VZCZCXYZ0015
RR RUEHWEB

DE RUEHIN #0063/01 0150941
ZNR UUUUU ZZH
R 150941Z JAN 09
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0752
INFO RUEHBJ/AMEMBASSY BEIJING 8881
RUEHHK/AMCONSUL HONG KONG 0333

UNCLAS AIT TAIPEI 000063 
 
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: OBAMA ADMINISTRATION, CROSS-STRAIT 
RELATIONS 
 
¶1. Summary:  Taiwan's major Chinese-language dailies focused January 
15 news coverage on the Taipei District Prosecutors' Office's search 
of the Presidential Office Wednesday and the arrest of two 
Presidential Office staffers for allegedly spying on behalf of 
China; and on the Control Yuan's decision Wednesday to impeach two 
former high-ranking government officials over a diplomatic scandal 
involving Papua New Guinea.  In terms of editorials and 
commentaries, an editorial in the pro-unification "United Daily 
News" discussed the global economic crisis and the possible 
emergence of international protectionism.  The article said that 
whether the new U.S. President Barack Obama will take large strides 
toward protectionism deserves close observation.  An op-ed in the 
pro-independence, English-language "Taipei Times" discussed the 
Taiwan policy speech recently delivered by Chinese President Hu 
Jintao, in which he mentioned the idea of building a cross-Strait 
military confidence-building mechanism.  The article concluded by 
saying, "Taiwan should work with the U.S. in any trilateral military 
dialogues."  End summary. 
 
¶2. Obama Administration 
 
"Is International Protectionism about to Emerge?" 
 
The pro-unification "United Daily News" [circulation: 400,000] 
editorialized (1/14): 
 
"... As a result, the Israeli-Palestinian issue will be the first 
quiz on international issues for Barack Obama when he assumes 
office, and whether he will move drastically toward the direction of 
protectionism will be his first test in economics.  The fact that 
'Business Week' in the U.S. has been featuring such an issue [i.e. 
Obama and protectionism] as its cover story over the past few weeks 
shows that one should not underestimate its importance; in 
particular, trade issues between the United States and China deserve 
[our] close attention. 
 
"The United States has been in favorable circumstances over the past 
twenty-five years; its imports have drastically increased from 
constituting 9 percent of the U.S.' GDP to 18 percent. 
Correspondingly, the employed population in the U.S. manufacturing 
industry has declined from 17 million to 13 million over the past 
twenty-five years.  According to the U.S. statistics, the market 
share of China's clothing business is now over fifty percent and, 
while approximately a dozen of major U.S. steel plants were closed 
recently, one after the other, China's exports of steel pipe to the 
United States are growing each month.  These are all the examples 
cited by the liberals who advocate protectionism.  Since Obama 
himself has previously expressed a tendency to move toward 
protectionism in terms of automobiles from South Korea and products 
made in China, how he will deal with the conflicting issues of free 
trade and resolving the unemployment problem will be closely watched 
by everyone.  In addition, Obama said rescuing the economy should 
trump the budget fight -- an effort that will cause government debt 
to reach US$1.2 trillion in 2009.  Washington has also repeated many 
times its demand that China and petroleum exporting countries move 
their foreign exchange reserves to help with the economic lacunae of 
the United States. 
 
"Will the United States use protectionism as a tool to exercise 
pressure on foreign reserves at some point?  Or will [Obama] be held 
on a short leash by the liberals and eventually resort to 
protectionism?  These are trends worthy of close observation.  Once 
a protectionism policy is implemented, a global economic storm will 
certainly ensue and worsen and no one, including Taiwan, will be 
able to escape by sheer luck.  This is the reason why we must watch 
[this trend] closely!" 
 
¶3. Cross-Strait Relations 
 
"A Closer Look at Hu's 'Six Proposals'" 
 
Yu Tsung-chi, a senior fellow of the U.S.-based Atlantic Council, 
opined in the pro-independence, English-language "Taipei Times" 
[circulation: 30,000] (1/15): 
 
"...  Hu's six-point proposal is a response to Ma's policies, which 
appear to be accepting China's ultimate goal of eventual 
unification. ...  However, issues such as military 
confidence-building mechanisms are very sensitive, as they touch on 
Taiwan's sovereignty and national security. Given the dissensions on 
'one China' within Taiwan and the possibly negative impact on 
bilateral relations between Taipei and Washington, Taiwan should be 
cautious and patient before responding.  To prevent possible 
reactions at home and aboard, Taiwan's military interactions with 
China must be openly negotiated between China and Taiwan, between 
Taiwan and the US, and between China and the US. The existing US 
arms sale policy to Taiwan should not be affected by improving 
cross-strait military relations. Taiwan should work with the US in 
RELATIONS 
 
any trilateral military dialogues. In particular, Taipei should 
consult with Washington on how to construct a durable 
confidence-building mechanism without impairing its national 
interests because, unlike Beijing, Taiwan doesn't have much 
experience in negotiating military issues. 
 
"Taiwan should also establish measures to prevent divergent 
viewpoints from further polarizing and debilitating the nation. 
Confidence-building mechanisms can only reduce the risk of war -- 
they cannot guarantee against war.  Taiwan should not disarm 
psychologically if China decreases the number of missiles targeting 
it. After all, China holds all the cards in terms of the missiles. 
Removing them would be purely symbolic as they could easily be 
redeployed overnight." 
 
YOUNG