other problems are not too difficult to achieve, while 
the "One China" concept is problematic.  For there to be an 
agreement on a peaceful framework, both sides must discuss 
issues such as the definition of "One China," Taiwan's identity 
and other difficult issues.  It will not be easy to discuss 
these issues, but President Hu made the proposal, and now China 
must do it. [Note: Zhang seemed quite critical of HJT's 
statements in the 17th Party Congress speech because they set 
the bar too high for the foreseeable future]   DAS Christensen 
urged that China avoid discussing definitions of "One China" 
with the new leadership in Taiwan and also to stop insisting on 
pre-conditions for discussions.  In addition, there need not be 
an explicit agreement for both sides to have a "peaceful 
framework." 
 
Squeezing Taiwan's International Space 
-------------------------------------- 
 
SHANGHAI 00000043  003 OF 003 
 
 
 
¶9.  (C) DAS Christensen expressed concern over Beijing's 
attempts to squeeze Taiwan's international space by preventing 
Taiwan from having meaningful participation in international 
organizations requiring statehood for membership, by placing 
unacceptable conditions on Taiwan's membership in international 
organizations for which statehood is not a prerequisite, and by 
competing with Taiwan for diplomatic recognition.  Reports 
suggest that Beijing has also apparently considered other 
measures that would lead to instability such as proposing a new 
civil aviation route near the middle of the Taiwan Strait. 
These aggressive measures are causing problems and are 
counterproductive.  He urged that academics like Zhang advise 
Beijing to find a better and more flexible way in dealing with 
Taiwan.  The proposed mid-Strait civil aviation route is a bad 
and dangerous idea, militarily and politically, at any time and 
especially in the run-up to the March general election in Taiwan. 
 
¶10.  (C) According to Zhang, lots of his friends have suggested 
to the Central Government that if KMT Candidate Ma Ying-jeou 
becomes President and there continues to be cross-Strait 
stability, then in the third to fifth year of Ma's Presidency, 
Beijing should allow Taiwan to have some kind of representation 
in some international organizations.  While Beijing would never 
support Taiwan joining organizations as a country, perhaps it 
can have observer status to organizations such as the World 
Health Organization.  Zhang agreed that increasing Taiwan's 
international space would decrease cross-Strait tensions.  He 
added, however, that the hardest part of his Taiwan work over a 
period of twenty years has been getting Mainland officials to 
acknowledge different or new points of view and increase 
understanding about Taiwan and the views held by people there. 
DAS Christensen in reply emphasized the constructive role played 
by scholars and researchers in trying to resolve Taiwan issues 
and called for the reconsideration of more moderate approaches 
to cross-Strait relations, as advocated by Wang Daohan in the 
late 1990s.  He cited Wang's flexible idea of shared sovereignty 
as the type of innovative thinking that one rarely sees in 
high-level discussions of Taiwan on the mainland and that will 
be necessary if the mainland is to seize the opportunity of 
improving relations across the Strait when a new leadership 
assumes office in Taiwan on May 20. 
 
¶11.  (C) DAS Christensen cleared this report. 
JARRETT