Taiwan's Chen avoids showdown with China

TAIPEI - Taiwan President Chen Shui-bian ruled out any immediate steps toward independence as he began a fresh four-year term, calling for better ties with China in remarks aimed at placating his giant communist neighbour and key ally the United States.

Chen, 53, vowed in his inauguration speech to press ahead with contentious plans to adopt a new constitution in 2008, which Beijing views as tantamount to a declaration of independence. But the feisty Chen said the charter aimed to promote democracy and government efficiency.

"I am fully aware that consensus has yet to be reached on issues related to national sovereignty, territory and the subject of unification/independence," he said after he took the oath of office under a steady drizzle at the presidential palace.

"Let me explicitly propose that these particular issues be excluded from the present constitutional re-engineering project," said Chen, who survived a mysterious election eve assassination attempt to win re-election by a razor-thin margin in March.

Following weeks of political turmoil over Taiwan's disputed elections, China warned Chen on Monday to pull back from a "dangerous lurch toward independence" or be crushed "firmly and thoroughly at any cost".

Since their split at the end of a civil war in 1949, Beijing has viewed Taiwan as a breakaway province that must be returned to the fold.

China has deployed hundreds of missiles pointed at Taiwan and has been building up naval power to back its invasion threats.

In its first reaction to Thursday's inauguration speech, Beijing's Foreign Ministry gave no sign that it was warming to the Taiwan leader.

"Chen Shui-bian's provocative pro-independence activities form the biggest current threat to peace and stability in the Taiwan Strait," the ministry said in a terse statement.

A conflict in the strait would quickly draw in Taiwan's chief ally, the United States, and cause market and geopolitical instability in the region.

Chen said the island was open to any form of future ties with China and did not reiterate his previous stand that Taiwan is an independent, sovereign nation or that the island and the mainland were "one country on each side".

"Leaders of both sides of the Taiwan Strait should have a new way of thinking to resolve future problems," he told a crowd of 200,000 people. "We would not exclude any possibility, so long as there is the consent of the 23 million people of Taiwan."

Chen said Chinese military threats would only alienate the island's people and called for dialogue to boost trade links and ensure the island's political status quo would not be unilaterally altered.

He stressed the need for Taiwan to beef up its self-defence capabilities.

"President Chen has gone as far as he could to extend his goodwill in his speech," said Andy Chang, a China watcher at the private Tamkang University.

"Beijing will not find any excuse to escalate tension, at least for now. But Beijing will remain suspicious of Chen and will continue to watch if his words match his deeds," Chang said.

The stock market was mildly disappointed that Chen did not offer new initiatives to improve ties. The main index fell 0.77 per cent, in line with a regional trend.

Washington, which switched diplomatic recognition from Taipei to Beijing in 1979, has called for dialogue and warned against any unilateral change in Taiwan's political status.

Beijing had no immediate comment.

However, China's warning this week was also couched with an offer of economic, diplomatic and other benefits if Chen embraced Beijing's cherished "one China" policy that Taiwan and the mainland were part of a single nation.

Lien Chan, chairman of Taiwan's main opposition Nationalist Party, who was routed by Chen in the presidential elections, has refused to concede defeat.

Lien has said the election eve shooting that lightly wounded Chen and his vice president may have been staged to win sympathy votes and filed two lawsuits to overturn Chen's victory and seek a new election.

"It's an illegitimate gathering," Lien told about 10,000 protesters, referring to Chen's inauguration.

The Nationalists hung a banner reading: "No truth, no president" on the facade of its Taipei headquarters facing the presidential palace, where Chen delivered his speech.

Scores of opposition protesters held black umbrellas with slogans reading: "Democracy is dead", and briefly scuffled with riot police.

Security was unprecedentedly tight in and around the presidential palace. Chen wore a bulletproof vest and delivered his speech behind bulletproof glass.

A nine-day election recount ended on Tuesday, but courts have yet to rule on the validity of 40,000 questionable ballots. Chen won by almost 30,000 votes.

- REUTERS