VZCZCXYZ0005
RR RUEHWEB

DE RUEHIN #1450/01 2810948
ZNR UUUUU ZZH
R 070948Z OCT 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0088
INFO RUEHBJ/AMEMBASSY BEIJING 8639
RUEHHK/AMCONSUL HONG KONG 0088

UNCLAS AIT TAIPEI 001450 
 
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.-TAIWAN ARMS SALES, U.S.-TAIWAN 
RELATIONS, U.S. FINANCIAL CRISIS 
 
¶1. Summary:  Taiwan's major Chinese-language dailies focused news 
coverage October 7 on the arrest of Yeh Sheng-mao, former Director 
of the Ministry of Justice's Investigation Bureau (MJIB); National 
Security Bureau (NSB) Director-General Henry Tsai's remarks that 
SARS was a bio-chemical warfare agent produced by China; and the 
global markets' tumble. 
 
¶2. In terms of editorials and commentaries, with respect to the 
U.S.-Taiwan arms sales, a news analysis in the centrist, KMT-leaning 
"China Times" speculated that the weapons systems that the United 
States wishes to sell to Taiwan was actually a compromise reached 
between the United States and China, judging from the defensive 
character and the reduced quantities in the arms sales package.  An 
editorial in the conservative, pro-unification, English-language 
"China Post" discussed several calculations that the United States 
Government allegedly used in notifying the Congress of the arms 
sales to Taiwan.  The United States' calculations include 
diminishing the chance of military conflicts in the Taiwan Strait, 
walking a thin line between Taiwan and China, and keeping Taiwan as 
a market for the United States weaponry.  An editorial in the 
pro-independence, English-language "Taipei Times" said that Beijing 
views the United States as an of both Taipei and Beijing, judging 
from a subtle change in Beijing's response to the United States' 
intended arms sales to Taiwan, as well as some warnings in 
Washington over Taiwan's warming relationship with China.  The 
editorial also alleged that parts of the United States government 
meddled in the lead-up to Taiwan's presidential election in March. 
An op-ed in the "Taipei Times" said the delay of the United States 
Government's notification to the Congress regarding the arms sales 
to Taiwan was due to the United States' considerations domestically 
and internationally, including closer Sino-U.S. relations and the 
thaw in cross-Strait relations.  However, the op-ed warned that such 
thinking is not right from a long-term perspective.  Regarding 
U.S.-Taiwan relations, an op-ed in the "Taipei Times" listed several 
possible new dynamics that might be attached to U.S.-Taiwan 
relations, no matter whether Democratic Senator Barack Obama or 
Republican Senator John McCain becomes the next U.S. President.  An 
editorial in the pro-independence, English-language "Taiwan News" 
talked about Democratic Senator Barack Obama and Republic Senator 
John McCain's attitudes toward Taiwan in the broad picture of their 
China policies.  The editorial suggested that the Ma Ying-jeou 
Administration prepare to deal with a Democratic administration, 
given that Obama's prospects are on the upswing.  Amid the issues of 
U.S. financial crisis recently, an editorial in the "China Post" 
said the United States' leadership in the world is collapsing, in 
the wake of the financial crisis storming the United States 
recently.  Another editorial in the "China Post" said the United 
States might need to take a decade to rebuild its financial markets. 
 The editorial lamented the Bush Administration's poor legacy and 
discussed prospects for Democratic Senator Barack Obama's 
presidency.  End summary. 
 
¶3. U.S.-Taiwan Arms Sales 
 
A) "The Arms Sales Not Only Shrank but Were Also Delayed; Could Be A 
Result of Compromise between U.S. and China" 
 
Journalist Wu Ming-chieh wrote a news analysis in the centrist, 
KMT-leaning "China Times" [circulation: 400,000] (10/6): 
 
"The United States finally announced the items of the weapons 
systems it wants to sell to Taiwan for the first time since 
[Taiwan's] Ma Ying-jeou Administration took office [in May].  The 
result shows that 'the sale of weapons systems' items and quantities 
not only shrank but were also delayed.'  If [we] want to interpret 
[the result of the arms sales] sensibly, the whole batch of arms 
sales to Taiwan was a checklist of compromise and appeasement 
reached in between the United States and China.  If that was the 
case, then U.S.-Taiwan relations are likely still 'sending a yellow 
light.'  We [Taiwan] should be cautious rather than hold an 
optimistic view.' 
 
"What is worth noticing is that, according to the judgment of 
[Taiwan's] former Deputy Minister of National Defense Lin Chong-pin, 
who just returned to Taiwan from a trip to Washington, D.C., because 
of the closer Sino-U.S. relations, it was very likely that the 
United States might have notified China regarding the matter of arms 
sales to Taiwan in the course of the arms sales.  The whole result 
appears to be a compromise formulated between the two sides [the 
United States and China].  Similarly, [Taiwan's] former 
representative to the United States Chen Chien-jen also holds the 
view that arms sales this time show that the 817 Communiqu [signed 
on August 17, 1982] between China and the United States might have 
produced the effect.  We [Taiwan] should pay close attention to such 
a sign." 
 
B) "Arms Purchase Not for Real War" 
RELATIONS, U.S. FINANCIAL CRISIS 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (10/7): 
 
"... The arms deal, which the U.S. Congress must approve in 30 days, 
is largely symbolic because China has more than 1,000 missiles 
pointed at Taiwan, and the island's defensive capabilities remain 
limited.  It will take years for all the new weapons to be delivered 
and none of them will be used just like those bought in the past 30 
years. 
 
"The US$6.43 billion package is smaller than what Taipei was ready 
to pay for.  The fact that the package includes only five major 
categories of weapons, instead of the requested seven, reflects a 
U.S. realization that chances of military conflicts in the Taiwan 
Strait are diminishing as a result of the new Taiwan government's 
policy of engaging the mainland. ... 
 
"The Bush administration is trying to walk a very thin line between 
supporting Taiwan and enraging China.  Beijing was briefed several 
times about the impending deal. ... 
 
"Washington's timing is good.  It's much better now for the U.S. and 
for China, because China can digest this sale much better now that 
if it were made by the new administration.  It won't have much 
consequence on the next administration. ... 
 
"Washington is unlikely to freeze arms sales to Taiwan, but it is 
concerned about the Ma Ying-jeou government's mainland engagement 
policy. 
 
"The U.S. has its own calculations.  It wants to keep the Taiwan 
market for U.S. arms, as well as cards in dealings with Beijing." 
 
C) "Beijing's New Tune on Arms Sales" 
 
The pro-independence, English-language "Taipei Times" [circulation: 
30,000] editorialized (10/7): 
 
"With a US$6.5 billion arms package from Washington to Taiwan almost 
a done deal now that the US State Department has given its stamp of 
approval, we find ourselves in familiar territory, with Beijing 
expressing its great displeasure and threatening severe 
ramifications for Sino-US relations. ... 
 
"A close reading of Chinese Foreign Ministry spokesman Liu 
Jianchao's comments on the most recent sale, however, reveals a 
subtle change in Beijing's expression of anger.  This time, in 
addition to the usual rhetoric, China argued that 'nobody could 
stop' the 'warming' relations between Taipei and Beijing.  All of a 
sudden, Beijing was casting the US not as an ally of Taiwan, but 
rather as an enemy common to both Taipei and Beijing, one that 
sought to hammer a wedge between the two sides of the Taiwan Strait. 
... 
 
"The other development was Washington's fault, made all the more 
potent for its conspicuous timing. 
 
"Just as news of the arms sale was reaching Taipei, the 
Congressional Research Service (CRS) was warning that Taipei and 
Beijing were perhaps getting too close for the good of the US.  Many 
in Washington had reviled former president Chen Shui-bian for his 
troubling pro-independence stance, which prompted parts of the US 
government to meddle in the lead-up to the March elections and thus 
create an environment that was more conducive to a Chinese 
Nationalist Party (KMT) win. 
 
"Now that this has come to pass, some US officials are beginning to 
wonder whether it was wise to discredit the pro-independence 
faction. The same CRS report even argued in favor of helping 
strengthen the Democratic Progressive Party (DPP) to ensure solid 
opposition to the KMT. ..." 
 
D) "US Arms Sales and the 'Status Quo'" 
 
Yu Tsung-chi, a senior fellow at the Atlantic Council in the United 
States, opined in the pro-independence, English-language "Taipei 
Times" [circulation: 30,000] (10/5): 
 
"... Because cross-strait tensions are thawing and a confrontational 
scenario is very unlikely, the reasoning goes, there is no urgent 
need for defense procurements now, if ever.  This further leads to 
the sanguine view that a balance of power may not be necessary in 
the Taiwan Strait. 
 
"This line of thinking may be persuasive in the short term, but it 
is not necessarily so compelling from a long-term perspective. 
Washington should not ignore the fact that the mechanics of 
maintaining the status quo are based on a permanently ambiguous 
RELATIONS, U.S. FINANCIAL CRISIS 
 
dual-deterrent strategy toward Beijing and Taipei. 
 
"Any haphazard tilting toward either side will sabotage this dynamic 
equilibrium, which has endured so successfully between Washington, 
Beijing and Taipei over the past decades. ..." 
 
¶4. U.S.-Taiwan Relations 
 
A) "Obama, McCain Camps Impact on Taiwan" 
 
Liu Shih-chung, a visiting fellow at the Center for Northeast Asian 
Policy Studies at the Brookings Institute in Washington, opined in 
the pro-independence, English-language "Taipei Times" [circulation: 
30,000] (10/7): 
 
"... However, leaders from the Chinese Nationalist Party (KMT) and 
the Democratic Progressive Party (DPP) should take into 
consideration new dynamics that will be attached to the US-China 
relationship after the election, no matter who becomes the next US 
president. 
 
"First, unlike the ongoing disputes between Washington and Beijing 
over issues such as Taiwan, human rights and trade, both sides have 
established a closer partnership in the past decade, engaging in 
multi-lateral and high-ranking dialogues.  China's diplomatic 
lobbying on Capitol Hill has put tremendous pressure on Taipei's 
relations with Washington. 
 
"Moreover, the next US president will inherit a 'fragile, 
reconstructing but uncertain' US-Taiwan relationship.  For the KMT 
and President Ma Ying-jeou's administration, the warming of 
relations across the Taiwan Strait following the resumption of 
cross-strait talks and the expansion of chartered flights and 
Chinese tourists visiting Taiwan has won high praise from 
Washington. 
 
"However, both the Obama and McCain camps have been closely watching 
Ma's rollercoaster ride in terms of ebbing and flowing domestic 
support, his failure to gain the country economic leverage after 
opening to China and his lack of determination in enhancing Taiwan's 
military capabilities. 
 
"How the Chinese react to Ma's bid for observer status at the World 
Health Assembly (WHA) in May under his new 'cross-strait diplomatic 
truce' strategy constitutes the major challenge to Taiwan's 
rapprochement with Beijing. 
 
"What's more intriguing is that a 'cross-strait cross-fire' would 
likely flare up at the mid-point of the next US president's 
administration.  Can the US play a pivotal role in convincing 
China's leaders to give concessions to Ma?  Can the next US 
president handle a confrontation between Taipei and Beijing if China 
continues to slap Taiwan in the face by blocking it from joining the 
world heath community? ..." 
 
B) "Taiwan's Big Picture in the U.S. Campaign" 
 
The pro-independence, English-language "Taiwan News" [circulation: 
20,000] editorialized (10/7): 
 
"... Both McCain and Obama promise to continue Washington's 'one 
China policy' based on the three communiqus signed with Beijing and 
the 1979 Taiwan Relations Act and have recognized the reality and 
significance of China's rise and accepted the need for Beijing's 
cooperation on various issues ranging from North Korea to 
anti-terrorism and climate change. ... 
 
"Their logic seems to be simply that Obama needs the PRC as a 
strategic partner and Taiwan should not become a stumbling block to 
U.S.-China engagement.  While some Taiwan pundits believe a McCain 
administration would be more favorable for Taiwan in terms of 
providing security reassurance, it should be recalled that similar 
expectations were entertained regarding Bush, who instead adopted 
the above stance and eventually promoted 'regime change' against the 
'trouble-making' former Democratic Progressive Party administration 
and has sat on promised arms sales to Taiwan. 
 
"There are no certainties that Republican neoconservatives under 
McCain would be any more likely than a Obama presidency to stand up 
for Taiwan's security needs or support Taiwan's need for diplomatic 
and international space. 
 
"Moreover, the inability of the McCain campaign to face up to the 
reality of the global financial crisis or the global climate crisis 
or to confront the need to repudiate Bush on Iraq hints that the 
world will face four more years of paralysis in Washington on the 
most fundamental issues facing the world economy, environment and 
security, four years that neither the world or Taiwan can afford. 
RELATIONS, U.S. FINANCIAL CRISIS 
 
 
"Hence, with Obama's hopes on the upswing, the Ma administration 
must be prepared to respond to a Democratic administration's shift 
in priorities to fair trade, global financial re-regulation and 
regional engagement and firmly work with the next U.S. 
administration to ensure balance in cross-strait relations. ..." 
 
¶5. U.S. Financial Crisis 
 
A) "U.S. Leadership is Intact" 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (10/7): 
 
"The meltdown on Wall Street is only part of a large meltdown, and 
the US$700 billion bailout plan is only one attempt at a fix. ... 
 
"In Asia, the weakness of the dollar, the piling up of public debt 
and the huge accumulation of gold and dollar reserves in central 
banks are all clear signs that the world has changed radically. 
 
"Wall Street has been dethroned.  The very American technological 
know-how and genius that gave the U.S. its predominance has been 
used to bring about its downfall. 
 
"The true sources of power and influence in the world have shifted, 
both geographically and politically, thanks to the vast impact of 
the information and communications revolution, but this obvious 
message has until now strangely eluded political leaders in the 
West, and especially in America and Western Europe. ... 
 
"The concept of the single superpower left bestriding the world 
after the collapse of communism (and the supposed end of history) is 
no longer valid.  A more multi-polar world is emerging, though one 
in which America remains the leader, since the U.S. is still the 
mightiest." 
 
B) "Financial Storm Provides Epiphany for the U.S." 
 
The conservative, pro-unification, English-language "China Post" 
[circulation: 30,000] editorialized (10/4): 
 
"... The financial storm is not expected to die down any time soon. 
Suddenly, America got the epiphany that de-regulation is to blame; 
that Wall Street needs policing and the financial markets must have 
oversight.  It may take a decade, if not longer, for the United 
States to rebuild its financial markets. 
 
"The current crisis could well change the world's financial order. 
The unipolar financial world dominated by the United States may 
loosen up as a result.  The dollar has been weak, and the U.S. 
national debt has been climbing steadily to close to US$10 trillion. 
 A tri-polar financial order may emerge in Europe, Asia and America. 
 
 
"President Bush, who came into office with a bang eight years ago, 
is certain to leave the White House with a whimper.  It is almost 
certain that he will go down in history as the worst U.S. president. 
 The baseless Iraq war he started five years ago is his legacy, as 
is the Wall Street meltdown, which is being seen as a financial 
9/11. ... 
 
"Hopefully, the financial tsunami on Wall Street can act as a rude 
awakening for the United States.  It will be up to Bush's successor 
to put the house in order and make up for the lost decade by working 
hard to make the country great again.  Will it be Obama?  The young 
Democrat certainly has an edge because a McCain victory on Nov. 4 
would mean a third Bush term - a spooky scenario for many voters." 
 
YOUNG