VZCZCXRO7944
PP RUEHCN RUEHGH
DE RUEHIN #1044/01 1980631
ZNR UUUUU ZZH
P 160631Z JUL 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 9519
INFO RUEHBJ/AMEMBASSY BEIJING 8455
RUEHGH/AMCONSUL SHANGHAI 2160
RUEHCN/AMCONSUL CHENGDU 2777
RUEHSH/AMCONSUL SHENYANG 6735
RUEHGZ/AMCONSUL GUANGZHOU 1346
RUEHHK/AMCONSUL HONG KONG 9678

UNCLAS SECTION 01 OF 03 TAIPEI 001044 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR AIT/W, EAP/TC, INR/EAP 
 
FROM AIT KAOHSIUNG BRANCH OFFICE 
 
E.O. 12958: N/A 
TAGS: PGOV TW
SUBJECT: SOUTHERN TAIWAN DPP "YOUNG TURK" INSISTS DPP POLITICAL 
FORTUNES ON THE RISE 
 
SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY 
 
¶1.  (SBU) Summary:  In his July 9 meeting with DIR, popular DPP 
Kaohsiung County Magistrate Yang Chiu-hsing praised new DPP Chair 
Tsai Ing-wen despite some drawbacks and predicted DPP gains in 2009 
county and mayoral elections.  Lamenting the last two years of 
President Chen's administration as a lost opportunity, Yang derided 
Chen's public obsession with Taiwan sovereignty issues but suggested 
Chen could reemerge as a political force if the courts cleared him 
of corruption charges.  Yang criticized the new KMT administration's 
tilt towards the PRC, commenting that Ma's government was 
overestimating the economic impact of direct cross-strait links and 
Chinese tourists.  Yang remained coy about his own future plans 
after he completes his final term as magistrate, but some local DPP 
contacts hope Yang will run for Kaohsiung City Mayor if current 
Mayor Chen Chu's fragile health falters.  End Summary. 
 
Magistrate Yang:  DPP "Young Turk" 
---------------------------------- 
 
¶2.  (SBU) During his July 9 visit to Kaohsiung, DIR Young met with 
DPP Kaohsiung County Magistrate Yang Chiu-hsing, considered one of 
the leading "young turks" of the DPP's post-President Chen Shui Bian 
generation.  Known for his energetic governance and passion for 
environmental causes, Yang has earned poll ratings among the highest 
of any major DPP elected official island-wide.  Although personally 
committed to the DPP's "Taiwan identity" focus, Yang in public has 
cut a more centrist figure, for example strongly supporting the less 
strident Tsai Ing-wen as DPP party chair as the most effective 
strategy for the DPP to recoup its lost power.  Yang will finish up 
his second and final term in December 2009 and is being touted as a 
possible DPP candidate elsewhere in southern Taiwan, including for 
the 2010 mayoral seat in next-door Kaohsiung City, if DPP incumbent 
Chen Chu opts out. 
 
DPP in 2009:  Rising Fortunes 
----------------------------- 
 
¶3.  (SBU) In his meeting with DIR, Yang insisted that the DPP's 
fortunes were on the rise.  New DPP Chair Tsai Ing-wen was well 
placed to reinvigorate the DPP, he explained, because she was 
relatively young, not beholden to any faction and experienced in 
government.  Furthermore, her clean reputation would attract 
moderate and young voters that had tilted towards the KMT in March's 
Presidential election.  Her main drawbacks were limited ties to the 
party (she joined the DPP just four years ago), a lack of campaign 
experience and insufficient time spent at the grass roots.  Yang 
applauded Tsai's efforts to refill depleted party coffers and 
promised that the DPP in Kaohsiung County would meet its fundraising 
quota. 
 
¶4.  (SBU) Yang predicted that rising prices and Taiwan's faltering 
stock market would increase public dissatisfaction with the KMT 
government.  If this trend continued, Yang stated, the DPP would do 
well in 2009 "3-in-1" county and mayoral elections.  He expressed 
confidence that the DPP would not only hold on to its current seats 
in Tainan City and County and in Kaohsiung, Pingtung and Chiayi 
Counties but would also take Yilan and Nantou Counties from the KMT. 
 Only Chiayi City would be difficult to win, Yang assessed, since 
the current KMT mayor there was governing in a non-partisan manner, 
focusing on family ties and constituent services. 
 
Chen Presidency:  Lost Opportunity 
---------------------------------- 
 
¶5.  (SBU) Looking back on Chen Shui-bian's Presidency, Yang 
explained that President Chen had lost an opportunity over the last 
two years by failing to deal effectively with the PRC.  The DPP 
already believed that Taiwan was a sovereign country, Yang 
explained, but it was not constructive for Chen to focus solely on 
national sovereignty questions.  Recent polls indicated that most 
voters support the status quo and only a small minority favor 
independence or unification.  Therefore, Yang went on, the party 
should accept the public's verdict, stick with the status quo, and 
let time solve the cross-Strait problem.  Yang stated that President 
Chen "talked too much and too frankly."  The deep green had hijacked 
Chen towards the end of his term, he stressed, and put the party at 
a severe disadvantage during the 2008 election season. 
 
¶6.  (SBU) Nevertheless, Yang underscored, Chen remained the DPP's 
 
TAIPEI 00001044  002 OF 003 
 
 
most influential force because of his strong grass-roots support. 
Yang expressed confidence that the courts would find Chen innocent 
of corruption charges.  Once that happened, Yang explained, voters 
would start to feel sentimental about DPP rule and reassess Chen's 
Presidency, which would allow Chen to reemerge publicly in several 
years and affect the DPP's 2012 Presidential nomination process. 
Looking ahead to the 2012 election, Yang predicted that 2008 DPP 
Vice Presidential nominee Su Tseng-chang would be the DPP candidate 
and Tsai Ing-wen would be his running mate. 
 
KMT:  Old Familiar Faces 
----------------------- 
 
¶7.  (SBU) On the new KMT government, Yang claimed that voters were 
already questioning the KMT's economic stewardship and losing 
confidence in Ma's cabinet.  He said they had noticed the advanced 
age of some of Ma's ministers (Premier Liu is 65 and Straits 
Exchange Foundation (SEF) Chairman P.K. Chiang is 76) and the 
prevalence of old KMT government officials from eight years ago. 
Agreeing with DIR's comment that KMT unity was fracturing with the 
election over, Yang remarked that the Executive and Control Yuan 
nomination imbroglio had exacerbated tensions between Ma and KMT 
Chair Wu and that Ma's problems with LY Speaker Wang Jin-pyng were 
long standing. 
 
¶8.  (SBU) Yang speculated that if Ma tried to reverse his declining 
poll ratings in southern Taiwan by conducting another "long stay" 
campaign, the tactic might backfire.  Yang stated he even doubted 
the sincerity of Ma's original "long stay" campaign last autumn, 
suggesting it was motivated more by a desire to fend off accusations 
of spending too much time in the office ("zhai-nan") rather than a 
genuine interest in understanding the economic needs of southern 
Taiwan. 
 
¶9.  (SBU) Recounting that Ma had recently invited southern mayors 
and magistrates to Taipei for a "tea party" discussion, Yang related 
that most of the discussion involved local officials asking Ma for 
more resources.  Yang said he was the only participant who raised 
political issues, which included him reminding Ma of Ma's campaign 
promise that Taiwan's people would control Taiwan's future.  Yang 
said he argued to Ma that direct cross-Strait links jeopardized such 
control and signaled a KMT willingness to relinquish Taiwan's 
sovereignty.  Yang lamented that other magistrates did not follow 
his lead, preferring instead to ask for money.  At least, Yang 
acknowledged, Ma would probably agree to continue convening these 
tea parties as long as the invitees did not pressure him on politics 
too much. 
 
PRC Tourists:  Not a Panacea 
---------------------------- 
 
¶10.  (SBU) Criticizing Ma's government for leaning too much towards 
the PRC, Yang stated that the influx of PRC tourists stemming from 
direct cross-strait links would do little to boost Taiwan's economy. 
 PRC tourist numbers were too limited, he explained, and their 
purchasing power was too low.  Yang said he had heard that some 
local stores would not welcome PRC tourists since they were "too 
noisy."  He also suggested that PRC tourists would drive away 
high-spending Japanese tourists, relating that one local hotel 
manager told him that noisy PRC tourists forced him to put Japanese 
tourists on separate floors.  Yang claimed that this phenomenon (PRC 
tourists driving away Japanese tourists) had already materialized in 
the Philippines. 
 
¶11.  (SBU) Yang insisted that Ma's government had overstated the 
impact of direct cross-Strait flights.  Over the first weekend of 
direct flights, he pointed out, many more Taiwanese than mainlanders 
had taken those flights. Yang stressed that while other magistrates 
and mayors were actively soliciting Chinese tourists, he would not 
go out of his way to do so.  Chinese tourists were not a panacea for 
Taiwan's ailing economy, he underscored.  Increased numbers from the 
PRC might even bring problems, like pandemic diseases, fake 
marriages and human smuggling. 
 
Yang's Future:  Maybe Not in Kaohsiung City 
------------------------------------------- 
 
¶12.  (SBU) Asked by DIR about his future political plans, Yang 
demurred, noting that it would be difficult for him to run 
elsewhere, since most counties and cities already had strong 
 
TAIPEI 00001044  003 OF 003 
 
 
potential DPP candidates from those local areas.  Current DPP Tainan 
City Mayor Hsu Tien-tsai might run for Tainan County magistrate, but 
he would have to overcome several local DPP candidates.  DPP 
Legislator Lai Ching-te was already a strong candidate for the seat 
Hsu would be vacating in Tainan City.  Yang predicted that Kaohsiung 
City Mayor Chen Chu would take advantage of her incumbency to run 
for reelection in 2010 but questioned whether her fragile health was 
up to the demands of a vigorous campaign. 
 
Comment 
------- 
 
¶13.  (SBU) When Mayor Chen's poll ratings were lagging earlier this 
year, Yang's backers had eagerly promoted him as the stronger 
candidate to run against an invigorated KMT in Kaohsiung City in 
¶2010.  If Yang's supporters persist, the local DPP "New Tide" 
faction to which both Chen and Yang belong could split, paving the 
way for a strong KMT candidate to continue the KMT's surprising 
winning streak in Kaohsiung City.  If Yang's supporters back down, 
Chen will fully enjoy the incumbent's edge, especially if Kaohsiung 
pulls off a successful World Games in 2009 and the city's economy 
begins to pick up steam.  Nevertheless, both our local DPP and KMT 
contacts are keeping a close watch on the mayor's health, and Chen's 
detractors are likely to pounce on any sign that her lingering 
health problems may hinder a strong campaign.  End comment. 
 
CASTRO 
 
YOUNG