China missile tests seen as a warning to Taiwan

China missile tests seen as a warning to Taiwan

By Kevin Chen

TAIPEI (Reuter): China's planned missile tests near Taiwan are intended to push this island's "panic buttons" and force it into abandoning a drive for greater international recognition, analysts in Taiwan and China said on Wednesday.

They added that the tests signaled Beijing's patience with what it perceives as Taiwan's increasingly individualist stance might have finally run out.

"China is trying to push the panic buttons of the Taiwanese people to force Taiwan leaders into choosing either a move towards or away from China," said Andrew Yang, secretary-general of the private Council of Advanced Policy Studies.

In an early sign of fear, Taiwan's stock market index lost 4.23 percent on Wednesday and fell to its lowest level in 19 months.

"This is a definite turning point," Yang said of the tests, which are due to run for a week from Friday. The tests are being conducted about 140 km (85 miles) off Taiwan's northern coast.

China and Taiwan, which split after a civil war in 1949, both claim to be parts of one China that will one day reunify.

But radical differences exist over how reunification should be achieved. China maintains Taiwan is a rebel province and should return by submitting to Beijing's authority, much like the British colony Hong Kong will do in 1997.

Taiwan's government, however, wants to be seen as more of an equal and has recently been trying to expand international ties to bolster its standing in its rivalry with China.

"China wants Taiwan to stop pursuing foreign relations so aggressively," said Ben Lee, senior analyst at the Taiwan branch of Nomura Securities.

The strain in relations, now at their lowest point since a thaw began in the early 1980s, started in June after Beijing protests over a landmark trip to the United States by Taiwan President Lee Teng-hui.

Lee's private visit to his alma mater Cornell University in Ithaca, New York, enraged China, which insists Taiwan's government is not entitled to international relations.

It retaliated by indefinitely postponing high-level talks which had been scheduled for July to discuss legal guarantees for Taiwan's investments in China.

But instead of showing contrition, Taiwan added to China's anger by unveiling a plan to gain a seat at the United Nations by offering US$1 billion in donations for developing nations.

It further inflamed Beijing by sending Premier Lien Chan to Europe, establishing diplomatic ties with Gambia, in Africa, and repeatedly calling for China to recognize Taiwan as a "political entity" separate from Beijing.

"The more the Taiwanese government ignores previous warnings, the more the Chinese government will escalate the warnings. Now, the warning is at a high point," Nomura's Lee said.

"China wants (Taiwan's ruling) Nationalist Party to make clear that it does not support any form of two-China or Taiwan independence policies," Lee added.

In Beijing, political analysts said that China is aiming to scare the Taiwanese people and force President Lee and the rest of the government into a political retreat.

"(China) wants to spread nervousness among the business community in Taiwan, because this will put pressure on Lee Teng- hui to ease off on raising Taiwan's international profile," one analyst said.