By Tiffany Wu
TAIPEI (Reuters) - Brushing aside a warning from George W. Bush, Taiwan's president reiterated his plan to hold a referendum alongside elections next March, but said neither independence nor the status quo with China would be at issue.
Chen Shui-bian, addressing a news conference on Wednesday after Bush delivered his surprise warning during a White House visit by Chinese Premier Wen Jiabao, did not say what the referendum would be about.
But earlier he suggested it would pressure China to remove missiles aimed at the island, which Beijing sees as a breakaway province that must one day, even by force, be returned to the fold.
"We want to show China and the world that military force cannot be used to solve the problem of the Taiwan Strait," Chen said after the Democratic Progressive Party officially confirmed him as its presidential candidate for the March 20 election.
"Taiwan people have the right to say loudly that they oppose missiles and are for democracy, oppose war and are for peace," he said. "This is nothing to do with independence. There is no intention to change the status quo."
Chinese Premier Wen, who sat alongside Bush when he made his remarks at the White House on Tuesday, welcomed what amounted to a nuanced hardening of the usual line that the United States does "not support" independence moves by Taiwan.
Taiwan's supporters in the United States expressed concern, but the island's financial markets took Bush's comments mostly in their stride. The main stock index slipped less than one percent, mostly due to a fall on NASDAQ. The local dollar was firm.
"INDEPENDENT SOVEREIGN COUNTRY"
In comments to a group of U.S. lawmakers within hours of Bush's message, Chen said earlier the island's first referendum would be aimed only at avoiding war with China, its diplomatic foe since the end of the Chinese civil war in 1949.
"The topic of the defensive referendum ballot is very simple, very concrete and very important," Chen said. "We demand the opposite side to dismantle their missiles and publicly renounce the use of force against Taiwan. And our defensive referendum also aims to avoid war and eliminate the people's fear."
Chen said he supported the status quo with China, which sees the referendum as a cover for separatist moves.
"Taiwan is an independent sovereign country," he said. "We urge the international community not to take for granted China's military threat and deployment of missiles."
Bush, in a meeting with China's Wen, said the United States opposed 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," Bush said.
Wen, who came seeking reassurances the United States would do something to rein in Taiwan, welcomed Bush's comments. Political analysts said in his heart of hearts he was most probably elated.
"We very much appreciate the position adopted by President Bush toward the latest moves and developments in Taiwan, that is, the attempt to resort to referendum of various kinds as an excuse to pursue Taiwan independence," said Wen, who is No. 3 in the Chinese Communist Party hierarchy behind President Hu Jintao and parliament chief Wu Bangguo.
Some political pundits predicted China would now show restraint, others that Chen might have to back-peddle.
"China has pocketed what it wanted," one Western diplomat said. "I don't think there will be any need now for them to up the ante in their rhetoric or, indeed, maybe even repeat some of the statements they've made previously."
Daniel Chen, head of research at SinoPac Holdings, said the referendum was an election tactic. "Taiwan won't dare to be too extreme, which means he may have to revise the referendum topic," he added.
Chen Yuchun, professor at Taiwan's Chinese Culture University, agreed.
"It will be hard for Chen Shui-bian to back down or he will lose face before the election. But under pressure from the U.S. and China, he may conduct a referendum on a different topic and not mention the missiles," he said.
"He may pick a softer issue to vote on, such as a ballot saying Taiwan is pro-peace."
Washington switched diplomatic recognition from Taipei to Beijing in 1979, but remains the island's main arms supplier and trading partner.
The United States sent aircraft carrier groups to waters near Taiwan in 1996 when China menaced the island of 23 million with war games and missiles tests in the run-up to presidential elections.
Taiwan's Minister of Foreign Affairs, Eugene Chien, said he saw no change in U.S. policy toward the island despite Bush's comments.
"The United States' basic stance is the same as in the past. It maintains the 'one China' policy is against any side making a unilateral change in the status quo and wants a peaceful solution," Chien said.
A White House spokesman insisted there had been no change in policy on Taiwan, which Bush vowed in April 2001 to do "whatever it took" to defend. A senior official said Bush was dropping the "ambiguity." (Additional reporting by Brian Rhoads in Washington)