China's ultimatum on peace talks angers Taiwan

China's ultimatum on peace talks angers Taiwan
REUTERS

TAIPEI, FEB 22: China’s explosive demand that Taiwan enter peace talks or face attack sparked defiant anger ahead of a March presidential election which hinges on the state of Taiwan-China ties.

The first casualty of Beijing's newly widened threat of invasion was Taiwan's stock market, which at one point fell 3.2 per cent, dragging Hong Kong and other Asian shares with it.

The renewed tensions even hit China's own stock markets.

Taiwan's slide was pared to 1.8 per cent by institutional buying presumably orchestrated by a T 500 billion (US $ 16 billion) state stabilisation fund recently established by parliament for use at just such times of political jitters.

Analysts said Beijing's surprise ultimatum was sure to irk the United States and Japan, Taiwan's best friends despite a lack of diplomatic ties, but because Monday was a US holiday Washington's view was unclear.

Nomura International strategist William Overholt said the move could boost support for US legislation increasing US arms sales to Taiwan and fuel US Congressional opposition to fully normalised US-China trade ties - the key to China's coveted entry to the World Trade Organisation.

Taiwan's own government was conspicuously silent, saying it would comment later in the day.

But Taiwan's presidential hopefuls - who all have campaigned for friendlier China ties - scrambled to denounce Beijing's new threat, issued on Monday in an official `white paper' on Taiwan.

James Soong, who left long service in the ruling Nationalist Party to launch a maverick independent candidacy, responded with indignation and defiance.

``We won't be intimidated,'' Soong said. ``The Taiwan people are not afraid to negotiate but they will not agree to negotiate out of fear.''

the Nationalists' vice-presidential candidate, Premier Vincent Siew, painted Beijing as a sabre-rattling belligerent in comments that appeared linked to the `white paper'.

``Taiwan needs stability. It can't have instability,'' Siew told a rain-drenched campaign rally. ``We need peace not war. We should vote for candidates who can deliver peace and stability.''

In Beijing, the Communist party flagship People's Daily carried all 11,000 words of the newly hardened Taiwan policy.

Mainland political analyst Liu Hong told Reuters the fresh threat did not aim to set a deadline for Taiwan's reunion with the mainland - Beijing's loftiest goal - but to drive home China's impatience to end the half-century-old division.

``It's not today, it's not tomorrow,'' said Liu, a researcher at the Chinese Academy of Social Sciences.

The white paper issued by China's cabinet, the state council, threatened to use ``drastic measures, including military force'' if Taiwan dragged its heels indefinitely on talks.

Until yesterday, Beijing had cited mainly two conditions that would lead to military action - a formal declaration of independence from China or foreign military interference helping to alienate Taiwan from China.

Taiwan, where democracy has blossomed during 50 years of armed estrangement from China, officially espouses eventual union - but only after Beijing embraces democracy.