US, China exchange concessions

US President George W. Bush and Chinese Premier Wen Jiabao traded key concessions yesterday, with Washington warning Taiwan against moves toward independence and Beijing pledging to address the trade gap.

Mr Bush answered Chinese demands for a statement explicitly opposing Taiwan independence, while Mr Wen said that the US trade deficit, which could hit $120 billion this year by US accounts, was a problem the Chinese government took seriously.

Mr Bush, seated with Mr Wen in armchairs before a fireplace in the Oval Office, told reporters he opposed a referendum Taiwan President Chen Shui-bian has pledged to hold that might point the island toward independence and anger China.

"We oppose any unilateral decision by either China or Taiwan to change the status quo, and the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose," Mr Bush said.

His statement marked a hardening of the traditional US line that Washington does "not support" independence moves by the island, which Beijing regards as a breakaway province that must one day return to the fold.