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DE RUEHIN #0637/01 1520948
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FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 1659
INFO RUEHBJ/AMEMBASSY BEIJING 9216
RUEHUL/AMEMBASSY SEOUL 0182
RUEHKO/AMEMBASSY TOKYO 0716
RUEHCN/AMCONSUL CHENGDU 3124
RUEHGZ/AMCONSUL GUANGZHOU 0271
RUEHHK/AMCONSUL HONG KONG 0646
RUEHGH/AMCONSUL SHANGHAI 2576
RUEHSH/AMCONSUL SHENYANG 7072
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000637 
 
SIPDIS 
 
E.O. 12958: DECL: 05/29/2019 
TAGS: PGOV PREL ECON PINR HK CH TW
SUBJECT: SENIOR KMT OFFICIALS ON BILATERAL TIES, DOMESTIC 
POLITICS, CROSS-STRAIT AND TAIWAN-HONG KONG RELATIONS 
 
Classified By: AIT Director Stephen M. Young, 
Reasons: 1.4 (b/d) 
 
¶1.  (C) Summary: In separate meetings with the Director on 
May 26, Taoyuan County Magistrate Eric Chu and Taichung Mayor 
Jason Hu said PRC Taiwan Affairs Office Director Wang Yi had 
made a special effort to give them a good impression at the 
recent Fujian Cross-Strait Forum.  Also, Wang had been quite 
positive about negotiating a cross-Strait Economic 
Cooperation Framework Agreement (ECFA).  Mayor Hu 
characterized his mid-April visit to Hong Kong as a 
breakthrough, leading to an improvement in visa status for 
Taiwan visitors and the establishment of a Taiwan-Hong Kong 
Cities Forum.  Both KMT insiders expected President Ma 
Ying-jeou to become KMT chairman, succeeding Wu Poh-hsiung, 
when the position comes open in September.  Although Ma is 
convinced he can do well as chairman, there could be some 
internal strife in the party after Wu departs.  In the end, 
however, it is Ma's show, Hu stressed.  Noting the plan to 
postpone the Taichung election until 2010 (when the city and 
county are merged), Hu said he may take a year off but hopes 
to run for mayor of the new, enlarged Taichung City next 
year.  Hu also had positive comments about DPP Chair Tsai 
Ing-wen.  End Summary. 
 
¶2.  (C) In separate meetings on May 26, the Director 
discussed domestic politics and cross-Strait developments, 
and bilateral relations with Taichung Mayor Jason Hu and 
Taoyuan County Magistrate Eric Chu, who is also a KMT vice 
chairman.  Jason Hu, a former Foreign Minister and TECRO 
representative to Washington, expressed agreement with the 
Director's observations about the improvement of U.S.-Taiwan 
relations under the Ma administration.  According to Hu, the 
U.S.-Taiwan relationship is now stable and trustworthy, 
without fear of "surprises."  He observed that public 
perceptions about the security environment have improved and 
he believed the U.S. and Taiwan could do more to strengthen 
economic cooperation. 
 
Cross-Strait Developments 
------------------------- 
 
¶3.  (C) Hu said Beijing had specifically asked KMT Chairman 
Wu Poh-hsiung to send Eric Chu to the mid-May Fujian 
Cross-Strait Forum and the Chinese had also asked Honorary 
Chairman Lien Chan to persuade Hu to participate.  According 
to Hu, it seemed clear that Beijing wanted to use the event 
to get to know the next generation of KMT leaders.  PRC 
Taiwan Affairs Office Director Wang Yi was very polite and 
insisted that Hu as well as Chu deliver remarks at the forum. 
 
 
¶4.  (C) Eric Chu noted the Fujian forum had been a huge 
affair with thousands of participants, and the events focused 
on exploring ways to expand economic ties between Taiwan and 
Fujian.  In addition to an uneventful meeting with PRC 
Politburo Standing Committee member Jia Qinglin, there had 
been two small breakfast meetings with Wang Yi.  Wang Yi, who 
was well aware of Chu's close personal connection to Ma 
Ying-jeou, had made an effort to give a good impression and 
he had been very positive about working out an Economic 
Cooperation Framework Agreement (ECFA) with Taiwan this year. 
 (Note: During his meeting with former Foreign Minister Fred 
Chien at the Bo'ao Forum in April, Wang Yi had been critical 
of Ma for being too cautious.  Also, Hu noted that Lien Chan 
had told him PRC Politburo Standing Committee member Jia 
Qinglin had mentioned the objectionable term "unification" in 
front of Chien at the Bo'ao Forum.) 
 
¶5.  (C) Chu said the fourth round of Straits Exchange 
Foundation (SEF) - Association for Relations Across the 
Taiwan Strait (ARATS) talks is likely to be held in December, 
shortly after the local elections.  One Taiwan goal for the 
talks will be to double the number of cross-Strait flights to 
540 per week.  While some lower level PRC officials have 
reacted positively to the idea of Taiwan negotiating FTAs 
with other trading partners after concluding an ECFA with 
China, Chu believed the decision on this issue would have to 
come from the top in Beijing and would not happen right away. 
 
TAIPEI 00000637  002 OF 003 
 
 
 Chu relayed that Minister Mentor Lee Kuan-yew had told him 
earlier this year that Singapore was prepared to negotiate a 
bilateral trade agreement with Taiwan after the cross-Strait 
ECFA was concluded, and he assumed that the cautious 
Singaporeans would have already checked this out with Beijing. 
 
¶6.  (C) If ARATS Chairman Chen Yunlin's visit to Taiwan this 
December goes smoothly, it might be possible to entertain a 
visit to Taiwan next year by Wang Yi, Chu suggested.  Chu 
said he expects President Ma to assume the KMT chairmanship 
when Chairman Wu Poh-hsiung's term ends on September 12, and 
he suggested that Ma will want to phase out the annual 
KMT-CCP talks after the next round is held in July.  Any 
consideration of Ma attending APEC or visiting China in the 
role of KMT chairman would have await Ma's second 
presidential term, Chu said.  (Note: The next presidential 
election will be in March 2012.)  Chu asked the Director 
about his thoughts on PRC Vice President Xi Jinping, who may 
succeed Hu Jintao as PRC president in 2012.  Assuming Xi 
succeeds Hu and Ma is elected to a second term, then Xi, who 
would be consolidating his power, might be somewhat risk 
averse at a time Ma could be hoping for bolder initiatives 
out of Beijing, the Director pointed out. 
 
¶7.  (C) According to Chu, the KMT was pleased there was a 
good turnout for the opposition DPP's demonstration on May 17 
because it would send the signal to China that Ma was doing 
his best in the face of internal criticism of his 
cross-Strait policy in democratic Taiwan.  Chu claimed he had 
slipped in some references to Taiwan's government and 
institutions during his appearance in Fujian, but somewhat 
mournfully noted he had neglected to make any reference to 
"President Ma," as Kaohsiung Mayor Chen Chu had done recently 
in Beijing, to great local acclaim here. 
 
Jason Hu's April Visit to Hong Kong 
----------------------------------- 
 
¶8.  (C) Mayor Hu described his April visit to Hong Kong as a 
breakthrough in Taiwan's relations with Hong Kong.  In 
explaining why Hong Kong had chosen to invite him 
specifically, Hu noted that he had an established 
relationship with Secretary for Constitutional and Mainland 
Affairs Stephen Lam, who is responsible for Taiwan Affairs. 
The results of the visit included Hong Kong's agreement to 
improve the visa status for Taiwan visitors and to establish 
a Hong Kong - Taiwan Cities Forum.  While in Hong Kong, Hu 
said, he made clear his view that China should support the 
improvement of Hong Kong-Taiwan ties.  Hu also told the 
Director he hoped Taiwan, Hong Kong, Fujian, and Guangdong 
could become one of the world's important mega-regions, which 
are centers of productivity and innovation. 
 
¶9.  (C) Hu said he gave several public talks during his visit 
to Hong Kong, and representatives from Hong Kong, Taiwan, and 
the mainland all attended such an event for the first time. 
Professor Lung Ying-tai, a well-known Taiwan intellectual who 
teaches at Hong Kong University, asked Hu to speak at the 
university about the future of the Chinese nation.  Hu said 
he used a poetic phrase in his speech to describe the 
relations between Taiwan, Hong Kong, and the PRC: "New Moon 
(Taiwan), Bright Pearl (HK), and Red Sun (PRC)."  The idea 
was to forget about independence or unification for Taiwan 
but rather to focus on developing proper interaction so that 
the different parties could act in union.  While his speech 
was well received in Hong Kong, Hu said he had not publicized 
it in Taiwan because he was worried the DPP would distort his 
ideas. 
 
KMT Politics 
------------ 
 
¶10.  (C) According to Hu, President Ma is "definitely" going 
to resume the party chairmanship and is confident he can do 
well.  When Ma raised the issue publicly without informing Wu 
Poh-hsiung in advance, however, he angered the incumbent 
party chairman.   Saying Ma is unhappy with the business 
dealings in China by members of SEF Chairman P.K. Chiang's 
family, Hu predicted that Chiang will step down at the end of 
 
TAIPEI 00000637  003 OF 003 
 
 
the year.  Hu did not know whether Wu Poh-hsiung would be 
appointed the next SEF chairman.  Wu Poh-hsiung's son (Wu 
Chih-yang) wants to run for Taoyuan County magistrate, Hu 
noted, and therefore Wu Poh-hsiung has been extremely nice to 
Eric Chu.  Once he leaves the party chairmanship, Wu 
Poh-hsiung could become a target of criticism, and "hell 
could break lose," Jason Hu suggested. 
 
¶11.  (C) According to Hu, there are tensions within the KMT 
between Ma Ying-jeou and Lien Chan, and between Lien Chan and 
Wu Poh-hsiung.  In the end, however, it is Ma's show, and 
Lien Chan will gradually fade away, Hu predicted. Legislative 
Yuan Speaker Wang Jin-pyng is not in the center of the KMT 
picture, he added. 
 
Upcoming Local Elections 
------------------------ 
 
¶12.  (C) Hu said Wu Poh-hsiung and President Ma had tried 
hard to persuade him to run for Taipei County magistrate, 
since he was the only potential KMT candidate who outpolled 
former Premier Su Tseng-chang, the likely DPP candidate if 
the election were held in 2009.  By deciding now to elevate 
the status of Taipei County and postpone the election until 
2010, the KMT has let him off the hook temporarily but may 
well turn to him again next year.  Saying there were also 
many people who thought he should be premier or party 
chairman, Hu said his personal preference was to remain in 
Taichung and run for mayor of the new Taichung City that will 
be created in 2010 when the current Taichung City and County 
are merged. 
 
¶13.  (C) Because the election in Taichung will be postponed 
from 2009 to 2010. his current term as mayor of Taichung City 
will be extended for one year.  Nonetheless, Hu said, he was 
considering stepping down from the mayorship at the end of 
this year, in which case a deputy mayor would serve as acting 
mayor and complete his term.  Hu thought the people in 
Taichung would miss him and that taking a year off would 
enable him to do even better in the 2010 election. 
 
DPP 
--- 
 
¶14.  (C) Although the KMT government is postponing several 
local elections from 2009 to 2010 for its own interests. Hu 
said, the delay is also good for DPP Chair Tsai Ing-wen, 
because the DPP would not do well if all the elections were 
held this year.  Hu believed Tsai was the best person for 
chair of the DPP, which, he said, needs to move more to the 
middle of the political spectrum.  Despite being under 
pressure from radicals within the Green camp, Tsai is doing 
well, he added, and he hoped she can survive. 
 
Comment 
------- 
 
¶15.  (C) Jason Hu (Hu Chih-chiang) and Eric Chu (Chu Li-lun) 
have both been closely linked to Ma Ying-jeou, as reflected 
in the media-coined expression "Ma Li-chiang," which takes 
one character from each of their names.  While Hu is two 
years older than Ma and there have been some questions about 
his health, Chu is a full ten years younger and will turn 48 
in June.  Chu will step down from his current position as 
Taoyuan County magistrate in December after completing his 
second term.  With additional experience, probably in the 
central government, Chu could become a potential successor to 
Ma in the 2016 presidential election, some contacts have 
suggested. 
 
YOUNG