Taiwan President Chen Shui-bian, frustrated by an impasse in relations with China, will now focus on fostering a separate identity for the island instead of fresh attempts at better ties, officials and analysts said on Monday.
With Beijing continuing to ignore Chen and his pro-independence government, the president is forced to take a tougher stance towards Beijing, which views the self-ruled island as its own, during the remaining 2 1/2 years of his term.
"He has done what many people in this country wanted him to do, to try to strike a reconciliation with the Beijing authorities. He did not go anywhere," said the official, who is close to the president and spoke on condition of anonymity.
In a move widely perceived as tightening of economic ties with the mainland, Chen said on Sunday the government would adopt a policy of "proactive management and effective liberalisation" in order to protect Taiwan's economic security.
Previously, his administration had followed a policy of "proactive liberalisation and effective management" in favour of economic opening.
Chen also spoke of what he saw as a growing military threat from China and left open the possibility of holding a referendum on a new constitution for Taiwan in 2007. Beijing sees Chen's constitutional re-engineering project as a provocative step towards formal statehood.
Chen's remarks dampened hopes for better ties with China, sending the main stock index down 1.32 percent on Monday. Trying to assure investors, Premier Frank Hsieh said the overall policy towards China remained intact, but the government would have new risk management mechanisms in place.
He said the cabinet plans to use international accounting firms to verify China-based investments and promote legislation to protect Taiwan's sensitive high-tech sector.
"What we have seen in the past is that President Chen over and over again made compromises, tried to offer a more flexible stance towards the Beijing authorities," the official said. "What he got in return was one punch after another from Beijing," said the official, referring the passage of an anti-secession law by China's parliament and visits by Taiwan opposition leaders to the mainland last year.
Taiwan's top policy-making Mainland Affairs Council blamed Beijing for worsening relations, saying China's military intimidation leaves no room for optimism in cross-Strait ties.
The official said the president was not prepared to make any unilateral goodwill gestures to break ice with China. "In the future, history will remember him as the president who is firm on Taiwan identity, who is not ambiguous on relations between Taiwan and China," said the official.
Beijing and Taipei have been diplomatic and military rivals since their split at the end of the Chinese civil war in 1949. Beijing sees the island as part of Chinese territory and has pledged to bring it back into the fold, by force if necessary.
"Chen realises no matter how hard he tries, Beijing will not give him any credit so he has no choice but to turn to his core pro-independence supporters," said Yuchun Chen, a China watcher at the private Chinese Culture University in Taipei.
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