Tensions with China Over President-Elect Depress Taiwanese Markets
DAVID HAFFENREFFER, CNN ANCHOR: Chen Shui-bian, elected Taiwan's next president over the weekend, ending a half-century grip on power by Taiwan's Nationalist Party. Mr. Chen, in the past, has come out in favor of Taiwanese independence from China.</s>DEBORAH MARCHINI, CNN ANCHOR: But the president-elect in the last two days has been softening his stance towards China. Nervousness about tensions with the mainland depressed Taipei's stocks; they closed down two percent, and it could have been worse. The trading relationship between China and Taiwan is crucial for both sides. And for more on that aspect of the story now, we are joined by telephone by CNN's Mike Chinoy in Taipei. Mike, it's good to have you with us. And for starters, there had been a lot of fear that this candidate, having espoused the sort of sovereignty or independence of Taiwan in the past, might invite a strike from China. Does anyone think that that's still likely, given his most recent words on the subject of Taiwanese independence?</s>MIKE CHINOY, CNN CORRESPONDENT: Well, Deborah, there was a lot of heated rhetoric from Beijing in the run-up to this campaign, threatening military action if Taiwan moved towards independence. The Chinese government clearly trying to frighten voters into rejecting Chen Shui-bian. Now that the voters here have ignored Beijing's threats and voted him into office, the Chinese seem to be moderating their rhetoric; the tone since the election has hardly been friendly, I would call it "terse and icy," but it has been very cautious, the Chinese saying they will watch and study carefully what Mr. Chen says and does. And his pronouncements since the election have been very conciliatory. On Monday, here in Taipei, he called for a peace summit with Beijing, and he said that he would even be willing to discuss the issue of one China; that's the thing that most concerns the government in the mainland, and Beijing has said that if Taiwan moved toward independence, it would attack. Mr. Chen qualified that, however, by saying he would be willing to discuss one China as an issue rather than as a principle. Beijing has always said it wants to establish the one-China principle as the basis for negotiations. But what all of this means is that Chen is trying to reach out, trying to move beyond his traditional support for independence for Taiwan, and the critical question is whether or not, as each side jockeys in the wake of the election, they can find some kind of framework or formula that will allow them to begin talking, and that's going to mean both sides moderating their position. Chen has begun that process, and the question now is whether there will be any reciprocal gestures from Beijing.</s>HAFFENREFFER: Mike, is there -- is it your impression that this will likely be and continue to be talking between Taiwan and China alone, or is the U.S. likely to get involved here?</s>CHINOY: The U.S. role in this has been to encourage moderation on both sides. American officials from the unofficial U.S. institute here in Taiwan have been in touch with Mr. Chen. Senior American officials, U.N. Ambassador Richard Holbrooke and others are in Beijing this week. The message on both sides is: cool it and try and get talks under way. The Chinese's government in Beijing, of course, has been very suspicious of the United States during the height of its rhetorical blasts that accuse the U.S. of encouraging Taiwan independence. But in fact, ultimately, this is going to be something that Taiwan and China have to work out, and for both sides, it's very difficult. Mr. Chen has a kind of visceral support for Taiwan independence, and an overwhelming majority of people here, even if they don't favor formal independence, certainly want Taiwan to remain separate from mainland China and certainly don't want to see reunification with the mainland. Now, Taiwan is so much more advanced economically, it's a democracy, and people here say that even though there's a common Chinese heritage, there's very little in common at this stage of the game. So the question is whether they can find a way to bridge the gap enough to talk. Mr. Chen has offered some additional carrots to the Chinese. He's offered to lift restrictions on direct trade and communication across the Taiwan Straits, and he's proposed meetings even before he takes office. And the ball's now, to some degree, back in Beijing's court to see whether the Chinese will find enough of an opening there to respond constructively.</s>MARCHINI: All right, we know you'll keep us posted. CNN's Mike Chinoy, reporting now from Taipei. Search CNN.com CNNSI.com CNNmoney.com The Web