Taiwan’s Evergreen Marine Corporation (c-al5-01182)

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Classified By: AIT Director Douglas H. Paal, Reason 1.5 b

(U) AIT offers the following information on the questions
raised in ref A regarding the nature of Evergreen’s
relationship with the Chen administration:

A. (C) Evergreen Marine Corporation’s relationship with the
Chen administration is primarily a function of the
relationship between the Chairman of Evergreen Group Chang
Yung-fa and President Chen Shui-bian. Chang founded
Evergreen Marine in 1968 and has maintained close family
control of the firm as well the group’s other entities,
which include EVA Air. Chang has passed the chairmanship
of Evergreen Marine to his third son, Chang Kuo-cheng. His
youngest son, Chang Kuo-wei, is president of EVA Air.

— (C) President Chen’s ties to the company go back to his
days as an attorney. Chen specialized in maritime law in
law school and worked as a legal consultant for Evergreen
on several cases. Chang supported Chen when he ran for
President in 2000. After Chen was elected Chang was named
as one of his senior presidential advisors.

— (C) However, Chang shifted his support to the pan-Blue
camp in the 2004 election with an indirect but clear
endorsement of pan-Blue candidate Lien Chan. Days before
the election, Chang released a statement saying that the
ideal candidate must “be able to build a peaceful, stable
and harmonious cross-Strait relationship.” On May 23,
2004, Chang announced that he would resign as a senior
presidential advisor.

— (C) Chang’s shift in support may be due in part to
Chen’s failure to establish direct shipping links with
the Mainland. In early 2002, Chen administration officials
criticized Evergreen Marine for its decision to flag more
than half of its ships in the UK and Italy to help the firm
penetrate the growing PRC shipping market. On November 5,
2003, Chang gave a scathing speech at the China Marine
College in Taipei, arguing that the Chen administration had
ignored the industry and that Chen himself knew nothing
about shipping.

— (C) Nevertheless, Evergreen’s efforts to distance itself
from Chen are largely the result of pressure from the PRC.
Reports of such pressure emerged immediately after Chen’s
election in 2000. Arnold Wang, President of Evergreen
Marine, recently confirmed to AIT that the PRC applied
pressure to Evergreen, particularly in 2001 when
authorities placed restrictions on the firm that Wang
declined to describe in detail. Wang pointed out that
since the firm had established a more neutral political
stance its situation in the Mainland had improved, noting
that the firm now has 14 liaison offices there.

B. (C) Wang told AIT that Evergreen operates joint East
Asia-South Africa routes with COSCO. Evergreen operates
seven vessels on the routes and COSCO operates two. He
said that starting in May 2006 Evergreen and COSCO will
jointly operate East Asia-U.S. East Coast routes with the
two firms operating six and four vessels, respectively. In
January 2005, Evergreen’s Italian affiliate company, Lloyd
Triestino, announced that it would invest USD 250 million
in two berths at Ningbo Harbor near Shanghai. The Italian
firm had previously invested in Shenzhen harbor in 2003.
In early 2005, Wang told AIT that 70 percent of Evergreen
Marine’s revenue comes from the Mainland China market (PRC
and Hong Kong).

C. (C) AIT defers to U.S. Embassy Panama on Evergreen’s
operations in Panama. Local media have reported that
Evergreen has invested more than USD 100 million in a
marine terminal at Cristobal in addition to investment in
a hotel and restaurant in Panama City.

D. (C) As indicated in section A above, Evergreen confirms
that the PRC applied pressure on the firm to stop support
for Chen Shui-bian. Evergreen’s situation is similar to
that of other Taiwan firms that the PRC perceives to be
pro-independence as described in refs B, C and D. AIT does
not have information on what support the firm might still
provide to the Democratic Progressive Party behind the