TAIWAN AFTER CHIANG CHING-KUO: A SPECULATIVE ANALYSIS
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Directorate of Secret
Intelligence
`7? 25X1
Taiwan After Chiang Ching-kuo:
A Speculative Analysis
An Intelligence Assessment
State Dept. review completed
Secret
EA 82-10102
September 1982
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Directorate of
Intelligence
A Speculative Analysis
Taiwan After Chiang Ching-kuo:
This assessment was prepared b
Office of East Asian Analysis. Comments and
Chief, Foreign Affairs Branch, OEA~
Intelligence Council.
Secret
EA 82-10102
September 1982
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Secret
Taiwan After Chiang Ching-kuo:
A Speculative Analysis
Key Judgments The death of Chiang Ching-kuo is likely to usher in a collegial, technocrat-
Information available is leadership, a less authoritarian government style, and a more openly
as of 15 September 1982 competitive and pluralistic political life in Taiwan. On balance, we believe
was used in this report.
that Premier Sun Yun-hsuan has the best chance to succeed Chiang, in
large part because the powerful members of the party's standing commit-
tee, who will broker the arrangements, would then have someone who
would depend on them for his power.
The immediate succession probably will be relatively smooth. Differences
over internal and foreign policy issues appear insufficiently contentious to
prompt a challenge to Taiwan's tradition of orderly leadership. Any
combination of Chiang's death with dramatically heightened external
threats or unforeseen internal disorder could, however, prompt the military
or security services to attempt a takeover.
We believe that the new leaders, who will lack the power base and historic
image of Chiang and his father, initially will seek strong expressions of
continuing US support to demonstrate that they can manage relations with
Washington. They will probably continue Taiwan's incremental steps
toward some sort of modus vivendi with China, but they will not accept re-
unification on Beijing's terms. In our view, their effort will be coupled with
an attempt to ensure the island's independent political status, in part by re-
ducing Taiwan's heavy dependence on the United States in the economic
and, over the longer run, in the security area.
The succession will cause problems for Beijing, which has aimed its
reunification initiatives at Chiang and his immediate coterie. We do not
believe that Beijing has fully developed its options for dealing with
Chiang's successors and the recent open letter from the Chinese to Chiang
stating that "time is not on our side" reflects the Chinese belief that the
passing of the elder generation on both sides will make reunification
increasingly difficult.
The new leadership will be judged, especially in the immediate succession
period, by its ability to manage the economy successfully, to retain the
support of the security and military forces without accepting their more
hardline policy views, and to maintain the momentum toward political
iii Secret
EA 82-10102
September 1982
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liberalization. The advanced age and fragile health of the new leadership,
however, will make them a transitional grouping. In our view, the
leadership on Taiwan five years later could be composed of considerably
younger, more cosmopolitan officials whose political allegiance to the
Chiang family's legacy on a wide range of policy issues will be even more
tenuous.
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Taiwan After Chiang Ching-kuo:
A Speculative Analysis
The Formal Succession
President Chiang Ching-kuo's death before 1984,
when his term expires, would bring Hsieh Tung-min,
the 75-year-old Taiwanese Vice President, to the
presidency under Taiwan's constitutional process. As
with Yen Chia-kan, who succeeded Chiang Kai-shek
after the latter's death in 1975, we expect Hsieh
would serve until the next election in 1984. Hsieh's
power would not be commensurate with his position.
Premier Sun Yun-hsuan, who is also president of the
Executive Yuan, would play the pivotal decisionmak-
ing role-the pattern observed from 1975 until the
presidential elections in 1978, when Chiang Ching-
kuo ran Taiwan from the premier's office.
While there could be some nervousness among the
armed forces about their ability to function effectively
in time of crisis with a figurehead president acting as
commander in chief, we believe this interim solution
would be generally acceptable. Sun could, of course,
believe that without Chiang Ching-kuo's family man-
tle, his personal stature would be insufficient to
enable him to run Taiwan as Premier. If so, and if
Hsieh could be induced to step down, the constitution
provides for special elections for the president and vice
president, with the premier designated as titular
authority in the interim.
If he lives until 1984, Chiang will have a full range of
political options to manage the succession. Most
obviously, he could run for reelection and install
Sun-or another designated successor-as his vice
president, to ease his heir's way to power. Alternative-
ly, Chiang could step aside to allow his nominee to
run for the presidency. The handpicked and politically
housebroken nature of Taiwan's electoral college,
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which was selected during the late 1940s on the
mainland, would ensure that succession mechanics
worked smoothly. In any event, Chiang has sufficient
authority to prevent either arrangement from being
contested.
? The economy.
political institutions.
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Any new leadership will be forced to address four
major policy areas that have prompted disagreements
in the past:
? The link with the United States.
? National security and foreign policy, including the
relationship with China.
? Domestic political stability and the evolution of
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Chiang's successors will have little scope for initiative
in dealing with the United States, China, and defense
issues. On the domestic scene, the latitude for their
policies will be the widest, correspondingly offering
them the chance to have the most direct impact.
Policy Toward the United
States and China
The historic desire to maintain close economic, politi-
cal, security, and technological ties to the United
States will continue to dominate Taiwan's foreign
policy. We expect that no leader or group will chal-
lenge this linkage, although there will be disagree-
ments about how best to manage it. At the same time,
however, the leadership will probably continue Tai-
wan's effort to reduce what many in Taipei see as
excessive dependence on the United States. We would
expect to see, for example, further diversification in
trade and technology acquisition.
The differences over how best to deal with Washing-
ton-the continuing dispute about Taipei's tactics
since the US recognition of Beijing-are more seri-
ous. Because virtually everyone within the leadership
distrusts the United States to some degree, Taiwan
has sought repeated reassurances about US inten-
tions. We believe Chiang's successors will follow suit,
both to build their self-confidence and to demonstrate
to their domestic audience that they can manage the
US relationship successfully.
This need, moreover, may lead Taiwan to loosen
current strictures on public discussion of the relation-
ship, as they were loosened during 1979 and 1980.
Further impetus in that direction will come from
those within the leadership who managed relations
with the United States during that period, and who
have argued that more aggressive public activities,
including attempts to capitalize on Taiwan's long-
standing political and commercial ties in the United
States, would check the pace of development in US-
China relations.
National Security
Any new leadership will maintain a strong military
deterrent and remain unpersuaded that close US-
China relations reduce Taiwan's military needs. In-
deed, a new leadership might initially try to portray
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Chinese intervention as more likely in an attempt to
prompt a US warning to Beijing against such a move,
as well as to rally the populace.
Assuming no major changes in US policy toward 25X1
Taipei, we believe Chiang's successors will probably
also continue to move toward some sort of modus
vivendi with China that falls short of accepting
reunification on Beijing's terms. Taipei will refuse to
recognize Chinese sovereignty over the island, or to
negotiate with Beijing, but may take additional steps
toward lessening tensions and reducing hardline rhet-
oric. These steps could include further relaxation on
trade with or travel to China, or more innovative
gestures, like the decision this year to invite a Chinese
team to participate in a softball tournament on Tai-
wan. Taiwan's long-term goal of achieving a "one
nation, two sovereignties" solution-along the lines of
the two Germany-will, in our view, be maintained.
Beijing's View
The passing of Chiang Ching-kuo will be a significant
problem for Beijing, where the leadership has charac-
terized Chiang as the last individual on Taiwan with
the authority and prestige to reach a unification
agreement. In July, Liao Chengzhi, vice chairman of
China's National People's Congress, conveyed Bei-
jing's apprehension about the political consequences
of Chiang's health in a letter addressed to Chiang,
asking him to move on the reunification question
before it was too late. Liao expressed "concern" over
Chiang's recent illness and tied his hopes for reunifi-
cation to the actions of the "elders" on both sides of
the Taiwan Strait.
We do not believe that China has seriously looked
beyond Chiang Ching-kuo to determine its specific
options in dealing with a successor. Thus far, the
Chinese have not put forward
any proposals that would appeal to the leadership and
popular opinion on Taiwan after Chiang.
Beijing has only begun to
consider the likely relationship between a succession
in Taiwan and reunification
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If Chiang were to begin turning over the reins of
power to his successors before his death-by design or
because of incapacitation-we believe Beijing might
offer new proposals in the hope that Chiang could be
induced to respond favorably before his demise. In-
deed, Beijing would almost certainly echo the tone of
Liao's letter by proposing that Chiang cap his career
with such a "patriotic" act. Beijing has other op-
tions-it could increase pressure by means of military
activity in the Taiwan Strait or return to more
militant rhetoric-but we believe that the Chinese
recognize that such steps would play into the hands of
the successors, who could use them to rally popular
support for continuing refusal to negotiate.
Problems arise for Beijing if a native Taiwanese
becomes president-a succession that would happen if
Chiang died now and one that could occur as a result
of the 1984 elections. Beijing chose to make its pitch
to the mainlander leadership on Taiwan some time
ago, stressing their common experiences and under-
standable longing for their native land. We believe
that native Taiwanese would not be susceptible to this
type of blandishment, nor would the increasingly
Taiwan-oriented government that is likely to result
after Chiang's death.
Domestic Politics
Whether and how to continue Chiang's movement
toward political liberalization and the concurrent
"Taiwanization" of the government probably would
be the most explosive issue for his successors. Discus-
sions between members of the government on Taiwan
and US officials have disclosed that there is already
debate in Taipei on the speed of this process. The
absence of any precise reading on the likely strategy
that the political opposition might adopt during and
after the succession has also been noted by US
officials as a factor that complicates predictions. F_
The native Taiwanese, who constitute 85 percent of
the island's population, are represented on the power-
ful Kuomintang (KMT) Central Standing Committee
with nine of the 26 seats, although only a few of the
nine are considered as "real" Taiwanese (see the
appendix). The remainder are viewed as "half Tai-
wanese," since their careers were tied to the KMT on
the mainland before 1949. Other figures, such as Li
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Teng-hui and Lin Yang-kang, who are popular de-
spite their decision to play by the KMT's rules as
elected politicians, will, we believe, help to mitigate
resentment among the native Taiwanese, but the
period immediately after Chiang's death is likely to be
unsettled.
The political opposition is currently in the hands of
moderates, who believe that time is on their side; they
say that the Taiwanization of the regime will contin-
ue, and that as long as the opposition behaves circum-
spectly, it will eventually come to power. We believe,
however, that the moderates will pressure the leader-
ship to continue Chiang's liberalization policies and
that they may demand to be consulted during the
succession period.
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Moreover, the moderates have controlled the opposi-
tion only since 1980, when more radical leaders
concluded that the government had been so weakened
by the US recognition of Beijing that they could
confront it directly. That confrontation resulted in a
tough government crackdown and the arrests of many
radical Taiwanese leaders. Similar arguments within
the opposition are possible following Chiang's death.
but, in our view, a decision to use the same tactics 25X1
would prove to be a serious miscalculation. We believe
the security services would respond immediately and
effectively to any challenge to the regime. An initially
weak or uncertain government might also allow the
security apparatus greater latitude than they now
possess and, as a consequence, countenance a harder
crackdown.
The Economy 25X1
A new leadership would ease its way to full political
acceptance if it could successfully manage the econo-
my. In the past, high rates of economic growth
accompanied by a sustained government effort to keep
rural and urban wage scales roughly in step have
helped hold Taiwan's society in political and social, as
well as economic, balance. As one consequence, most
of the large and growing Taiwanese middle class
remains apolitical and more concerned with further
material gains than with political freedoms.
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We expect Chiang Ching-kuo's death to trigger some
capital flight and nervousness among foreign and
domestic investors. When problems have occurred
before, the government has adopted a skillful ap-
proach. Following the changes in US policy toward
China in 1972 and 1978, for example, the government
immediately moved to hold down the price of black-
market dollars to prevent a currency panic, and
marshaled its propaganda resources effectively to
-assuage investors about the continuity of policy.
Moreover, the government has been moving quietly to
define its legitimacy in terms of its overall economic
and political performance. We expect the new leader-
ship, lacking the Chiang name, will be even more
dependent on this approach.
Chiang's successors will be anxious to implement a
number of social and economic programs designed
solely to underscore their commitment to the people:
We would expect to see increased government action
in areas such as unemployment insurance or social
security, as well as movement on the long-overdue tax
reform. Given the high cost of such programs, the
leadership will have to take care to avoid raising
apprehensions about the budget-and the political
future-among the regular military, who are also
embarked on a costly program to reduce Taiwan's
dependence on the United States for arms and weap-
ons technology. It is not clear how a new leadership
will reconcile these conflicting demands.
Taiwan's economy has been buffeted recently by the
world recession, and particularly by the softening of
demand for its exports in the critical US market.
While we expect that Taiwan's growth rates will pick
up as the economies of its major export markets
improve, Taiwan is at an important juncture. The
successors will have to oversee what we believe will be
a successful program to switch from labor-intensive to
skill- and technology-intensive exports in order to
guarantee that the island's exports will continue to be
competitive.
The ]End of an Era
Chiang Ching-kuo's death will end his family's con-
trol of the Kuomintang, as well as of its state and
military organizations, a control that has existed since
the 1920s. Chiang Wei-kuo, reportedly the half broth-
er of Chiang Ching-kuo, has a poor reputation on the
The Kuomintang, reorganized in 1922, was con-
sciously modeled after the Soviet Communist Party
and remains so today. Chiang Ching-kuo is party
Chairman, in addition to being president of the state
apparatus. There are no vice chairmen. Policymaking
power resides in the Central Standing Committee (see
the appendix), which is equivalent to a Politburo, and
in six subcommittees of the party's Central Commit-
tee. The Secretary General, Chiang Yen-shih, is
responsible for day-to-day management of party
affairs.
island and has held few substantive positions during
his career. His performance as officer in charge of
Taiwan's military logistics has been unremarkable.
Given his low repute, we believe political groups
would be unlikely to turn to him, even as a figurehead.
Chiang Ching-kuo's children are also not positioned
as succession candidates. Chiang has failed to groom
them and has kept their hands far from the levers of
power. Among the Chinese, they are also not well 25X1
regarded
The Succession Process -
After Chiang's death, we believe that the 26-man
Central Standing Committee (CSC) of the Kuomin-
tang-the ruling party's highest decisionmaking fo-
rum-will become the most powerful political body on
the island. Chiang has carefully tailored this group-
composed of representatives of the military, security
services, senior party bureaucrats, the KMT old
guard, technocrats, business leaders, and the media-
to function as the key political forum in the succes-
sion. One of Chiang's aims in creating such a widely
representative collegial body, in our view, was to limit
the danger of subsequent challenges to the succession
process. We believe that the political stature of the
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Committee will enable it to exercise de facto control
over Taiwan during an interim succession period.
Ultimately, it will also be able to legitimize the
succession arrangements.
Major Power Holders: Sun Yun-hsuan and Wang
Sheng
Chiang's passing before 1984 would leave Premier
Sun Yun-hsuan, 68, as the most powerful civilian
official on the island, although he would not inherit
the full extent of Chiang's own political strength.
Despite his wide following in the KMT, we believe
that many of Sun's supporters are aligned with him
because of shared views and a coincidence of interests
in the short run, not because of longstanding and, in
the Chinese political context, far stronger personal
ties.
As Premier, Sun has control-in formal and real
terms-over the Cabinet.
(Last year Chiang
used a shakeup of the Cabinet and the election of a
new party central committee to strengthen Sun's
position in both organs. Chiang in fact has allowed
Sun to increase his visibility by making more major
policy speeches.
In our view, however, Sun has not shown himself so
far to be a strong leader. During the six months of
Chiang's convalescence, when the President had a
sharply reduced workload, Sun did not assert himself
politically or take the lead to solve pending policy
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Sun Yun-hsuan is a longtime associate of and adviser to President
Chiang Ching-kuo. A highly regarded technocrat and a trained
electrical engineer, he has had wide-ranging economic responsibil-
ities during his career. He appears to be Chiang's choice as
successor, but his political influence may be inadequate to control
Sun plays the key role in economics and communications in a
government that places heavy emphasis on economic expertise. He
believes that economic stability is the key to political stability. He is
a strong proponent of minimum government economic controls and
is an advocate of the free enterprise system. He has long recognized
the necessity for close economic links to the United States. 25X1
Dynamic and determined, Sun drives himself and his staff to
accomplish as much as possible in the shortest time. US officials
have found him to be an able and honest man dedic-A } ' the
concept of public service.
speaks fluent English; at one time he also spoke fluent Russian. e 25X6
We believe that Sun, as a political moderate and a
technocrat, would probably be well received by most
members of the Central Standing Committee, who
would be comfortable with a leader who was depend-
ent on them for power. In broader terms, we believe
that the Taiwanese community, the technocrats, and
the business community also would see their best
25X1
hopes realized with the kind of collegial civilian
leadership that would result from Sun's succession. In
discussions with US officials and other foreigners,
these groups have also frequently expressed their
concern about maintaining strong economic growth
and implied clearly that they fear any threat to the
economy or the investment climate from a contested
or disruptive succession.
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After more than 15 years as the number-two man in the General
Political Warfare Department of the Ministry of National Defense,
Gen. Wang Sheng became director of the department in April
1975. Wang is a longtime associate of President Chiang Ching-kuo
and is a member of the President's inner circle of advisers who
traditionally has been satisfied with important posts in the back-
ground. Wang's efforts to assume more visible positions have been
blocked by strong opponents, including the regular military, who
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While the military is obviously accustomed to the
strong leadership of Chiang and his father, we believe
that they will not make an issue of a civilian, such as
Sun, taking power because of their recognition that
strong opposition could provoke political disarray and
popular unrest. Moreover, Chiang has overseen the
selection of all of Taiwan's top military figures for 15
years, to weed out those who might challenge the
leadership. Finally, the overwhelmingly mainlander
military leadership would have to calculate very care-
fully the willingness of their primarily Taiwanese
junior officers and enlisted men to follow orders that
would involve them in domestic political activities.
We believe it unlikely that the senior commanders
would take the risk, primarily because they have good
reason to doubt that once an intervention began, their
Taiwanese subordinates would remain under their
control.
Wang Sheng and the Security Services
Sun's clearest liability in the longer run, nonetheless,
is his lack of personal support from and direct lever-
age over the military and security services. Chiang
Ching-kuo came to power following a career in vari-
ous security and intelligence organizations, as well as
a stint as Defense Minister. The personal ties built up
over the years enable Chiang to influence the services
and also provide the military establishment with
direct access to the President's office.
In his present post, Wang has the primary responsibility for the
military political cadre system, which was originally instituted by
Chiang Ching-kuo, as well as troop morale and the overall political
graduated from the Central Military Academy with the 16th class
in 1939, although this is not confirmed. In 1944 he attended the
Central Political Staff College (in the first class of the Research
Department) under Chiang. In 1948 Wang went to Shanghai to
assist Chiang Ching-kuo in his brief, unsuccessful effort to main-
tain the value of China's currency. During the 1950s, Wang served
in increasingly important jobs in the political warfare field until
1960, when Chiang named him deputy director of the General
Whether Sun can win the confidence and support of
the defense and security services during the succession
period will depend largely on Gen. Wang Sheng, the
powerful director of the General Political Warfare
Department (GPWD). Wang, who claims to be 65 but
is possibly older, controls not only the political com-
missar system in the armed forces, but also-via
supporters and proteges-the Taiwan garrison com-
mand, elements of the media, and the key depart-
ments of the party, including organizational affairs.
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Wang's position as Taiwan's chief political commissar
requires a tough anti-Communist posture toward Chi-
na and an authoritarian stance on domestic order in
Because Wang has always been content to exercise his
extensive power from behind the scenes, we assume
that he would not directly contest the consensus
behind a succession, or put himself forward as a
candidate for the top leadership. Moreover, Wang-
as a career security official-is likely to put a premi-
um on the stability of the regime and, therefore, to
endorse a consensus-backed civilian succession. Who-
ever the actual successor, Wang will remain the
second most powerful man on the island, and retain as
a result effective veto power over most major policy
decisions.
Prospects and Problems
Given the mainlander leadership's unanimous desire
to avoid disruptions that might be exploited by either
the Taiwanese majority or Beijing, we expect the
succession on Taiwan to be peaceful. Even so, the new
leaders will only be transitional. All of the senior
leaders on Taiwan are old
Most
members of the Central Standing Committee, which
will oversee the succession, are in their seventies, and
some are in their eighties.
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We believe the arrangements that evolve will proba-
bly last about five years. After that period, the
succeeding leadership group will be even less interest-
ed in reunification on Beijing's terms. It will probably
also be better educated, more cosmopolitan, and less
security conscious than the current leadership.
The economy, as well as the viability of Taiwan's 25X1
major trading partners, remains in our view the key to
an easy succession. The domestic uncertainties that
would be engendered by a faltering economy-partic-
ularly if Taiwan's exports cannot keep pace in the
international marketplace-would seriously compli-
cate the new leadership's political as well as economic
calculations. Taipei has dealt effectively with similar
problems, however, and we believe that Chiang's
successors, many of whom will have strong economic
backgrounds, will quickly generate confidence in their
ability to manage the economy. Nonetheless, even an
otherwise talented and well-respected successor would
face problems if Taiwan's most important markets-
Western Europe, Japan, and the United States- 25X1
remained in a prolonged recession.
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Even with an economic recovery, however, we believe
the successors will-in the short term-need to recon-
cile competing domestic demands for increased social
services with a desire to increase military production.
They will likewise need to balance the demands of the
native Taiwanese for a greater political role against
the leadership's desire to maintain its own power.
Success in these areas is more important than purely
factional infighting, which all on the island are con-
cerned to avoid.
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Appendix
Members of the Central Standing Committee
of the KMT (Elected April 1981, Listed in Rank Order)
1.
Yen Chia-kan
1905
Mainland
Former President (1975-78)
2.
Hsieh Tung-min
1907
Taiwan
Vice President
3.
Sun Yun-hsuan
1913
Mainland
Premier
4.
Ku Cheng-kang
1901
Mainland
President, National Assembly
5.
Huang Shao-ku
1901
Mainland
President, Judicial Yuan
6.
Ni Wen-ya
1904
Mainland
President, Legislative Yuan
7.
Yuan Shou-chien
1903
Mainland
National Policy Adviser
8.
Ma Chi-chuang
1912
Mainland
Secretary General, President's
Office
9.
Li Kuo-ting
1910
Mainland
Minister Without Portfolio
10.
Kao Kuei-yuan
1907
Mainland
Former Defense Minister
11.
Sung Chang-chih
1916
Mainland
Defense Minister
12.
Chao Chu-yu
d. 1981
13.
Wang Ti-wu
1913
Mainland
Chairman, United Daily News
14.
Wang Sheng
1917
Mainland
Director, General Political
Warfare Department
15.
Li Teng-hui
1923
Taiwan
Governor, Taiwan Province
16.
Yu Kuo-hua
1914
Mainland
Minister Without Portfolio
17.
Yu Chi-chung
1909
Mainland
Publisher, China Times
18.
Lin Yang-kang
1926
Taiwan
Minister of Interior
19.
Shen Chang-huan
1913
Mainland
Secretary General, National
Security Council
20.
Chiu Chuang-huan
1925
Taiwan
Vice Premier
21.
Hung Shou-nan
1911
Taiwan
Vice President, Judicial Yuan
22.
Tsai Hung-wen
1909
Taiwan
Former Speaker, Taiwan
Provincial Assembly (1973-81)
23.
Lin Chin-sheng
1917
Taiwan
Minister Without Portfolio
24.
Ku Chen-fu
1917
Taiwan
Businessman
25.
Yen Chen-hsing
1912
Mainland
President, Taiwan University
26.
Tsao Sheng-fen
1914
Mainland
Chairman, Central Daily
News
Taiwan
Former Speaker, Taipei
Municipal Assembly
(1969-81)
Approved For Release 2008/09/18: CIA-RDP84SO0554R000100140003-0
Approved For Release 2008/09/18: CIA-RDP84SO0554R000100140003-0
Secret
Secret
Approved For Release 2008/09/18: CIA-RDP84S00554R000100140003-0