Taiwan president's gambit may have misfired

Moments after Taiwan President Chen Shui-bian dropped his weekend bombshell, fanning arch-rival China's greatest fears by backing legislation for a referendum on formal independence, he told staff not to worry.

"Wait a few days, this won't be a problem. Some people may have doubts, (but) be at ease," one close aide quoted Chen as saying. "I know what I'm talking about. After a while, you'll understand my goal."

Four days after his boldest statements on independence since taking office in 2000, problems have mounted, doubts abound and - as Chen backpedals - many are still puzzling over what exactly the Taiwan leader was trying to accomplish.

The Chinese dragon predictably breathed fire. Beijing angrily warned Chen that stepping further down the road toward a referendum would lead to disaster.

Taiwan's stock market and currency tumbled for two days. Chen's approval rating dropped to a record low. He surprised the island's closest supporter, Washington.

And cross-Straits trade talks are off for the foreeseable future, to the dismay of businessmen on the island.

It remains unclear whether Chen believed that his comments - to a group of supporters in Tokyo via video link - would pass unnoticed, or that they would stir such confusion in Beijing that policy-making paralysis would result.

Some senior Taiwan officials argue that Chen's remarks were a calculated risk aimed at forcing China to the negotiating table, but analysts say the risk was too great.

Many are simply mystified. "We don't know how to read this," said Hsu Szu-chien, who advises Chen's Democratic Progressive Party on China policy.

Andy Chang, director of the Institute of China Studies at the private Tamkang University, said Chen may be trying to "force a truce with war".

Su Chi, the previous administration's top China policy-maker, accused Chen of trying to poison the cross-Strait atmosphere and avoid talks with China by raising the issue of an independence vote.

Whatever his aims, Chen's popularity rating at home took a beating, falling to a record low 46 per cent compared with over 80 per cent when he took office in 2000, according to a survey by cable news network ETTV.

The website of the Office of the President was inundated with angry messages after Chen said on Saturday that a referendum was a "basic human right" and that in reality there was "one country on each side" of the Taiwan Strait.

China - with batteries of missiles lined up along its eastern seaboard facing Taiwan - warned Chen that he was leading the democratic island of 23 million people towards disaster.

And Chen has been forced into damage control. He swiftly sent Taiwan's top China policy-maker to the United States - the island's main arms supplier and trading partner - to reassure an irritated Washington, not forewarned of his speech, that it did not signal a policy change.

Backing away from the "one country on each side" formula, Chen said in a statement on Tuesday that "equal sovereignty" would be a more appropriate way to sum up his speech.

Yesterday the Defence Ministry, in another apparent effort to defuse tensions, scrapped war games set for next week.

Nevertheless, many of the island's business leaders shook their heads in disappointment at the suddenly dimmer prospects of Taiwan lifting a decades-old ban on direct air and shipping links with the mainland and thus cutting costs and transport time.

Opposition politicians called Chen reckless. Government officials defended him, saying he was frustrated with Beijing's diplomatic bullying, missile deployment, refusal to renounce invasion threats and failure to respond to his overtures.

"There is now a lot of room for improving ties," said an official familiar with China policy who spoke on condition of anonymity.

"But if the mainland's reaction is strong, it only confirms the 'China threat theory' and proves that the mainland is not a land of opportunities."

Some analysts say Chen's gambit may be to force China to the negotiating table as he would be virtually reassured of re-election in 2004 if he could prove to Taiwan voters that Beijing will deal with him.

But one Taipei-based Western diplomat said it was dangerous to try to slip Taiwan into the agenda of the Communist Party's 16th Congress later this year, when the world's most populous nation deals with a complex and emotive leadership succession.

"It's not the time for any Chinese leader to appear weak and be nice to Chen," the diplomat said.

For Taiwan, China's heir apparent, Hu Jintao, is an unknown quantity while outgoing Chinese President Jiang Zemin is the devil the island knows.

"If Jiang stays on, there will be stability between the two sides to a certain extent," said a second official who asked not to be identified. "Compared to other leaders, Jiang is more acceptable and a moderate."