Taiwan hardens stance on Beijing

Taipei -- Taiwan's president, Chen Shui-bian, delivered a highly unexpected New Year's message Sunday, renewing his pledge to press for a new constitution and a continued arms buildup, and warning citizens of investment risks in China and what he saw as the mainland's military threat.

The speech signaled a tougher stance toward China on the part of Chen, who has long favored independence from the mainland, along with a determination to fight his political battles at home on his own terms.

The president had been widely expected to soften his position toward the mainland after the governing Democratic Progressive Party suffered a stinging setback in closely watched municipal elections last month.

Those elections were a measure of increasing public pressure for the government to move toward a reconciliation with the mainland. A number of officials from the opposition Nationalist Party, or Kuomintang, made highly publicized trips to China during 2005, and the party made important gains in the December voting.

Chen had been widely expected to announce policies that reflected these political realities. Newspaper reports had suggested that he would further ease restrictions on direct transport, commerce and postal links between the island and the mainland, which have been cut off since the end of the Chinese civil war in 1949.

In his New Year's message, however, Chen instead made it clear that he would not respond to domestic political pressure by altering policy. Taiwan would insist upon "sovereignty, democracy, peace and parity," he said, "no matter how cross-strait relations develop."

"While Taiwan would never close itself to the world," the president stated in a reference to the growing ties across the Taiwan Strait, "we shall also not lock our economic lifeline."

"Cross-strait economic and trade policies do not seek to fulfill the financial interests of any individual or corporation," Chen said. "Instead, our main interest is Taiwan's sustainable development."

In a move certain to antagonize Beijing, Chen devoted considerable attention to a constitutional revision he has favored since last year. The president has said repeatedly that this proposal is intended to create a more modern political system and not to prepare for formal independence, but Beijing sees Chen's constitutional project as a provocative step toward formal statehood.

In his New Year's message, which was televised live throughout Taiwan, Chen said a new constitution must be approved by the legislature and then be subject to a public vote. That could be done as early as 2007, he said, and the constitution could be formally adopted in 2008, when Taiwan is scheduled to have its next presidential election.

"Should conditions in Taiwanese society become sufficiently mature, who is to say that holding a referendum on the new constitution by 2007 is an impossibility?" Chen said, describing a new document as "an overarching national goal."

"We will harness the collective wisdom and fortitude of our citizens," he said, "to produce Taiwan's new constitution by 2008 - one that is timely, relevant and viable."

Chen also promised to uphold the "Taiwan consciousness" - again in the context of a strong position toward China. Without a clear national identity, he said, "our national security cannot be safeguarded."

Chen highlighted the perceived military threat from China and called for parliamentary passage of a multibillion-dollar arms package.

"Recent reports on the military power of the People's Republic of China, published by the United States and Japan respectively, have made it very clear that China's military development evidently exceeds the reasonable scope of its defense needs," Chen said.

"In the face of such imminent and obvious threat, Taiwan must not rest its faith on chance or harbor any illusions," he continued. "We shall seriously contemplate how our self-defense capabilities can be strengthened and how to effectively respond to the gradual tipping of military power across the strait in favor of China."

Taiwan's opposition parties have blocked the $10 billion arms purchase package, even though the governing party has scaled it down from $19 billion.

The bill, proposed by the Defense Ministry, has yet to win approval by the procedural committee of the opposition-controlled Parliament, a necessary step before it can be heard in the full house.

The bill's latest version calls for the purchase of eight conventional submarines and 12 P-3C submarine-hunting aircraft from the United States over a 15-year period for about 340 billion Taiwan dollars, or $10 billion.

Relations with the mainland have worsened since Chen was elected president in 2000, breaking the Kuomintang's 51-year hold on power. He was narrowly re-elected in 2004.

China's Parliament last year approved a controversial anti-secession law, authorizing the use of military force against Taiwan if the island moves toward formal independence.

Analysts said Sunday that Chen's speech was likely to dampen financial markets, which have been betting on closer economic and trade links across the narrow Taiwan Strait. The speech "indicates mainland policy will be tightening and more conservative," said Li Fang-kuo, an analyst at SinoPac Securities. "It will have a negative impact on the stock market."