VZCZCXYZ0003
RR RUEHWEB

DE RUEHIN #1426/01 2750956
ZNR UUUUU ZZH
R 010956Z OCT 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0043
INFO RUEHBJ/AMEMBASSY BEIJING 8622
RUEHHK/AMCONSUL HONG KONG 0072

UNCLAS AIT TAIPEI 001426 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - NIDA EMMONS 
DEPARTMENT PASS AIT/WASHINGTON 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: U.S. ARMS SALES TO TAIWAN, 
U.S.-CHINA-TAIWAN RELATIONS, U.S. FINANCIAL CRISIS 
 
¶1. Summary:  Taiwan's major Chinese-language dailies focused their 
news coverage October 1 on U.S. President George W. Bush's call for 
Congress to pass the US$700 billion bailout bill Tuesday; on the 
Taiwan government's measures to prop up the Taiwan stock exchange 
after the House of Representatives rejected the bailout plan; on the 
stalled U.S. arms sales to Taiwan; and on the Taiwan government's 
follow-on measure to tackle the melamine-tainted dairy products from 
China.  The centrist, KMT-leaning "China Times" ran an exclusive 
news story on page seven with the headline "[U.S.] Arms Procurements 
Get Shelved Reportedly Because [Condoleezza] Rice Is Angry [about a 
New Leak]." 
 
¶2. In terms of editorials and commentaries, an analysis and a column 
in the pro-independence "Liberty Times" both criticized the Ma 
Ying-jeou Administration for blaming former President Chen Shui-bian 
for the failed U.S. arms sales to Taiwan.  The column said the Ma 
Administration's China-tilting policy is the main reason why 
Washington has allegedly frozen its arms sales to Taiwan.  With 
regard to U.S.-China-Taiwan relations, an op-ed in the 
pro-independence, English-language "Taipei Times" written by former 
AIT Chairman Nat Bellocchi said that many believe that Taiwan's 
improved relations with China "will substantially influence Taiwan, 
and changes in this relationship could affect U.S. relations."  A 
separate "Taipei Times" op-ed, written by a Taipei-based Western 
writer, said, "as a side effect of a policy shift on North Korea, 
whatever influence Beijing had over Washington's position on Taiwan 
could vanish, which in turn could weaken the elements in the White 
House and at the State Department who in the past five years have 
been willing to sacrifice Taiwan for the sake of China's role in the 
North Korean disarmament talks."  A column in the mass-circulation 
"Apple Daily," on the other hand, discussed the U.S. financial 
crisis.  The article said U.S. President George W. Bush, who is 
about to step down, could only play the role of supporting actor in 
this earthshaking change unfolding on Wall Street.  An editorial in 
the conservative, pro-unification, English-language "China Post" 
said that American taxpayers will have to pay the bill in the end, 
"willy-nilly, out of fear."  End summary. 
 
¶3. U.S. Arms Sales to Taiwan 
 
A) "Ma Administration Seeking to Creep out of Its Predicament, 
Falsely Attributing the Faults to Bian" 
 
Washington correspondent Nadia Tsao wrote in an analysis in the 
pro-independence "Liberty Times" [circulation: 700,000] (10/1): 
 
"... Ever since it assumed office, the Ma Administration has not 
seen any gratitude expressed by the Bush administration for his 
efforts to improve cross-Strait relations or maintain a low-profile 
manner towards the United States.  In terms of issues such as 
national security and arms procurements, both the ruling and 
opposition parties in Taiwan have both done something over the past 
seven years that sabotaged the goodwill gestures of the Bush 
Administration and mutual trust between the two, and they have all 
allowed political infighting to override Taiwan's national 
interests.  Now that China's strength has grown to a degree that one 
can hardly compare it with what it was eight years ago.  Given that 
Washington and Beijing share more deeply intertwined interests, plus 
the changes in the Taiwan Strait [over the last few years], will 
[the Ma Administration] be able to solve all its problems just by 
blaming everything on Chen Shui-bian?  The Ma Administration should 
at least be honest with itself!" 
 
B) "Abandon One's Armor and Helmet!" 
 
The "Free Talks" column in the pro-independence "Liberty Times" 
[circulation: 700,000] wrote (10/1): 
 
"... If one reflects on the words and deeds Ma Ying-jeou has 
previously made toward the U.S. arms sales to Taiwan and the 
pro-China policy he had adopted since assuming office, one could 
tell that Ma has been 'abandoning his armor and helmet' all along, 
trying to fawn on China by crippling Taiwan's defense capabilities. 
... The Ma Administration decided to abandon its armor and helmet 
[i.e. to flee in defeat], but it also sought to use the former Chen 
Administration as an excuse for its behavior.  The remarks to the 
effect that the [U.S.] arms sales [to Taiwan] were frozen because 
'Bush is still mad at Bian' are merely aimed at shirking Ma's 
responsibilities.  Ma has been in office for over four months now. 
His policy that shows a rapid tilt toward China is the main reason 
why Washington has frozen its arms sales to Taiwan.  It is truly 
absurd, incompetent and shameful that [the Ma Administration] has 
used Bian as an excuse for what his own fault!" 
 
¶4. U.S.-China-Taiwan Relations 
 
A) "Uncertain Times for Taiwan, the US and PRC" 
U.S.-CHINA-TAIWAN RELATIONS, U.S. FINANCIAL CRISIS 
 
Nat Bellocchi, former AIT chairman and a now a special adviser to 
the Liberty Times Group, opined in the pro-independence, 
English-language "Taipei Times" [circulation: 30,000] (9/27): 
 
"The US and Taiwan are going through a very uncertain period. Both 
are dealing with very difficult economic problems. In addition, the 
US faces a tight election, and Taiwan has a new government that is 
focused on working with China. The future of the US-Taiwan 
relationship is not as clear as in the past. ...  While the US has 
problems of a global magnitude, Taiwan's issues are no less 
important. ... 
 
"Then there is the relationship with the US. Many think Taiwan's new 
government will continue to improve relations with China. 
Inevitably, this will substantially influence Taiwan and changes in 
this relationship could affect US relations.  In recent years, 
Taiwan, the US and China have seen many changes in their 
relationships. The US has had problems in the Middle East and is now 
battling an economic crisis. Taiwan, meanwhile, has had problems 
with the US and China.  The US will have to spend time rearranging 
its economy and may have to continue to focus on the Middle East, 
therefore persisting in its habit of paying less attention to other 
world issues. 
Taiwan, meanwhile, will likely spend much of its efforts determining 
how to relate to China while continuing to work on closer 
relationships with other countries. 
 
"B) "Beijing's 'North Korea' Card No Ace" 
 
¶J. Michael Cole, a writer based in Taipei, opined in the 
pro-independence, English-language "Taipei Times" [circulation: 
20,000] (9/29): 
 
"Well before President Ma Ying-jeou's peace overture to Beijing 
required supposed nursing by the international community, many 
commentators rationalized US President George W. Bush's unexpected 
policy volte-face on Taiwan by arguing that the US needed China's 
help in the six-party negotiations to disarm a nuclear North Korea. 
Cognizant of Beijing's style of diplomacy, in which it never gives 
freely but always expects something in return, the US and other 
countries involved in the talks with Pyongyang allowed themselves to 
become more flexible on a matter they knew was of tremendous 
importance to China - Taiwan. Some could argue, therefore, that 
Taipei became the sacrificial lamb to ensure the participation of 
Beijing - North Korea's principal diplomatic ally and neighbor - in 
the disarmament talks. ... 
 
"As a side effect to a policy shift on North Korea, whatever 
influence Beijing had over Washington's position on Taiwan could 
vanish, which in turn could weaken the elements in the White House 
and at the State Department who in the past five years have been 
willing to sacrifice Taiwan for the sake of China's role in the 
North Korean disarmament talks.  While there is nothing to celebrate 
in the failure of diplomacy to persuade Pyongyang to abandon its 
nuclear ambitions, a reversal of fortunes-combined with a 
Taiwan-friendly Japanese prime minister - could bring about a 
positive shift in policies toward Taiwan, at modicum a lessened 
sense of isolation. If that opportunity emerges, it should be 
seized." 
 
¶5. U.S. Financial Crisis 
 
A) "Rome Is On Fire" 
 
Columnist Antonio Chiang wrote in his column in the mass-circulation 
"Apple Daily" [circulation: 520,000] (10/1): 
 
"... No matter in what form the [U.S.] government's bailout plan is 
approved, the good life that used to be enjoyed by the rich guys on 
Wall Street will come to an end now.  In particular, it will be a 
nightmare for the privileged few of Wall Street when the CEOs of the 
big banks are lined up to receive humiliating interrogations by 
Congress.  But there are also times when Wall Street can take 
delight in others' misfortunes.  [They will be amazed to see] the 
partisan struggles in Congress and that the reputation of the U.S. 
president, the most powerful man in the world, has dropped to such a 
low. 
 
"The financial bailout plan proposed by Bush would not win any 
support from Congress had it not been endorsed by the heads of the 
Department of Treasury and Federal Reserve Board.  All the more, the 
approval ratings for the Congress are even lower than the 30 percent 
for President Bush.  The voters do not trust Bush, nor will they 
trust Congress. ... Bush, who is about to step down, could only play 
the role of supporting actor in this earthshaking change.  It is a 
polite way to call him a lame duck, while in reality, he is nearly 
irrelevant now. ..." 
U.S.-CHINA-TAIWAN RELATIONS, U.S. FINANCIAL CRISIS 
 
B) "Socialist U.S., Capitalist China" 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (9/27): 
 
"The world is changing in unbelievable ways. America is becoming 
increasingly socialist while China is now unabashedly capitalist. 
Are we living in the real world? ...  Now we are witnessing a 
beleaguered George W. Bush pleading to Congress for approval of a 
US$700 billion bailout plan, the largest in history, drafted by 
Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke. 
Paulson and Bernanke were trying hard to get unlimited authority to 
use the money in whatever way they deem appropriate to rescue 
troubled financial institutions.  Paulson, a former Wall Street 
executive, warned Congress that if the proposal was not approved 
immediately, the consequences would be disastrous, evoking the 
specter of a financial meltdown like the Great Depression in the 
1920s. 
 
"Was this scare mongering? Certainly it sounded familiar. President 
George used the same fear to sell Congress and the American people 
his war on Iraq, claiming Saddam Hussein possessed weapons of mass 
destruction and was ready to use them. Now, the war is costing 
American taxpayers US$1 billion per day. The country's national debt 
soared to US$9.6 trillion as a result. The financial burden is a 
contributing factor to America's financial disaster of 9/11 
proportions. 
 
Few would deny the urgency of the crisis. But America is the 
fortress of capitalism that prizes the market economy. Capitalists 
made their fortunes and live like kings. That's OK and that's the 
beauty of capitalism. But capitalists are not supposed to seek 
government help when their companies go broke. Wall Street 
companies, after all, are not like China's SOEs which can always get 
money from the bank when they operate at a loss. Besides, China's 
"iron bowl" CEOs don't get eight-digit pay packages, either.  That's 
why Paulson's proposal has raised so many eyebrows. ... 
 
"Unfairness and irony notwithstanding, American taxpayers would have 
to bite the bullet, as a harried Bush warned the nation on live TV 
Wednesday night of the dire consequences if the bailout plan was not 
approved at once. Was he crying wolf again?  In the end, American 
taxpayers will have to pay the bill, willy-nilly, out of fear. But 
then, American capitalism will not be the same, just like Chinese 
socialism is no longer true to the meaning of the word. China's 
rapacious capitalists are making money at all costs - just look at 
the deaths at unsafe coal mines and sickened infants fed with 
tainted milk." 
 
YOUNG