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-JULY, 1999-
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07/31/1999  
07/30/1999 U.S. To Pay $4.5 Million For Victims Of Embassy Bombing
07/30/1999 Beijing: Taiwan "Under-Estimates" Potential Of Sino-US Relations
07/30/1999 China To "Check" How Australian Politician Got Into Tibet
07/30/1999 China, U.S. Extend Talks On Bombing Compensation
07/30/1999 China's Most Populous Province Fights Banned Sect
07/30/1999 China Snubs Taiwan Clarification On Relations
07/29/1999 Round Two Of US-China Talks On Bombing Compensation Enter Second Day
07/29/1999 U.S.-China Spying Old Hat, Official Tells Paper
07/29/1999 Marianas Stop Issuing Entry Permits To Chinese
07/29/1999 New Round Of US-China Trade Contacts Could Point To WTO Talks
07/29/1999 China Allows US To Resume HK Military Flights
07/28/1999 Wife: Jailed China Dissident Xu Wenli Ill
07/28/1999 China Said Holding Navy Exercises In Taiwan Strait
07/28/1999 China Foreign Minister Unsure Wang Trip Off
07/28/1999 U.S. House Supports Clinton On China Trade Renewal
07/28/1999 Chinese FM Keeps Open Use Of Force Option On Taiwan
07/27/1999 China Still Silent On WTO Timetable
07/27/1999 Chinese Air Force Beefs Up Training, Tests SAMs
07/27/1999 U.S. House Seen Backing Clinton On China Trade
07/27/1999 Focus On Taiwan, Spratlys At Security
07/27/1999 Report: China To Start Naval Drill For New Recruits Off Xiamen
07/27/1999 Vietnam Will "Spare No Effort" To Sign Border Treaty With China
07/27/1999 Chinese Protest Over Diplomat Attack In Slovakia
07/27/1999 Group: Two Tibetan Monks Jailed For Independence Demonstration
07/27/1999 U.S. Sees WTO On Agenda For Clinton-Jiang Talks
07/26/1999 Taiwan Tells China Reunification Policy Unchanged
07/26/1999 Philippines To Send Envoy To China To Mend Ties
07/26/1999 China Warns Against Taiwan Intervention
07/25/1999 Taiwan tells China reunification policy unchanged
07/25/1999 Chinese FM Warns US Against Fanning Flames Of Independence In Taiwan
07/24/1999 US Envoys Hail "Useful" Meetings With Chinese, Leave For Singapore
07/24/1999 San Francisco scraps plans to honor Chinese mystic leader
07/24/1999 World's oldest giant panda in captivity dies: Xinhua
07/23/1999  LEE'S PARTING SHOT
In redefining the ground rules for relations with China, Taiwan's president ignites a dangerous new confrontation with worldwide implications
07/23/1999 'FRIENDLY' RELATIONS
 Obuchi ties a WTO deal - and little else
07/21/1999 Papua New Guinea Abandons Taiwan Recognition
07/21/1999 Taiwan Drops Provocative Two-China Phrases
07/21/1999 China Issues New Warning To Taiwan
07/21/1999 EU Urges China, Taiwan Not To Escalate Tension
07/20/1999 Wide Taiwan-China Social Gulf Complicates Reunion
07/19/1999 China Tells Clinton That Force On Taiwan An Option
07/19/1999 China's Top WTO Negotiator Seeks To Quell Fears About Entry's Impact
07/19/1999 Taiwan-China Tensions To Steal Show At ASEAN Meet
07/19/1999 House Resolution Calls For China To Pay US Damages
07/19/1999 U.S. Retains One-China Stance, Clinton Tells Jiang
07/19/1999 China's Jiang Ends Mongolia Visit, Hails Ties
07/19/1999 New Zealand PM Offers Auckland As Venue For US-China Summit
07/19/1999 Report: Embassy Bombing Row Delays "Star Wars" China Opening
07/19/1999 HK Chief Executive Calls Taiwanese President's Remarks Unwise
07/19/1999 Taiwan Authorities Seek To Calm Public Amid Tensions With China
07/19/1999 Taiwan Appeals For Peaceful Solution To Row With China
07/19/1999 Taiwan Says On Normal Alert Amid Threats
07/19/1999 Rogue Bid Splinters Taiwan Ruling Party
07/19/1999 Taiwan's China Shift Wins Support Despite Tension
07/18/1999 China Ready To Intervene If Taiwan Declares Independence
07/18/1999 China Says Taiwan Has Destroyed Basis For Cross-Strait Dialogue
07/18/1999 Taiwan faces China backlash from statehood claim
07/17/1999 China Conducts Psychological Warfare Against Taiwan
07/17/1999 Hong Kong Papers Report Chinese Military Maneuvers In Taiwan Strait
07/17/1999 Taiwan's Lee A "Historical Sinner", Say China's State Media
07/16/1999 China Tirade On Taiwan Carries Olive Branch
07/16/1999 U.S. Warns China Not To Use Violence Against Taiwan
07/16/1999 Chinese President Calls For Greater Cooperation With Mongolia
07/16/1999 US Senator Helms Backs Taiwan's Lee, Says Taipei Is "Sovereign"
07/16/1999 HK Paper Says China May Occupy Outer Taiwan Islands
07/16/1999 HK Assembly Backs Changes In Abode Laws
07/16/1999 China Trumpets Human Rights Progress In Tibet
07/16/1999 China Calls Lee Teng-Hui "Manipulator"
07/16/1999 Tense Calm Over Taiwan Amid Escalating Cross-Strait Tensions
07/16/1999 Taiwan's Soong Snubs KMT To Seek Presidency
07/15/1999 Taiwan On High Alert After China Warns It Would Use Force Against Island
07/15/1999 China Warns Taiwan That Its Army Ready To Enforce Unity
07/15/1999 US Views Taiwan's China Policy As Unchanged
07/15/1999 China Says It Mastered Neutron Bomb Technology Without Need To Spy
07/15/1999 China Declines To Confirm Tang-Albright Meeting In Singapore
07/15/1999 Analysts: China's Saber-Rattling On Taiwan Unlikely To Lead To War
07/15/1999 Report: US, Chinese Foreign Ministers To Meet In Singapore
07/15/1999 Singapore Daily Warns Of Harm To Asia Pacific Amid Taiwan-China Row
07/15/1999 Chinese President Departs For Goodwill Visit To Mongolia
07/15/1999 Bomb Blasts Rock Macao, Government Cars Damaged
07/15/1999 New PNG Government Could Ditch Taiwan Deal
07/14/1999 Taiwan Seeks To Defuse China Row With Reunification Pledge
07/14/1999 Poll: Most In Taiwan Support Burying "One China"
07/14/1999 New PNG Government Says To Review Taiwan Links
07/14/1999 China Welcomes North Korean Visitors
07/14/1999 Chinese Media, Scholars Heap Scorn On Taiwan's Lee
07/14/1999 Taiwan To Underscore Statehood Claim In Pressing UN Bid
07/14/1999 US, China To Try Mending Ties At ASEAN Meet
07/14/1999 US Asks For Dialogue, Restraint In Taiwan Dispute
07/13/1999 Taiwan Military On Alert For Major Chinese War Games
07/13/1999 Taiwan, China Should Cooperate, Not Fight
07/13/1999 Taiwan Leader Under Fire For Threatening Cross-Strait Stability
07/13/1999 Chinese Ambassador Summoned To Swedish Ministry
07/13/1999 China Rattles Sabers In New Taiwan Row
07/13/1999 EU's Patten Wants China In WTO On "Sensible Terms"
07/13/1999 US Backs "One China" Policy Despite Taiwan Shift
07/13/1999 Japan Affirms 'One China' Stance After Taiwan Shift
07/13/1999 Trade Official: Chinese Sanctions Could Cost Taiwan Billions
07/13/1999 US, China Plan Talks On Money For Bomb Victims
07/13/1999 China Says Taiwan Heading For Monumental Disaster
07/13/1999 Taiwan Appeals For Talks With China, Not War
07/13/1999 HK Papers Lambaste Taiwan, Experts Cautious
07/13/1999 Taiwan People Hail Lee For Standing Up To Beijing
07/13/1999 Macao Plans Handover Airshow - Balloons, Skydivers
07/13/1999 China Rules Out Including Damage To US Missions In Compensation Talks
07/13/1999 US Backs "One China" Policy Despite Taiwan Shift
07/12/1999 Chinese Official Blasts Taiwan President For Nationhood Statement
07/12/1999 China Says Taiwan "Playing With Fire"
07/12/1999 Lee Teng-Hui: Taiwan, China Two Separate Nation
07/12/1999 Taiwan Says Scrapping "One China" Doctrine
07/12/1999 Chinese University Expels Student For Commemorating Tiananmen Crackdown
07/12/1999 Report: Taiwan Cracking Down On 4,000 Illegal Chinese Immigrants
07/11/1999 Obuchi Wins Chinese, Mongolian Support Against North Korean Missile Test
07/11/1999 The Restaurant Where South And North Koreans Meet
07/08/1999 China Parliament Blasts U.S. Congress On Taiwan
07/08/1999 China Tells Papua New Guinea To 'Correct' Decision To Recognize Taiwan
07/08/1999 China Slams US Congress Resolution On World Tibet Day
07/07/1999 Chinese President To Visit Mongolia From July 15 To 17
07/07/1999 Beijing: No Improvement In Us-China Ties
07/06/1999 North Korean Missiles On The Agenda For Japan-China Talks
07/02/1999 U.S. Says Hong Kong Enjoys Surprising Autonomy
07/02/1999 US Ambassador To China Leaves On Note Of Optimism Despite NATO Bombing
07/02/1999 DEFUSING KASHMIR
 To restore peace, China and the U.S. need to exert their influence
07/02/1999 FIST IN A VELVET GLOVE
 The U.S. is upping the military ante in Northeast Asia

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Taiwanese Boat Confiscated By Armed Chinese Police

TAIPEI, Jul 31, 1999 -- (Agence France Presse) A Taiwanese supply boat suspected of smuggling was seized by Chinese marine police and taken to the mainland, the boat owner said Saturday.

"The captain called me saying that they have been taken away," the boat owner Feng Neng-ti told reporters.

Feng said the telephone call early Saturday was immediately cut off and he was unable to contact the captain Kuo Tai-sheng later.

A Taiwanese parliamentarian Tsao Er-chung, who is traveling in China's south-eastern Fujian province, told reporters the boat named "Shin Hwa" had been taken to Mawei.

Tsao said all 10 crew members were safe.

Local media reports said the Chinese police confiscated the boat on suspicion of smuggling home appliances to the mainland.

This was denied by the boat's owner.

"It's absolutely impossible our boat would carry smuggling goods," Feng said.

Shin Hwa was hired by the Taiwanese military to bring supplies to the frontline island of Matsu from northern port of Keelung on a regular basis, the defense ministry said in a statement.

Goods carried by Shin Hwa were food, water, car parts and fuels, the ministry said. "There are no arms and military papers, nor are there military officials on board," it said.

Justice Minister Yeh Ching-feng told reporters the boat's seizure was illegal and would bring adverse effects to cross-strait relations.

The seizure comes amid heightened tensions between Taipei and Beijing over remarks made by President Lee Teng-hui, who said the island's should conduct affairs with Beijing on a "state-to-state" basis.

By Agence France Presse

From Inside China Today

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U.S. To Pay $4.5 Million For Victims Of Embassy Bombing

BEIJING, Jul 30, 1999 -- (Reuters) The United States will pay $4.5 million in compensation for the three people killed and more than 20 wounded when NATO bombs destroyed Beijing's embassy in Belgrade, U.S. official David Andrews said on Friday.

The agreement was reached after Chinese and U.S. negotiators held three days of talks in Beijing over compensation for the victims and the destruction of the Belgrade mission. Andrews, legal adviser to the State Department, made no mention of compensation for the embassy building as he read a statement to reporters at the start of a news conference.

He said the agreement reflected "the critical importance of the U.S.-China relationship" and the money would be paid as soon as possible in recompense for "the tragic and mistaken bombing" of Beijing's mission on May 7.

The official Xinhua news agency said the money would be paid to the Chinese government, which would divide the money among the wounded and the relatives of those killed.

China has rejected as "unconvincing" U.S. explanations that the bombing was an error stemming from bad intelligence. The bombing sparked several days of demonstrations by tens of thousands of incensed Chinese.

By Reuters

From Inside China Today

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Beijing: Taiwan "Under-Estimates" Potential Of Sino-US Relations

BEIJING, Jul 30, 1999 -- (Agence France Presse) China Friday said Taiwanese president Lee Teng-hui had under-estimated Sino-US relations and warned Washington would not support Taiwan's independence.

Lee, who provoked fury in Beijing earlier this month by claiming relations between China and Taiwan should be conducted on a "state-to-state" basis, "under-estimates the prospects for Sino-US relations" an official commentary in the English-language China Daily said.

China, which considers Taiwan a renegade province, accused the Taiwanese president of rejecting the "One-China" principle in favor of formal independence.

China has previously warned any declaration of independence by Taipei could prompt it to take the island by force.

According to the China Daily, Lee is mistaken if he believed Washington would come to the assistance of an independent Taiwan.

"The United States will not support Taiwan independence, will not support creating 'two Chinas' or 'one China, one Taiwan," the commentary said.

The paper stressed that Washington did not want to see the inclusion of Taiwan in international organizations. "The United States is not willing to be dragged into a war by a 'troublemaker' like Lee," the paper said.

The China Daily story is one of the most positive commentaries regarding the United States to appear in China's official press since NATO's May bombing of the Belgrade embassy during the Kosovo conflict.

That incident saw Sino-US relations slump to their worst position for a decade.

"Indeed, bilateral relations suffered a setback recently," the commentary said.

"But from a long-term point of view, both the United States and China have important converging points in their national interests".

"The US government is clear of the determination of the Chinese government and people to defend the integrity of national sovereignty," the paper said.

"Though not necessarily promoting reunification, the strategy of the US government regarding the cross-Straits relations is to facilitate dialogues between the two sides of the Taiwan straits," it added.

By Agence France Presse

From Inside China Today

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China To "Check" How Australian Politician Got Into Tibet

BEIJING, Jul 30, 1999 -- (Agence France Presse) Chinese officials are to investigate how an Australian politician entered and traveled unescorted through Tibet, where tight travel restrictions have been in place for decades, sources said Friday.

The Political Counselor at the Chinese Embassy in Canberra on Thursday said authorities would "check" how Australian Senator Bob Brown managed to visit Tibet unaccompanied by Chinese officials, the Australia-Tibet Council said in a faxed statement received here.

Stringent regulations dictated by Beijing say foreign tourists to Tibet must be accompanied by a government-approved Chinese guide at all times.

Journalists, diplomats and politicians are rarely granted permits to visit the region.

Foreigners wishing to visit Tibet "have to form a group (with a travel agency) out of concern for their safety and other reasons," the Counselor, surnamed Zhang, told the Australian Broadcasting Corporation.

Brown, a key member of the Greens party, this week became only the second western parliamentarian to visit the country unchaperoned by authorities since 1959, the year an abortive anti-Communist uprising in Lhasa led to the flight of the Dalai Lama.

The Australia-Tibet Council described his visit as "groundbreaking", saying it set an important example to other politicians.

Posing as a vacationer, he circumvented Chinese visa regulations barring prominent western figures from visiting Tibet, which China invaded in 1949.

He described an "underworld of misery" for Tibetans living in "the largest militarized colony on the face of the planet," and said he had been approached throughout the trip by young Tibetans asking for his help and swearing allegiance to the Dalai Lama.

"Tibet is more heavily militarized than any other place I've ever been to -- it is difficult to walk a block anywhere in Lhasa without coming across militia or police," he told a press briefing on his return to Beijing.

"When you land at Lhasa there are military barracks at the back of the airport. At a bridge half way into town, you see soldiers armed with semi-automatic weapons at either end as well as in the center," he said.

By Agence France Presse

From Inside China Today

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China, U.S. Extend Talks On Bombing Compensation

BEIJING, Jul 30, 1999 -- (Reuters) Chinese and U.S. negotiators have extended talks on compensation for NATO's bombing of the Chinese embassy in Belgrade, a U.S. official said on Friday.

"He has extended his talks into today," the official said of State Department Legal Adviser David Andrews who is having a second round of meetings with China's Foreign Ministry.

Andrews' second round of talks on the issue, which began on Wednesday were originally scheduled to conclude on Thursday.

Andrews told reporters on July 16 after the first round that Washington hoped to make humanitarian payments to victims of the bombing as soon as possible.

He said, however, both sides had to address respective property claims in an apparent reference to damage to U.S. diplomatic missions in China in three days of violent protests against the bombing.

NATO bombs dropped by an American stealth bomber ripped through the Chinese embassy in Yugoslavia on May 7, killing three journalists and wounding more than 20 people.

China's official media withheld news of apologies offered by Washington for nearly a week and labeled the bombing a deliberate attack. Tens of thousands of demonstrators marched on U.S. diplomatic missions around the country.

Most of the windows of the U.S. embassy in Beijing were broken by rock-throwing protesters, and the consul-general's house in the southwestern city of Chengdu was burned.

China has rejected as "unconvincing" explanations that the bombing was an error. Beijing has refused to reopen talks on China's World Trade Organization application until the United States provides a satisfactory explanation.

By Reuters

From Inside China Today

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China's Most Populous Province Fights Banned Sect

ZHENGZHOU, China, Jul 30, 1999 -- (Reuters) Authorities in China's most populous province have stopped tens of thousands of members of a spiritual sect flocking to Beijing to protest against a ban and crackdown on the group, official sources said on Friday.

But Li Chengyu, vice-governor of the central province of Henan, said calm returned after members of Falun Gong -- which combines elements of Buddhism, Taoism, meditation and breathing exercises -- were "educated" on its harmful effects.

"They are quite calm now," the vice-governor told Reuters in an interview late on Thursday. He did not elaborate.

China outlawed Falun Gong on July 22, calling it an illegal organization that corrupted the people's minds, disrupted social order and sabotaged stability.

It issued a warrant for the arrest of U.S.-based sect leader Li Hongzhi on Thursday and asked for international assistance in bringing him to justice.

Li, who says Falun Gong is apolitical and poses no threat to China, told Reuters in New York last week he feared death at the hands of the Chinese government.

Falun Gong claims about 100 million members, but official estimates put the number at two million. By comparison, the Communist Party has around 60 million members.

Li rails against science, saying it has created an immoral world on the brink of disaster.

Soon after the ban was announced, police set up road blocks on highways leading to Beijing and checked the identities of travellers, sources familiar with the crackdown said.

At rail stations, Beijing-bound people had to prove they had a good reason for going, they said.

"In Henan, tens of thousands tried to come to Beijing," said one source who spoke on condition of anonymity.

Vice-Governor Li said the number of Falun Gong members in Henan was "quite big" because the province had a huge population, but he declined to give a figure.

The central province -- where 16 dynasties had their capitals -- has a population of more than 93 million.

Li said Falun Gong followers were mostly peasants, retired workers or had little education.

Communist Party members and government cadres were told to quit the sect, but there had been no mass arrests, he said.

"Police summoning people for questioning or detaining them are only temporary measures," the vice-governor said.

Falun Gong issued a statement in New York saying the warrant for Li Hongzhi's arrest was "based upon fabricated evidence". It called on Washington to protect Li and to urge Beijing to resolve the situation peacefully through direct talks.

U.S. officials have said they have no plans to repatriate Li, who lives with his wife and daughter in New York.

China's state media have heaped scorn on the sect, saying many followers were driven to insanity due to obsession or died after refusing medical treatment. Adherents believe they acquire supernatural powers by practising Falun Gong.

The Xinhua news agency said a police probe concluded that Falun Gong was responsible for at least 743 deaths nationwide.

The sect stunned China's rulers when more than 10,000 members besieged Beijing's sprawling Zhongnanhai leadership compound on April 25 to demand official status for their faith.

It was banned after adherents protested outside government offices in more than 30 Chinese cities in the wake of a crackdown on China-based leaders.

The Communist Party's flagship People's Daily accused the sect of attempting to replace the government, an indication that detained Falun Gong leaders faced stiff prison sentences.

The authorities have destroyed two million Falun Gong publications in the week since the ban.

International human rights watchdogs have said the crackdown flouted basic human rights.

By Reuters

From Inside China Today

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China Snubs Taiwan Clarification On Relations

BEIJING, Jul 30, 1999 -- (Reuters) China on Friday dismissed Taiwan's attempt to clarify President Lee Teng-hui's call for "special state to state" ties with Beijing, saying it had broken pledges to uphold a one-China policy.

China's Association for Relations Across the Taiwan Straits (ARATS) said a letter and statement by the head of its Taiwan counterpart was "a grave violation of our 1992 agreement to uphold mutual recognition of the one-China principle and we reject it".The blunt statement by an ARATS spokesman came several hours after Koo Chen-fu, Taiwan's top envoy in China relations, delivered a much-awaited attempt to clarify Taipei's China policy at Beijing's insistence, saying little had changed.

"The existing policy toward unification has not changed," the 82-year-old Koo, chairman of the quasi-official Straits Exchange Foundation, told a Taipei news conference.

Koo reiterated Lee's controversial July 9 "state to state" pronouncement, which prompted a torrent of invective from Beijing and a renewal of threats to take by force the island it has viewed as an insubordinate province since 1949.

China's response reiterated its view that the "basis of contacts, exchanges had dialogue have eased to exist" after Lee's remarks, but was silent on whether it would send ARATS chairman Wang Daohan to Taiwan for a visit slated for October.

By Reuters

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Round Two Of US-China Talks On Bombing Compensation Enter Second Day

BEIJING, Jul 29, 1999 -- (Agence France Presse) US and Chinese officials Thursday began the second day of a second round of talks on compensation for the US-led NATO bombing of the Chinese embassy in Belgrade, a US official said.

David Andrews, a US State Department legal advisor, held talks with foreign ministry officials Wednesday and would have more discussions Thursday, said the official.

Andrews, accompanied by about half a dozen other officials, is scheduled to leave Beijing Friday.

The visit is the second to Beijing this month for Andrews, following the preliminary talks which ended on July 16.

During the last round, progress was made on humanitarian payments to the 20-odd Chinese embassy staff injured in the blast and to the families of the three Chinese journalists killed.

Five US missiles slammed into the embassy on May 7 during the 79-day NATO bombing campaign of Yugoslavia.

Both the United States and NATO have called the embassy bombing a "tragic error" caused by outdated maps and errors that went unchecked.

China has refused to accept the US explanation of the bombing, while the state-controlled press has described it as a premeditated attempt at "containing China."

The US has said China's claim for damage to its embassy in Yugoslavia, which was devastated in the blast, is a more complicated issue than that of humanitarian payments.

Meanwhile China has ruled out considering damage to US missions here during days of angry demonstrations following the bombing.

China's angry reaction to the bombing has included the cancellation of its military and security exchanges with Washington. It also put off negotiations with the US on its accession to the World Trade Organization.

By Agence France Presse

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U.S.-China Spying Old Hat, Official Tells Paper

WASHINGTON, Jul 29, 1999 -- (Reuters) The CIA's top spy said in remarks published on Thursday that it was only to be expected that China and the United States would spy on each other.

Even at the height of bilateral intelligence cooperation between the two sides, each spied on the other, Jack Downing, who is retiring this week as head of the CIA's covert operations arm, told the Washington Post in a rare interview.

"That was expected," he said, adding, "It still is today." Allegations of Chinese theft of U.S. nuclear secrets have been roiling relations between Washington and Beijing.

"They are not doing anything we do not expect them to do," said Downing, 60, a former station chief in Moscow and Beijing who spent 30 years at the CIA.

"The best period" for U.S.-Chinese intelligence cooperation, he said, was "from normalization of relations in 1978 through June 1989 and the events at Tiananmen Square," when China crushed a pro-democracy movement.

The Post said Downing declined to discuss details, though that was a decade in which China and the United States secretly built eavesdropping facilities along the Chinese-Soviet border and the CIA funneled Chinese weapons to rebels in Afghanistan through Pakistan.

A special House of Representatives panel accused Chinese spies on May 25 of stealing, among other things, design secrets for U.S. thermonuclear weapons and using them to help develop miniaturized warheads.

In his Post interview, Downing said it would take until 2005 for the CIA to rebuild its clandestine service after years of thin budgets, rapid management turnover and low morale.

Some new stations have been opened, though "still not ... the number we need," said Downing, who heads the Directorate of Operations, which recruits and controls spies abroad.

He will be succeeded by his deputy, James Pavitt, a career CIA officer who served as intelligence director on the White House National Security Council under President George Bush.

By Reuters

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Marianas Stop Issuing Entry Permits To Chinese

SAIPAN, Northern Mariana Islands, Jul 29, 1999 -- (Agence France Presse) Chinese nationals will no longer be issued with entry permits for the Northern Mariana Islands, Labor and Immigration Secretary Mark Zachares said Wednesday.

Those already here can, however, get renewals, but the chances of Chinese workers getting refugee or asylum status were very slim.

He was responding to a claim by lawyer Bruce Jorgensen that over 12,000 Chinese nationals who now work here can seek refugee or asylum status under existing federal laws.

Zachares told Chinese workers here not to waste time applying because the United States Immigration and Naturalization Service (INS) will not entertain it as federal immigration law does not apply to the Northern Marianas.

"It is impossible to claim that you fear persecution in your native country when you're a contract worker. And it's kind of misleading for someone to say that they could," he said.

But if Chinese nationals can show a well-founded fear that they will be persecuted by the Chinese government due to their religious belief, ethnic background, political opinions, gender or membership in a social group, they could be granted refugee/asylum status.

Jorgensen cited as an example the Chinese government's once-child policy. If a Chinese national here gives birth to two children, she might qualify for asylum, he said.

By Agence France Presse

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New Round Of US-China Trade Contacts Could Point To WTO Talks

WASHINGTON, Jul 29, 1999 -- (Agence France Presse) The recent resumption in US-China trade contacts could signal a willingness on the part of Beijing to resume negotiations with Washington on its admission to the WTO, a trade analyst said here Wednesday.

Following one-day talks in Beijing Tuesday between US and Chinese officials, the first since the US bombing of the Chinese embassy in Belgrade May 7, Commerce Secretary William Daley announced plans to meet soon with China's trade minister, Shi Guangshen.

Also Tuesday the House of Representatives approved a one-year extension of normal trading relations with Beijing.

"These are encouraging signs and I do expect the Chinese to begin negotiating WTO accession in the near future," said Greg Mastel, an analyst with the Center for National Policy, a private research institute here.

Beijing abruptly called off negotiations aimed at winning US backing for Chinese admission to the World Trade Organization following the embassy bombing.

The United States insists the attack was accidental, caused by reliance on an outdated map -- an explanation the Chinese have dismissed as unsatisfactory.

While Chinese officials maintain they do not foresee an early resumption of WTO talks, Mastel said he believed Beijing did in fact remain anxious to join the Geneva-based body responsible for regulating international trade.

He noted that even after the Belgrade embassy attack China held a round of WTO accession talks with several other leading commercial nations -- notably Japan -- that must approve its entry.

The office of the US Trade Representative, which has been conducting the WTO consultations, nonetheless reacted cautiously Wednesday to suggestions that talks might resume soon.

"The ball is still in the Chinese court," said USTR spokeswoman Amy Stilwell, who added that her office has had no recent contacts with Chinese counterparts on the issue.

US and Chinese officials during a visit here in April of Chinese Prime Minister Zhu Rongji spoke optimistically of prospects for an agreement, despite the fact that talks between Zhu and President Bill Clinton failed to bridge remaining gaps.

Washington is holding out for additional Chinese market-opening commitments in a number of sectors before it will support Beijing's bid to join the WTO.

By Agence France Presse

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China Allows US To Resume HK Military Flights

HONG KONG, Jul 29, 1999 -- (Reuters) China has lifted a ban on U.S. military flights to Hong Kong, imposed after NATO bombs hit Beijing's Belgrade embassy in May, saying a U.S. Air Force cargo aircraft could land in the territory on Thursday.

It was another sign Sino-U.S. relations might be improving after a deep freeze following the embassy bombing by U.S. planes on May 7 that killed three Chinese nationals.

"A U.S. Air Force C-130 cargo plane has been given permission to land on a flight from Southeast Asia to Tokyo," U.S. consulate spokeswoman Barbara Zigli said in answer to a question.

"It is the first U.S. military aircraft to land in Hong Kong since the (Chinese) embassy was bombed," she added.

China, which oversees foreign and defense matters for this former British colony, banned all visits by U.S. military ships and planes after the bombing.

U.S. warships were still being refused entry into Hong Kong when the last application was made on June 24.

"When the first ships and planes were banned, there was no announcement. We'll have to wait until our next application for ships to visit to see," Zigli said. China's decision to lift the aircraft ban follows a meeting between U.S. Secretary of State Madeleine Albright and Chinese Foreign Minister Tang Jiaxuan in Singapore on Sunday.

Albright said the meeting eased tensions but Tang said China was unsatisfied with Washington's explanations. Beijing says the bombing was intentional and Washington says it was an accident.

Tang added, however, that bilateral talks were "useful and positive in relation to the future development of the China-U.S. relationship".

The Albright-Tang talks came against a backdrop of months of tense relations, with Beijing suspending a number of contacts and halting talks with Washington on its efforts to enter the World Trade Organization later this year.

The Albright-Tang talks also covered the feud between Beijing and Taipei which erupted with Taiwan's July 9 announcement that it wanted state-to-state relations with China.

Beijing regards Taiwan as a renegade province and has said it would invade if the island declared independence. Washington had expressed concern over the feud and dispatched envoys to Taipei and Beijing to try to ease tensions.

The U.S. C-130 cargo plane was scheduled to land at Hong Kong international airport on Thursday on a routine transit stop. It would depart on July 31, Zigli said.

Since the embassy bombing, Beijing has refused requests by eight U.S. navy ships and two military planes to stop in Hong Kong.

After Britain returned Hong Kong to China in July 1997, U.S. military visits to the territory on the South China Sea continued uninterrupted, with about 70 U.S. ships visiting in 1998 and pumping about $50 million into the local economy.

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Wife: Jailed China Dissident Xu Wenli Ill

BEIJING, Jul 28, 1999 -- (Reuters) Jailed Chinese dissident Xu Wenli is suffering from swollen hands, ankles and abdomen, indications he might have a heart or liver disease, his wife said on Wednesday.

He Xintong, who visited Xu at Yanqing prison in Beijing on Monday, said his feet were so swollen last month that he was unable to put on his shoes.

Prison doctors have drawn blood and prescribed diuretics, but have been silent as to what might be causing the symptoms, she told Reuters.

"His abdomen is swollen. It looks very unhealthy," He said. "His hair is totally white, there's not a strand of black."

Swollen body tissue is often a sign of heart or liver ailments, she quoted outside doctors as telling her.

Xu, 56, has served seven months of a 13-year jail sentence for his role in setting up the China Democracy Party, which was founded in 1998 to challenge single-party rule by China's Communist Party.

China has paroled several leading dissidents in recent years on medical grounds and forced them into exile, usually preceding political summits with the United States.

In late 1997, China expelled veteran pro-democracy activist Wei Jingsheng after he had served nearly two decades in jail. Wang Dan, a leader of the 1989 Tiananmen Square protests, was expelled in 1998.

In January, Xu's wife said police hinted that her husband also might win exile if she could convince him to leave. She quoted Xu as saying he would stay in China if offered a chance for freedom abroad.

In a shift from earlier this year, she said prison authorities were permitting Xu to read some books and was reading classics by Chinese philosopher Confucius (551-479 B.C.).

But he is not allowed to exercise and his window has been covered with a steel plate even though summer temperatures have reached above 40 degrees Celsius (104 Fahrenheit) in July.

"It's stiflingly hot and there are mosquitoes," Xu's wife said. "It's like living in a tin can."

On previous monthly visits to the prison, she said Xu had also complained of tooth pains. Xu lost most of his teeth from a previous 12-year stint in prison from 1981-1993 for his role in the 1979 Democracy Wall movement.

Diuretics, which drain excess fluid from the body, had helped reduce Xu's swelling, but he has stopped taking them because they left him feeling weak and dehydrated, she said.

Under a 1992 law, prisoners have the right to consult outside medial experts to diagnose ailments, she said.

She said she had written to wardens in June requesting permission to bring in a doctor, but none have replied.

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China Said Holding Navy Exercises In Taiwan Strait

BEIJING, Jul 28, 1999 -- (Reuters) China's navy is conducting mobilization exercises in waters across from Taiwan, the semi-official China News Service said in a report seen on Wednesday.

The drills, attended by senior military officials, were the second naval maneuvers reported by the domestic media since Taipei enraged Beijing earlier this month when it scrapped its "one-China" policy which has kept the peace between the two rivals for decades.

The maneuvers, organized by the navy, the general staff's mobilization department and the State Development Planning Commission, were aimed at testing military readiness along China's coast, the report said.

But Taiwan's military had noticed no such activity in the 160-km (100-mile) strait dividing the two sides, a Taiwan defense ministry official told Reuters.

China views Taiwan as a wayward province that must be reunited with the mainland and reserves the right to take the island by force if it declares independence.

Taiwan President Lee Teng-hui said on July 9 Taipei's "one China" policy had been abandoned in favor of "special state-to-state" relations under which they would treat each other as equals during talks, but Beijing blasted the move as a "dangerous step down the road of separatism".

The official Xinhua news agency reported on Wednesday that the chief of the People's Liberation Army's (PLA) general staff had warned President Lee to immediately stop his separatist activities and said the president was "picking up stones to smash his feet".

"The PLA has the determination and strength to defend the state's sovereignty and territorial integrity," Fu Quanyou was quoted as telling a visiting Malaysian military official.

The navy's most modern training vessel, the Shichang, arrived in the southern city of Xiamen on Sunday for exercises in the Taiwan strait, the China News Service said in the report, on its website at www.chinanews.com.cn.

Observers included top military officials in charge of mobilization, such as PLA major general Jiang Shikun, it said.

Officials in Xiamen declined to comment on the report.

Hong Kong's China-backed Wen Wei Po newspaper quoted political sources on Wednesday as saying that unofficial talks scheduled between China and Taiwan in autumn would be cancelled unless the island's government completely withdrew its new policy.

Under Lee's formula, any move by China to take Taiwan by military force would be seen as an invasion from a foreign power and provide an excuse for foreign intervention, the newspaper quoted sources as saying.

Last week, the China Youth Daily said China's North Sea Fleet had conducted maneuvers with submarines, surface ships and guided missiles in the Yellow Sea, between the country's eastern coast and the Korean peninsula.

The newspaper said the Yellow Sea drills were part of preparations for Army Day on August 1, but China has used military exercises to warn Taiwan against moving towards independence before.

In 1996, the United States sent two aircraft carrier battle groups to waters near Taiwan as China conducted menacing war games ahead of the island's first direct presidential elections.

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China Foreign Minister Unsure Wang Trip Off

SINGAPORE, Jul 28, 1999 -- (Reuters) China's foreign minister on Tuesday cast doubt on a report that what had been billed as a landmark visit by a Beijing envoy to Taiwan in October had been cancelled because of their current diplomatic row.

Taipei's United Daily News said on Monday China President Jiang Zemin had decided to cancel Wang Daohan's visit because there was no longer any basis for talks with Taiwan since Taipei's decision this month to drop the "one China" policy. On Tuesday, however, China's Foreign Minister Tang Jiaxuan cast doubt on that report, citing a Singapore news item that said China was still waiting for an explanation of Taiwan's new stance from Wang's counterpart in Taiwan, Koo Chen-fu.

"I think there is much truth in the report carried by Lianhe Zaobao which says the mainland side is still waiting for the clarification of Mr. Koo," Tang told a briefing of local journalists in Singapore on the fringe of the ASEAN conference. U.S. Secretary of State Madeleine Albright, also in Singapore for the Association of Southeast Asian Nations meeting, was quoted as saying she hoped Wang's visit would go ahead.

A senior Japanese official told a news conference on the sidelines of the ASEAN meeting that Albright made the statement to Japanese Foreign Minister Masahiko Komura. The United States and Japan (corrects) had agreed to stay in touch on the matter, the official added.

President Lee Teng-hui said this month Taiwan had abandoned the "one China" policy that has kept peace between the two rival governments and replaced it with his 'two-state theory', under which they would treat each other as equals during talks.

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U.S. House Supports Clinton On China Trade Renewal

WASHINGTON, Jul 28, 1999 -- (Reuters) The U.S. House of Representatives on Tuesday backed President Bill Clinton's decision to renew China's trade privileges for another year despite concerns about human rights and spying allegations.

Lawmakers voted 260-170 to continue for a year what is now called Normal Trade Relations (NTR) and used to be called Most Favored Nation (MFN) trade status.

Clinton said continued trade with China would help the U.S. economy as well as the economies of Taiwan and Hong Kong and support economic and social reforms in China.

"NTR promotes China's integration into the global economy, which in turn strengthens market-oriented reformers within China," he said in a statement. "Expanding trade can help bring greater social change to China by spreading the tools, contacts and ideas that promote freedom."

The vote, rejecting a measure that would have overturned Clinton's decision, pleased U.S. business leaders anxious for Washington to complete a broad trade agreement with Beijing that would clear the way for U.S. support for China's entry into the World Trade Organization (WTO).

Business groups have been telling lawmakers that severing normal trade ties with China would end that process, hurt U.S. interests in Asia, invite retaliation and cut U.S. companies off from the huge Chinese market.

Motorola Chairman and Chief Executive Chris Galvin said the vote sent a strong signal of support for trade with China that could help restart stalled talks on China's WTO bid.

"We think it is quite positive because the vote is largely the same in numbers as it was last year," he told Reuters in an interview.

The House vote showed strong bipartisan support, with Democrats voting 110-98 and Republicans voting 150-71 to back the president and continue NTR. The one independent in the House voted to revoke China's NTR status.

U.S.-Chinese talks have been on hold since NATO bombed the Chinese embassy in Belgrade in May. China has rejected U.S. explanations that the bombing was an accident.

U.S. trade officials hope talks will resume in September. If the two sides reach agreement, the White House has said it will ask Congress to end the annual renewal process and give China permanent NTR status.

Groups citing Beijing's record on human rights, nuclear technology proliferation and alleged theft of secrets from U.S. nuclear research facilities have urged Congress to revoke NTR.

The coveted trade status gives China the same low tariff access to U.S. markets as nearly every other country.

Exceptions include Afghanistan, Cuba, North Korea, Serbia and Montenegro. Other countries, such as Iran, Iraq, Libya and Sudan, are subject to U.S. trade sanctions.

Representative Dana Rohrabacher, a California Republican who sponsored the measure rejected by the House, argued that the House should ignore the pleas of U.S. business and send a powerful message of displeasure with Beijing's policies.

"Glassy-eyed businessmen can overlook any crime, shut their ears to any pleas for mercy in their quest for the China market," he said.

Supporters argued that withdrawing the U.S. trade status would further damage relations soured by the Belgrade embassy bombing, the spying allegations and Beijing's recent crackdown on dissidents and the quasi-religious Falun Gong sect.

The House vote means the Senate is unlikely to take up the issue.

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Chinese FM Keeps Open Use Of Force Option On Taiwan

SINGAPORE, Jul 28, 1999 -- (Agence France Presse) Chinese Foreign Minister Tang Jiaxuan has reaffirmed Beijing's stand that it will use force on Taiwan if the island declares independence, saying such a position will help lead to reunification.

"If we say now that we will never use force, we will probably turn our objectives into empty words," Tang told the Singapore media in an interview late Tuesday on the sidelines of a flurry of ASEAN meetings here.

Tang explained China's refusal to renounce the use of force on Taiwan was not directed at the people in Taiwan but at pro-independence elements in Taiwan and in foreign countries, the Straits Times daily reported.

He argued this policy could actually promote peaceful reunification, the newspaper said.

Taiwanese President Lee Teng-hui ignited Beijing's fury with recent remarks that relations between China and Taiwan were of a "state-to-state" nature.

US-China relations have also been strained since NATO forces mistakenly bombed the Chinese embassy in Yugoslavia in early May, killing three Chinese journalists and injuring about 20 other Chinese nationals.

The incident sparked widespread protests at US diplomatic missions across China.

Beijing has suspended talks with Washington on human rights, military cooperation, and negotiations for China's entry into the World Trade Organisation.

Another irritant is the United States' Taiwan Relations Act which demands that China promise to give up the right to use force against the island, which Beijing regards as a renegade province.

The Chinese government says the act "seriously infringes upon China's sovereignty and grossly interferes in China's internal affairs."

Tang, who left for home Wednesday, told the Singapore media it was China's desire that Lee retract his "two states" theory and out of goodwill Beijing was awaiting Taipei's positive response.

"But goodwill and desire cannot decide the course of the matter, which will be decided by what kind of attitude Lee Teng-hui and the Taiwan authorities adopt," he said.

Tang also said he told US Secretary of State Madeleine Albright in talks on the sidelines of the ASEAN meetings here that "the US should speak and act with great caution" on the Taiwan issue.

Tang warned in a dialogue between the Association of Southeast Asian Nations (ASEAN) and its top partners, including China, on Tuesday that "hegemonism" and "power politics" remained a threat to world peace and said the sovereignty of nations must be respected despite increasing globalisation.

"The international situation in recent years has clearly demonstrated that forces for world peace continue to grow, and peace, cooperation and development remain the overall trend of the time," Tang said.

By Agence France Presse

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China Still Silent On WTO Timetable

BEIJING, Jul 27, 1999 -- (Reuters) China gave no sign in meetings on Tuesday of being ready to resume talks on WTO entry which it froze after NATO bombed its Belgrade embassy, a senior U.S. official said.

"I got no particular indication as to what their timetable might be, if any," U.S. Under Secretary of Commerce David Aaron told a news conference after a day of meetings with Chinese trade officials in Beijing.

Aaron said his talks with Foreign Trade Minister Shi Guangsheng and other officials were constructive and that China had agreed to host a bilateral commercial gathering in autumn.

"The atmosphere for our discussions today couldn't have been better," he said. The one-day visit focused on bilateral trade issues unconnected to WTO.

The United States and China failed to strike a deal for Beijing to join the WTO in April and Beijing froze the talks after NATO bombed China's embassy in Belgrade on May 7.

China rejected as "unconvincing" explanations that the bombing was an error and has refused to reopen WTO talks until the United States provided a satisfactory explanation.

Aaron told reporters earlier time was tight if China wanted to join the WTO this year.

"We do have to point out that time's a wasting here -- the clock is ticking" ahead of the next round of WTO multilateral talks at the end of the year, he said.

U.S. National Security Council spokesman Mike Hammer said on Monday President Bill Clinton and Chinese President Jiang Zemin were expected to discuss the issue at the annual Asia-Pacific Economic Cooperation (APEC) forum in New Zealand in September.

Aaron said he discussed delays on the adoption of a U.S. mobile phone technology that U.S. firms such as Lucent Technologies and Motorola hope will bring them contracts worth billions of dollars.

Premier Zhu Rongji told U.S. officials in March that Beijing would allow China Unicom to build CDMA mobile phone networks to compete with entrenched European-backed technology.

But two ministries have since barred the rollout, industry sources said. They called it an attempt by China to force firms into divulging CDMA technology in exchange for market access.

Aaron told the news conference he believed China was holding CDMA hostage until Washington and Beijing reached a WTO deal.

"I wouldn't be surprised if the CDMA issue was related to the WTO accession," he said, adding that China had originally offered to use CDMA in the context of WTO discussions.

Aaron also discussed the fate of about $1.4 billion in investment by U.S. and other foreign firms in China Unicom, one of China's two telecommunications service providers.

In the mid-1990s, U.S. firms including Sprint, Nextel and Metromedia, exploited a loophole allowing them to pour money indirectly into Unicom and skirt an official ban on foreign investment in the telecoms sector.

China closed the loophole last year and began enforcing a ban on the existing joint-venture contracts in March, barring Unicom from sharing revenues with its foreign partners.

Aaron said the Chinese saw the issue as unconnected to the politics of Sino-U.S. relations.

"It was very clear that ... that they view this essentially now as a negotiation between the foreign investors and China Unicom," he said.

Aaron also raised apparent foot-dragging by China on issuing insurance licenses offered to two U.S. firms earlier this year.

"They indicated that they were looking forward to some more information they felt they needed from the companies," he said, adding he would brief the firms on the requirements.

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Chinese Air Force Beefs Up Training, Tests SAMs

BEIJING, Jul 27, 1999 -- (Reuters) China's air force has logged a record amount of flight training time and recently tested a surface to air missile (SAM) with 100 percent accuracy, the Beijing Evening News said on Tuesday.

The report was published amid heightened tensions with rival Taiwan, which enraged Beijing by rejecting the "one China" policy that kept the peace between the two sides for decades.

The newspaper said the Chinese air force broke a 15-year record for flight time logged in the first half of the year, with difficult drills at night, at low altitude and in heavy weather.

The air force also tested a new SAM system under near-battlefield conditions and found the weapon hit its target every time, it said.

Troops based in south China's Guangzhou military district recently carried out a live-fire exercise simulating long-distance attacks from guided missiles, the China News Service said last week.

China's North Sea Fleet also held maneuvers with submarines, surface ships and guided missiles in the Yellow Sea between the country's eastern coast and the Korean Peninsula, the China Youth Daily said.

While the military activity was not explicitly aimed at Taiwan, China has a record of using troop maneuvers to intimidate the island -- which Beijing considers a wayward province -- away from perceived moves towards independence.

In 1996, the United States sent two aircraft carrier battle groups to waters near Taiwan as China conducted menacing war games in the run-up to the island's first direct presidential elections.

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U.S. House Seen Backing Clinton On China Trade

WASHINGTON, Jul 27, 1999 -- (Reuters) Despite calls for an end to normal trade ties with China by religious and other groups concerned about human rights abuses and spying allegations, U.S. lawmakers are expected to back President Bill Clinton on renewing China's trade privileges.

The U.S. House of Representatives on Tuesday is scheduled to vote on Clinton's decision to renew China's trade privileges for another year, and administration officials and business supporters said they expected the president will prevail.

"I think it will pass the House comparable to what we did last year," said Willard Workman, international trade specialist at the U.S. Chamber of Commerce. "The very simple argument is, like it or not, we have a strong economic relationship with China."

U.S. businesses are anxious to expand into China's vast market potential, which supporters said could help even out a lopsided trade balance. In 1998 U.S. companies sold just over $14 billion in goods to China, while the United States imported more than $71 billion.

The business community waged an intense lobbying effort to convince Congress that trade is one area where China and the United States can strengthen an otherwise strained relationship. U.S.-Sino relations were soured in recent months by allegations that Beijing stole nuclear secrets from U.S. research facilities, by NATO's bombing of the Chinese embassy in Belgrade, by tensions over Taiwan and by concerns about human rights abuses.

Some religious and other groups argued China's continued crackdown against dissident groups and a recent congressional report outlining alleged Chinese efforts to obtain U.S. technology and U.S. nuclear secrets showed Clinton's policy of engagement was not working.

"While the president insists that the administration's policy of constructive engagement is having a positive impact on China, all of the evidence shows that this is not true," Family Research Council spokeswoman Janet Parshall said in a statement.

The conservative group said a State Department report earlier this year showed human rights deteriorating in China in the past year. It also pointed to continued crackdowns against political dissidents, persecution of religious groups and most recently a move to ban the quasi-religious Falun Gong sect, whose ability to stage big rallies unnerved China's rulers.

Also expected to weigh heavily on Tuesday's House debate was a report by a special House Committee on alleged Chinese spying at U.S. nuclear research facilities and Beijing's efforts to obtain technology.

Business groups and administration officials argued taking away China's Normal Trade Relation (NTR) status, formerly called Most Favored Nation (MFN) status, would do nothing to encourage more political and religious tolerance in China and would hurt long-term U.S. strategic and commercial interests. NTR status allowed Chinese goods to enter the United States at the same low tariff levels accorded nearly every other country.

"Renewal of NTR is very much in America's interest and we're hopeful that tomorrow's debate in the House will result in a favorable outcome," U.S. Commerce Secretary William Daley said in a statement. "A continued policy of principled, purposeful engagement reinforces our efforts to move China toward greater openness and broader freedom."

Tuesday's debate could lay the groundwork for what could be a bigger battle over China's bid to join the World Trade Organization (WTO). Lawmakers would have to decide whether to end the annual debate over China's trade status and grant permanent NTR.

But first the Clinton administration and China must complete a trade deal that has been up in the air since May 7, when the Chinese Embassy in Belgrade was bombed by the North Atlantic Treaty Organization (NATO) during its air campaign against Serbian military forces.

The United States has said the attack was a mistake and blamed outdated maps. Beijing has rejected that explanation, but the two sides have discussed compensation for the Chinese embassy and for damage to the U.S. embassy in Beijing during anti-American protests following the bombing.

Clinton and Chinese President Jiang Zemin are expected to discuss the WTO trade deal when they meet in New Zealand in September at the Asia-Pacific Economic Cooperation (APEC) forum.

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Focus On Taiwan, Spratlys At Security

SINGAPORE, Jul 27, 1999 -- (Reuters) Tensions over the Taiwan Strait, the South China Sea and North Korean missiles took center stage on Monday at a conference of Southeast Asian nations and key global powers.

China's foreign minister warned the group, which includes the United States, Japan, Russia, the European Union and Southeast Asian nations, against interfering in its dealings with Taiwan.

The participants at the conference bowed to his wishes, with none raising the latest friction between China and Taiwan.

"China's territory and sovereignty are indivisible and brook no violation or interference," China's Foreign Minister Tang Jiaxuan said.

"If there occur any action for Taiwan independence and any attempt by foreign forces to separate Taiwan from the motherland, the Chinese people and government will not sit back."

He was referring to Taiwan's July 9 announcement that it wanted state-to-state relations with China, which regards the island as a renegade province.

Singapore Foreign Minister S. Jayakumar said the conference had held substantial discussions on the disputed Spratly Islands.

He said its participants were "very concerned about the potential for instability, the potential for the escalation of tensions if we do not have some guidelines or a regional code to deal with the problems that arise from the differing claims".

The United States endorsed regional talks on the Spratlys, arguing that Asian countries "cannot simply sit on the sidelines and watch" as tensions rise.

U.S. Secretary of State Madeleine Albright noted that several nations had recently sought to bolster their claims by building or upgrading outposts near the Spratlys, which are claimed by the Philippines, China, Brunei, Taiwan, Malaysia and Vietnam.

Last week the Philippines sank a Chinese fishing vessel near the potentially oil- and gas-rich islands in what it called an accidental collision. China said the boat was rammed.

The incident occurred as foreign ministers from Singapore, Malaysia, Thailand, Myanmar, Indonesia, Brunei, Laos, Vietnam, Cambodia, and the Philippines prepared to meet at an Association of South East Asian Nations (ASEAN) conference in Singapore.

Monday's meeting was of the ASEAN Regional Forum (ARF), which groups the 10 ASEAN members and their dialogue partners -- the United States, Japan, China, Canada, the European Union, India, South Korea, New Zealand, Australia and Russia.

Australian Foreign Minister Alexander Downer said he did not believe the forum could solve the Spratlys problem, but it could manage security issues that arose from competing claims.

Japan raised the issue of North Korea's missile program and voiced concern over its effect on security, after China urged caution over making provocative statements on the matter.

The ARF said in a statement issued at the end of the meeting that developments on the Korean peninsula were a matter of concern and "agreed that parties involved should not adopt policies which could undermine peace and stability".

It said North Korea's 1998 payload launch and other missile related activities could heighten tension and have serious consequences.

Mongolia joined the ARF as a new participant, it said.

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Report: China To Start Naval Drill For New Recruits Off Xiamen

HONG KONG, Jul 27, 1999 -- (Agence France Presse) China was due Tuesday to start a naval exercise in the Taiwan Strait amid tensions with Taipei, a Hong Kong newspaper said.

The Beijing-backed Wen Wei Po daily said new recruits were due to start a series of "defense mobilization maneuvers" aboard China's most modern naval training ship, the 120-meter Shichang.

The daily quoted recruits as saying they were "very outraged" by Taiwan President Lee Teng-hui's assertion of statehood for Taiwan. They vowed to be "ready at all times to answer the call to defend the motherland."

Zhou Hanrong, a deputy commander of a Fujian naval base, was quoted as saying the navy would "make sacrifices to maintain the unity of the country, to defend territorial integrity and safeguard maritime rights."

China reacted furiously after Lee said on July 10 that Taiwan-China relations should be regarded as "special state-to-state relations."

It has launched vitriolic attacks against him and threatened force to regain the island.

By Agence France Presse

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Vietnam Will "Spare No Effort" To Sign Border Treaty With China

HANOI, Jul 27, 1999 -- (Agence France Presse) Deputy Foreign Minister Vu Khoan reaffirmed that Vietnam would "spare no effort" to sign a treaty on border delineation with China this year an official report said on Saturday.

Khoan, who headed the Vietnamese government delegation received the members of the joint working group on Friday, concluding a month-long round of talks in Hanoi, the Vietnam News Agency reported.

Khoan said such a treaty would contribute to a relationship of "good neighborliness, comprehensive cooperation, long lasting stability and looking towards the future," the agency reported.

The next round of talks will take place in August.

In 1997 Chinese President and Communist party general secretary Jiang Zemin and his Vietnamese counterpart Do Muoi (now retired) agreed to settle the land and Golf of Tonkin disputes by the year 2000.

Beijing and Hanoi have been working to resolve disputes on the delineation of their 1,150 kilometer (713 mile) long border since 1993.

Relations between the two neighbors were only normalized in 1991 after a brief but bloody conflict over their frontiers in February-March 1979.

By Agence France Presse

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Chinese Protest Over Diplomat Attack In Slovakia

BRATISLAVA, Jul 27, 1999 -- (Agence France Presse) China has formally protested to Slovak authorities over a suspected far-right attack on one of its diplomats and two other Chinese nationals in Bratislava, an embassy spokesman said Monday.

Beijing's first secretary, Sun Shizong, suffered head injuries in the attack Saturday night. He remained in hospital Monday.

The other victims, both doctors, were treated in hospital and released.

Police said they wee seeking eight youths who carried out the attack at a trolleybus stop, witnessed by a number of passers-by who were too elderly to do anything.

The Chinese embassy and Slovak press reports blamed skinheads for the attack, although police said they could not confirm this for the moment.

Police spokeswoman Marta Bujnakova said "enormous" efforts were being made to investigate the assault.

By Agence France Presse

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Group: Two Tibetan Monks Jailed For Independence Demonstration

BEIJING, Jul 27, 1999 -- (Agence France Presse) Two Tibetan monks have been jailed for up to four years for calling for independence for the region on the 40th anniversary of the failed uprising against Chinese rule, a Tibetan group said Tuesday.

Phuntsok Legmon, 17, was sentenced to three years' imprisonment and stripped of his political rights for two years, while Namdol, 25, was jailed for four years and deprived of his rights for a year, the Tibetan Center for Human Rights and Democracy said.

The two were sentenced by a Lhasa court on July 9 for "incitement and propaganda" activities, the center said in a statement sent from Dharamsala where the Tibetan spiritual leader in exile, the Dalai Lama, is based.

The two were arrested on March 10 when they were chanting slogans in the center of Lhasa calling for Tibet's independence from Chinese rule.

The demonstration was held to mark the 40th anniversary of the failed uprising against Chinese rule in 1959 which was brutally quashed by Chinese troops.

Thousands of people died and the Dalai Lama fled into exile.

The center said the two monks were badly beaten during their arrest, and are now being held in a prison in Drapchi where many opponents to Chinese rule have been sent.

By Agence France Presse

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U.S. Sees WTO On Agenda For Clinton-Jiang Talks

WASHINGTON, Jul 27, 1999 -- (Reuters) The United States expects China's entry to the World Trade Organization (WTO) to be one of the top issues when the U.S. and Chinese presidents meet in September, the White House said on Monday.

The United States and China failed to strike a deal for Beijing to join the 134-nation trade group in April and their talks on the matter were suspended in May after NATO bombed China's embassy in Belgrade, sparking Chinese fury.

Although expert level talks still have not resumed, the White House expects President Bill Clinton and Chinese President Jiang Zemin to discuss the issue when they meet on the sidelines of the annual Asia-Pacific Economic Cooperation (APEC) forum to be held in New Zealand in September.

"We expect ... WTO will be one of the top agenda items," said National Security Council spokesman Mike Hammer. "We are looking for an opportunity to continue to work with China to get the best deal possible for U.S. businesses."

U.S. businessmen roundly criticized Clinton in April for his failure to secure a WTO deal for China in Washington talks with Chinese Premier Zhu Rongji, who offered deep concessions that would have given U.S. businesses wider access to China's vast market of 1.2 billion people.

Clinton sought to recover the initiative by scheduling a new round of expert-level talks that never took place because of the North Atlantic Treaty Organization's (NATO) May 7 bombing of the Chinese embassy in Beijing.

Washington has insisted the bombing was an accident that stemmed from the Central Intelligence Agency (CIA) wrongly identifying the embassy as the Yugoslav Federal Directorate for Supply and Procurement, which was about 300 yards (meters) away.

It was the only target selected by the CIA during NATO's 11-week bombardment of Yugoslavia during the Kosovo conflict.

The bombing killed three Chinese citizens and sparked days of mass anti-U.S. demonstrations in China, which last month rejected U.S. explanations of the incident as "unconvincing."

U.S. Secretary of State Madeleine Albright met Chinese Foreign Minister Tang Jiaxuan in Singapore on Sunday in the highest level contact between the two countries since the embassy bombing.

Tang told reporters afterwards he was surprised Albright had not raised the WTO during their meeting, but Hammer said the U.S. position was well known and the secretary of state did not feel it was necessary to repeat it.

"The Chinese are very well aware of our interest in resuming discussions on WTO," he said. "The ball is in their court. Any moment they wish to resume those discussions, we would be glad to do so."

Regardless of when expert-level discussions may resume, Hammer said he expected the WTO issue to come up during the Clinton-Jiang meeting in September.

By Reuters

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Taiwan Tells China Reunification Policy Unchanged

TAIPEI, Jul 26, 1999 -- (Agence France Presse) Taiwan in a gesture to appease Beijing said Sunday its reunification policy remained intact and urged China's top negotiator Wang Daohan to come to Taipei as scheduled in the autumn.

US envoy Richard Bush was guaranteed that Taiwan's mainland policy had not altered during a meeting with Taiwan's top negotiator with China Koo Chen-fu, said Shi Hwei-yow, secretary-general of the semi-official Straits Exchange Foundation (SEF).

"The basis of contacts between SEF and (China's) Association for Relations Across the Taiwan Strait (ARATS) was as firm as before," Shi quoted Koo as saying.

"Our policy of pressing for reunification under democracy are unchanged, and so are our dialogues and the commitments to honoring agreements."

Beijing was infuriated after Taiwan President Lee Teng-hui told a German radio on July 10 that the Taiwan-mainland ties should be regarded as a "special state-to-state relations."

The Chinese foreign ministry has warned it would cut off exchanges between the two bodies.

Taiwan has said it would not be reunified with China unless democracy prevails in the mainland.

"Mr. Koo told Bush we sincerely hope Wang would come in the fall and that they would go ahead with their constructive dialogues," Shi said.

Wang, who met with Koo in the mainland in October, has agreed to visit Taiwan in the autumn for an unprecedented trip, but no specific date has been fixed.

While here Bush met Lee, Foreign Minister Jason Hu and other leaders, who also assured him the statehood claim was not aimed at seeking independence.

Bush, trying to cool tensions across the Taiwan Strait, assured Taipei on Sunday Washington would honour its commitments to the island and called for a peaceful settlement of disputes with China.

"All the elements of the administration's policy towards Taiwan remain in place," Bush said in a statement at the end of his four-day Taiwan visit amid the worst tensions for three years.

"The United States remains committed to faithful implementation of the Taiwan Relations Act," he said, just hours after meeting the top Taiwan negotiator with the mainland, Koo Chen-fu.

The act has governed the unofficial ties between the US and Taiwan since Washington switched diplomatic recognition to Beijing in 1979.

It stipulates the US will provide defensive weapons but does not oblige it to defend Taiwan against attack -- something China has threatened if Taiwan ever declares independence.

Bush is chairman and managing director of the Virginia-based unofficial American Institute in Taiwan, the main channel through which Washington conducts its relations with Taipei.

By Agence France Presse

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Philippines To Send Envoy To China To Mend Ties

SINGAPORE, Jul 26, 1999 -- (Reuters) The Philippines plans to send a mission to China to mend fraying bilateral relations, Philippine Foreign Secretary Domingo Siazon said on Sunday.

"We discussed the resumption of meetings for CBM (confidence building measures) and I think my undersecretary, Mr (Lauro) Baja, will be going to China to lead that," he told reporters.

Siazon, speaking after meeting his Chinese counterpart Tang Jiaxuan on the sidelines of an Association of South East Asian Nations (ASEAN) conference, said he and Tang appeared to be speaking "a common language".

Tensions between Beijing and Manila flared last week after the Philippine navy sank a Chinese fishing boat in the South China Sea near the Spratly Islands, which both nations claim.

A Chinese foreign ministry spokeswoman said at a separate briefing that Tang had expressed the need for coolheadedness and understanding in the South China Sea.

She said the minister had expressed his "shock and dissatisfaction" over the sinking of the Chinese boat, over which she said Siazon had expressed deep regret.

"Foreign Minister Tang called on the Philippine government to handle this case seriously and to take effective measures to ensure no recurrence," she said.

Manila has said the boat sank in an accidental collision. The potentially oil-and gas rich Spratlys are claimed by China, the Philippines, Brunei, Taiwan, Malaysia and Vietnam.

Siazon said Tang had reiterated the Chinese government view that it considered the relations with the Philippines important and that they were based on "a good neighborliness policy".

Siazon said he also discussed Taiwan-China tensions and "clearly indicated at the highest level that the Philippines has a one-China policy".

ASEAN groups Malaysia, Singapore, Brunei, Thailand, Vietnam, Cambodia, Laos, Myanmar, the Philippines and Indonesia.

By Reuters

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China Warns Against Taiwan Intervention

SINGAPORE, Jul 26, 1999 -- (Reuters) China's foreign minister warned the world against interfering in its stormy affairs with Taiwan on Monday at a security meeting that includes the United States, Japan, Russia, South Korea and Southeast Asia.

"China's territory and sovereignty are indivisible and brook no violation or interference," Chinese foreign minister Tang Jiaxuan said in a speech at an Association of South East Asian Nations (ASEAN) regional security forum.

"If there occur any action for Taiwan independence and any attempt by foreign forces to separate Taiwan from the motherland, the Chinese people and government will not sit back and do nothing," Tang said.

China reacted with outrage earlier this month when Taiwan President Lee Teng-hui scrapped the "one China" policy that has kept peace in the Taiwan Strait for decades. Lee said talks should take place on a special state-to-state basis.

A Taipei newspaper said on Monday that China's President Jiang Zemin had decided to cancel what had been billed as a landmark visit by a Beijing envoy to Taiwan in October.

"After more than 10 days of observation and meeting discussions, Jiang Zemin has decided to cancel Wang Daohan's plan to visit Taiwan," Taipei's United Daily News reported.

A Chinese foreign ministry spokeswoman in Singapore declined to comment on the report.

Tang, addressing the one-day ASEAN Regional Forum (ARF) which began on Monday morning, said in China's view "the main issue affecting security in the (Asian) region is still a lack of trust among nations".

He said destabilizing factors had developed further in the region.

"The Cold War mentality has by no means died out in the regional political and security arena," he said.

"The tendencies of strengthening military alliances and resorting to intervention against the historical trend are growing and the arms race has also the tendency of coming back," Tang said.

Tang said China felt that multilateral security dialogue and cooperation in the Asia-Pacific region should aim at "mutual respect" instead of "the strong bullying the weak".

"Asian people have had painful and unforgettable memories of the strong bullying the weak and willful interference into their internal affairs, which should not be the choice for building peace in the Asia-Pacific," he said.

ARF is a political and security dialogue that includes the ASEAN members Singapore, Malaysia, Thailand, Myanmar, Indonesia, Brunei, Vietnam, Cambodia, Laos and the Philippines and dialogue partners the United States, Japan, China, Canada, the European Union, India, South Korea, New Zealand, Australia and Russia.

By Reuters

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Taiwan tells China reunification policy unchanged

TAIPEI, Jul 25, 1999 -- (Agence France Presse) Taiwan in a gesture to appease Beijing said Sunday its reunification policy remained intact and urged China's top negotiator Wang Daohan to come to Taipei as scheduled in the autumn.

US envoy Richard Bush was guaranteed that Taiwan's mainland policy had not altered during a meeting with Taiwan's top negotiator with China Koo Chen-fu, said Shi Hwei-yow, secretary-general of the semi-official Straits Exchange Foundation (SEF).

"The basis of contacts between SEF and (China's) Association for Relations Across the Taiwan Strait (ARATS) was as firm as before," Shi quoted Koo as saying.

"Our policy of pressing for reunification under democracy are unchanged, and so are our dialogues and the commitments to honoring agreements."

Beijing was infuriated after Taiwan President Lee Teng-hui told a German radio on July 10 that the Taiwan-mainland ties should be regarded as a "special state-to-state relations."

The Chinese foreign ministry has warned it would cut off exchanges between the two bodies.

Taiwan has said it would not be reunified with China unless democracy prevails in the mainland.

"Mr. Koo told Bush we sincerely hope Wang would come in the fall and that they would go ahead with their constructive dialogues," Shi said.

Wang, who met with Koo in the mainland in October, has agreed to visit Taiwan in the autumn for an unprecedented trip, but no specific date has been fixed.

While here Bush met Lee, Foreign Minister Jason Hu and other leaders, who also assured him the statehood claim was not aimed at seeking independence.

Bush, trying to cool tensions across the Taiwan Strait, assured Taipei on Sunday Washington would honor its commitments to the island and called for a peaceful settlement of disputes with China.

"All the elements of the administration's policy towards Taiwan remain in place," Bush said in a statement at the end of his four-day Taiwan visit amid the worst tensions for three years.

"The United States remains committed to faithful implementation of the Taiwan Relations Act," he said, just hours after meeting the top Taiwan negotiator with the mainland, Koo Chen-fu.

The act has governed the unofficial ties between the US and Taiwan since Washington switched diplomatic recognition to Beijing in 1979.

It stipulates the US will provide defensive weapons but does not oblige it to defend Taiwan against attack -- something China has threatened if Taiwan ever declares independence.

Bush is chairman and managing director of the Virginia-based unofficial American Institute in Taiwan, the main channel through which Washington conducts its relations with Taipei.

By Agence France Presse

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Chinese FM Warns US Against Fanning Flames Of Independence In Taiwan

SINGAPORE, Jul 25, 1999 -- (Agence France Presse) Chinese Foreign Minister Tang Jiaxuan on Sunday warned the United States against stoking the flames of independence in Taiwan and called President Lee Teng Hui a "troublemaker" in US-China ties.

Going on the offensive ahead of a key security conference here, Tang said he told US Secretary of State Madeleine Albright during a meeting to act with caution in dealing with the China-Taiwan question.

"This is a very dangerous theory," he said of Lee's statements that sought to redefine relations with China as a relationship between two states.

"The essence of this two-states theory is to publicly deny the one-China principle and to separate Taiwan from Chinese territory," Tang said in a news conference.

Tang said he had "seriously pointed out" to Albright that "the US should say little and act with great caution" on the issue of Taiwan, which China regards as a breakaway province.

"The US should have a clear understanding that Lee Teng-Hui is a troublemaker in US-China relations."

"If I were a journalist, I would like an article titled 'Troublemaker Lee Teng-hui'," the Chinese minister said. He urged Washington "not to do or say anything that would fan the flames of independence."

China put its southern forces on combat alert and repeated a policy that it reserves the right to take Taiwan by force after the July 9 statements by Lee, sparking a massive selloff in Taipei's stock markets.

Foreign ministers of the Association of Southeast Asian Nations (ASEAN), in a joint communiqué issued after a two-day meeting Saturday, urged China and Taiwan to solve their disputes peacefully.

ASEAN said a prolonged standoff could hinder the region's fledgling recovery from financial crisis.

Tang said US action on the Taiwan question was a key element in Beijing's ties with Washington, which have been battered by the US bombing of the Chinese embassy in Belgrade during the NATO-led bombing of Yugoslavia in May.

In her own news conference Sunday, Albright said Taiwan must do more to explain its controversial "statehood" call.

"I think that the explanations offered thus far don't quite do it," she told a news conference after talks with Tang.

"Foreign Minister Tang indicated they were listening very carefully to what Mr. Lee is saying, that they also wish to have a peaceful resolution, but they also reiterated their standard position that they do not renounce the use of force," Albright said.

"I have a sense that they are looking at it very carefully," she added.

US envoy Richard Bush, trying to cool tensions across the Taiwan Strait, assured Taipei on Sunday Washington would honor its commitments to the island and called for a peaceful settlement of disputes with China.

"All the elements of the administration's policy towards Taiwan remain in place," Bush said in a statement at the end of his four-day Taiwan visit amid the worst tensions for three years.

"The United States remains committed to faithful implementation of the Taiwan Relations Act," he said, just hours after meeting the top Taiwan negotiator with the mainland, Koo Chen-fu.

The act has governed the unofficial ties between the US and Taiwan since Washington switched diplomatic recognition to Beijing in 1979.

It stipulates the US will provide defensive weapons but does not oblige it to defend Taiwan against attack -- something China has threatened if Taiwan ever declares independence.

Bush is chairman and managing director of the Virginia-based unofficial American Institute in Taiwan, the main channel through which Washington conducts its relations with Taipei.

By Agence France Presse

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US Envoys Hail "Useful" Meetings With Chinese, Leave For Singapore

BEIJING, Jul 24, 1999 -- (Agence France Presse) US Assistant Secretary of State Stanley Roth and National Security Council Asian director Kenneth Lieberthal left Beijing Saturday, saying talks with Chinese officials were "useful".

"(Roth and Lieberthal) held a useful set of meetings with senior Chinese officials including Foreign Minister Tang Jiaxuan," a statement issued by the US embassy Saturday said.

"Talks were conducted in a constructive atmosphere and covered a range of regional and bilateral topics, including recent developments on Taiwan issues," it added.

The discussions held on Friday were in preparation for the weekend meeting between US Secretary of State Madeleine Albright and Foreign Minister Tang, it said.

Albright and Tang are slated to meet in Singapore on the sidelines of the annual ASEAN regional forum.

Taiwanese President Lee Teng-hui ignited Beijing's fury with recent remarks that relations between China and Taiwan were of a "state-to-state" nature.

US-China relations have also been strained since NATO forces mistakenly bombed the Chinese embassy in Yugoslavia in early May, killing three Chinese journalists and injuring about 20 other Chinese nationals.

The incident sparked widespread protests at US diplomatic missions across China.

Beijing has suspended talks with Washington on human rights, military cooperation, and negotiations for China's entry to the World Trade Organization.

Another irritant is the United States' Taiwan Relations Act which demands China promise to give up the right to use force against the island.

China's foreign ministry spokesman Zhu Bangzao on Friday said the act "seriously infringes upon China's sovereignty and grossly interferes in China's internal affairs."

He said China would not abandon the use of force while elements in Taiwan and the international arena worked to try to split Taiwan from China.

And he warned that the act was "a major obstacle to the development of Sino-US relations by attempting to maintain, in disguised form, the US's official and military ties with Taiwan through domestic laws."

Recent allegations in the US that China stole nuclear warhead technology from the United States have also fanned Beijing's ire.

Analysts said they expected the Tang-Albright talks to be groundbreaking.

"The strong American support for the one-China policy has been the response Beijing has been looking for," said Bruce Gale, a Singapore-based analyst with the regional Political and Economic Risk Consultancy.

Jia Qingguo, a scholar at the School of International Studies at Beijing University, felt the Taiwan issue offered the United States an opportunity to make up over the mistaken NATO bombing.

US pressure on Taiwan's Lee "to back down from his statement," would be "beneficial to Sino-US relations," Jia said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The ASEAN ministers are in Singapore for annual talks to chart the expanded group's strategy into the next millennium and will tackle defense issues with global powers during next week's ASEAN Regional Forum on security.

By Agence France Presse

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San Francisco scraps plans to honor Chinese mystic leader

SAN FRANCISCO, Jul 24, 1999 -- (Agence France Presse) Plans to fete Li Hongzhi in San Francisco Friday were abandoned after Mayor Willie Brown quietly rescinded a resolution naming the day in honor of the Chinese mystic leader.

"In light of recent events, the mayor did not want the proclamation misinterpreted or perceived as any comment," said Candace Bender, a spokeswoman for Brown.

Lis followers had reserved a room in City Hall for a Friday morning ceremony at which the mayoral proclamation naming the day in honor of Li would be read, possibly by Brown himself.

A request to proclaim July 23 "Li Hong Zhi Day" in San Francisco had been presented last month to staffers at City Hall.

Such requests are routine and new staffers approved the request without consulting Brown, Bender said.

"The mayor did not know about this until yesterday afternoon," Bender said Friday. "At which time he thought it best to cancel the proclamation."

Brown was to leave for Los Angeles Friday morning and would not be here to meet with members of the group, Bender said.

Lis supporters subsequently informed the mayors office that they no longer planned to use a room in City Hall, Bender said.

The leader of China's Falungong sect told the Wall Street Journal that he is worried the United States may deport him following news that the US State Department has urged China to stop repressing his group.

"I've heard that the Chinese government wants to get me back to China through the FBI," Li Hongzhi said in an interview with daily, adding that his followers have asked the US State Department for protection and support.

On Thursday, the State Department expressed disappointment at China's decision to ban the popular sect, which describes itself as an exercise and meditation group. The department urged China to allow Falungong followers to gather peacefully.

Li remained defiant against the ban and refused to ask his followers to back down, telling the paper that "the government can punish people's bodies, but they cannot change their hearts."

On Thursday, China banned the mystical Falungong group and launched a massive propaganda offensive against Li, the sect's founder, in the toughest security measures since the 1989 Tiananmen Square crackdown.

The Chinese government has accused the group of harboring political motives and seeking to sabotage social stability.

By Agence France Presse

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World's oldest giant panda in captivity dies: Xinhua

BEIJING, Jul 24, 1999 -- (Agence France Presse) Dudu, the world's oldest giant panda in captivity, died in the zoo in Wuhan city, capital of central China's Hubei Province, the official Xinhua news agency reported Friday.

The 37-year-old Dudu, who died Thursday, was reported to have been suffering from epilepsy.

The hot summer weather in Wuhan, deemed one of the "furnaces" of China, may have contributed to her demise, Xinhua said quoting unnamed zoo authorities.

The zoo had set up a round-the-clock monitoring team and prepared a range of emergency medical equipment for the panda, Xinhua said.

Born in 1962 in a nature reserve, Dudu was first transferred to the Chengdu zoo in southwestern China, and then to Wuhan in 1972.

China now has about 1,000 giant pandas both in captivity and in the wild.

A low reproduction rate and dwindling bamboo forests have led to a drastic reduction in giant panda numbers.

The average life span of a giant panda in the wild is about 15 years, while in captivity it is about 25 years.

By Agence France Presse

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LEE'S PARTING SHOT
In redefining the ground rules for relations with China, Taiwan's president ignites a dangerous new confrontation with worldwide implications

By Alejandro Reyes

NOBODY EXPECTED LEE TENG-HUI to retire quietly. Last week, with less than nine months to go before an election to choose his successor, Taiwan's president fired what may be his parting shot in a long and bitter battle with China over the ground rules of their relationship. But this was no token broadside. Lee, 76, launched a major bombshell that looks set to seriously disrupt the island's fragile ties with the mainland. It could also destabilize security in East Asia and jolt already shaky relations between China and the United States.

Lee made his move during an interview with German radio. "Since our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations," Lee said. "Under such special state-to-state ties, there is no longer any need to declare Taiwan independence." Though Taipei long challenged Beijing's claim to be the sole sovereign government of all China, both operated under the principle that only one nation existed. The mainland has regarded Taiwan as a renegade province, while the island, styling itself the Republic of China, simply acknowledges that the Communists control the mainland. The "one China" device, precisely because of its ambiguity, conveniently allowed both sides in recent years to pursue expanding economic and cultural ties and even informal negotiations.

But by declaring the existence of two separate states, Lee may undermine the modus videndi that has maintained peace across the Taiwan Strait for half a century. Beijing launched fresh attacks on Taiwan's first native-born leader, whom it has long accused of being a "splittist," quietly preferring independence while professing to support eventual reunification.

If there were any doubts about what Lee meant, they were dispelled by Su Chi, chairman of Taipei's policy-making Mainland Affairs Council. On July 12, he announced that Taiwan would drop the term "one China." Switching to English, Su said Taipei regarded its ties with the mainland as a "state-to-state" relationship, but not a "country-to-country" one. But the semantics are lost in Chinese, where the word guo means state, country and nation. Declared Su: "China covers Taiwan under its one-China umbrella coercively and this has created abnormal relations." The shift, which had been contemplated for over a year, does not alter Taipei's commitment to eventual reunification, he said.

Beijing is unlikely to be persuaded. Tang Shubei, vice chairman of the unofficial mainland agency handling ties with Taipei, said the one-China principle is essential for stability. He accused Taiwan authorities of "playing with fire." Beijing has never renounced the option of military action should Taiwan move toward independence. The mainland's worries about the island are at the root of its deep opposition to the U.S.-led NATO attacks against Yugoslavia over Kosovo. The Chinese fear that the West could similarly intervene in Taiwan, especially if they were to use force. In 1996, after a dispute over Lee's unofficial visit to the U.S. the year before, the mainland conducted missile tests and military maneuvers off Taiwan. The Americans sent an aircraft carrier. All that provided a backdrop for presidential elections on the island, in which a defiant Lee romped to victory as the ruling Kuomintang's candidate.

The fresh row follows a controversy earlier this month when Papua New Guinea abruptly announced it was switching recognition from Beijing to Taipei. Charges swirled that Taiwan had offered more than $2 billion in aid to Port Moresby. The incident angered China, which has been working to block Taiwan's feverish efforts to gain diplomatic ground. Beijing, for example, has long insisted that Taipei's entry to the World Trade Organization (WTO) should follow its own. Suggestions that the U.S. may now back early Taiwan membership have roiled Beijing.

One casualty of the new flare-up may be a trip this autumn to Taiwan by Tang's boss Wang Daohan, who would have become the top mainland official to visit the island. The journey was to reciprocate one last year by Wang's counterpart, Koo Chen-fu, a senior Lee adviser. Wang has already expressed shock at Taipei's decision to redefine cross-strait ties. Chinese Foreign Ministry spokesman Zhu Bangzhao warned Taiwan "not to underestimate the strength of the Chinese people to fight against separation and Taiwan independence." He added: "Lee has gone too far along the dangerous road."

Why did Lee make his move now? The wily tactician may be aiming to take advantage of the parlous state of Sino-U.S. ties. Plagued by charges of Chinese nuclear spying as well as disputes over Beijing's WTO membership and Kosovo, they were brought to a new low by NATO's bombing of China's Belgrade embassy in May. Beijing suspended military exchanges with Washington and put off further WTO talks. While the U.S. has apologized for the bombing and sent a diplomat to Beijing to give an official explanation, China has stood its ground. Last week, the Americans dispatched another envoy to discuss compensation for the three Chinese killed in the attack.

With anti-Beijing sentiment in the U.S. at a high, Lee may be calculating he can tap sympathy for democratic Taiwan - and win wider room to maneuver internationally. He may reckon that China will only lose more points with the Americans if it chooses to retaliate militarily. The U.S. appears to have been caught off guard by Lee's trashing of the one-China principle. State Department spokesman James Rubin reiterated Washington's recognition of Beijing as the sole legal government of China and said the U.S. was "concerned."

Lee may also be aiming to firm his legacy. If his gambit works, he could lift the ambiguity that has long shrouded cross-strait ties. He may also want to influence the presidential race next March, though just who would benefit from Lee's move is unclear. Vice President Lien Chan is tipped as the KMT's candidate, but the president is said to worry about the toughness of his protégé, who trails other candidates in opinion polls. Lee's move could boost Lien. It may also neutralize the popularity of China-born KMT rebel James Soong Chu-yu, who may run as an independent. If Soong is critical of Lee, the KMT could brand him a "mainland agent."

More intriguing is the prospect that Lee may secretly be helping the opposition Democratic Progressive Party. Lee has long been said to be privately sympathetic to the DPP, which last week chose charismatic former Taipei mayor Chen Shui-bian as its presidential candidate. The party, which has been moderating its pro-independence stance to win voter support, would be comfortable with Lee's new cross-strait equation.

Lee Teng-hui has proven himself a master political strategist who can get under the skin of his foes and friends alike. In 1996, his high-profile U.S. tour nearly brought China and Taiwan to blows. This time, a semantic point looks set to take the two sides down that same treacherous path. The region - and the world - will be watching nervously.

- With reporting by Jane Rickards / Taipei and Anne Meijdam / Beijing

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'FRIENDLY' RELATIONS
Obuchi ties a WTO deal - and little else

By Jonathan Sprague

PRIME MINISTER OBUCHI KEIZO wanted his hosts to be in a good mood during his visit to Beijing last week. China's President Jiang Zemin had been rather sour at the end of his trip to Japan last year after Tokyo snubbed his attempt to win a written apology for wartime aggression. Besides, Beijing was seething about increasing Japanese-U.S. defense links. So Obuchi brought along a reminder of Jiang's one great success from his trip - his gift of a pair of rare birds whose newly hatched chick has thrilled Japan. "I came to China with enthusiasm, to open a new phase in future relations, and with this picture of a baby crested ibis," Obuchi said. It must have worked, as the two sides sealed an accord on China's entry into the World Trade Organization (WTO) which they hailed as a symbol of "friendly" relations. But the Japanese leader's goody bag heading home did not look very full.

Topping Obuchi's agenda were security issues. China frets that Tokyo's new defense guidelines, which envision closer cooperation with Washington not just in Japan but within an ill-defined region, might prompt them to intervene should a crisis erupt over Taiwan. Obuchi reiterated that the pact was purely defensive, and that the guidelines were not aimed at specific countries or regions. For good measure, he added: "It is impossible for our country to support or take any action for Taiwanese independence." Beijing must find those words reassuring - a bit - especially now that Taiwan President Lee Teng-hui has trampled on the "one China" concept. Still, Chinese Premier Zhu Rongji told Obuchi: "We want you to prove what you have said by action in future."

Closer to his heart, Obuchi hoped to win Beijing's support in persuading North Korea not to launch a new ballistic missile. Pyongyang last year sent a missile flying over Japan and into the Pacific, and may be preparing to test a longer-range version. On that issue, Obuchi had limited success as well. "China has been making an effort to keep peace and stability on the Korean peninsula," Zhu told him. "We will continue to do whatever we can."

With the WTO deal, Obuchi did achieve a minor coup by becoming the first Group of Seven industrialized nation to resolve bilateral objections to China's entry. The contents are secret so there is no telling how sweet the deal is for either side. But leaks to Japanese media indicate that it parallels the much-applauded offers Zhu made during his visit to the U.S. in April - such as gradually allowing 49% foreign ownership of telecommunications carriers. Obuchi failed to persuade Beijing to resume WTO talks with Washington, given anger over NATO's bombing of China's embassy in Belgrade. "It is only when NATO has given a response that China is satisfied with that the talks can resume," Chinese Foreign Trade Minister Shi Guangsheng said. But on a positive note, Zhu told Obuchi that China has not withdrawn the concessions he offered in Washington, despite fears that they were another casualty of the embassy bombing.

Not much else emerged. Obuchi agreed to provide 10 billion yen to China's reforestation efforts. Tokyo's complaints about Chinese research vessels operating near disputed islands in the East China Seas were brushed aside pending talks on maritime issues. The two sides agreed to plan a cleanup of chemical weapons abandoned by the Japanese army following World War II. Says a Western diplomat in Beijing: "The greatest boost is economic, it's the WTO deal. Political issues are as they were before. China is obviously not satisfied with the U.S.-Japanese security pact and there is no way to sort that out." At least Obuchi avoided too much criticism about Japan's wartime behavior. Not that he got off completely. The official China Daily printed a full-page story on the Nanjing Massacre during his visit, and President Jiang reminded him of the need "to understand and treat history correctly."

But both sides probably emerged fairly happy. Obuchi bandaged a festering foreign policy sore, clearing the diplomatic decks as he heads into a leadership race at home. Jiang and Zhu signalled that they are still keen on WTO and, if Japan gave them a sweetheart deal as some think, may have boosted China's bargaining position vis-à-vis the U.S. and Europe. But Tokyo and Beijing have a ways to go before "friendly" relations turn into friendship.

- With reporting by Anne Meijdam / Beijing and Murakami Mutsuko / Tokyo

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Papua New Guinea Abandons Taiwan Recognition

PORT MORESBY, Jul 21, 1999 -- (Reuters) Papua New Guinea said on Wednesday it would abandon its controversial deal to establish diplomatic ties with Taiwan and that it would restore relations with Beijing under a "one China" policy.

The South Pacific nation's new prime minister, Sir Mekere Morauta, said his predecessor's decision early this month to recognize Taiwan had been flawed.

"Normal procedures for opening diplomatic relations with other countries, which have applied since independence, were not properly followed in the case of Taiwan," Morauta told reporters, referring to the deal struck by his predecessor, Bill Skate.

"Papua New Guinea's long-standing One China policy of maintaining state-to-state relations with the People's Republic of China therefore remains intact," Morauta added.

Cash-strapped Papua New Guinea on July 5 signed a deal in Taipei to recognize Taiwan, reportedly in return for $2.35 billion, sparking a regional diplomatic row with Beijing.

Skate, who resigned on July 7 ahead of an expected no-confidence vote in parliament, denied that Taiwan had bought diplomatic recognition.

Taiwan officials have also denied pledging cash or other aid in exchange for Papua New Guinea's decision to become Taipei's 29th diplomatic partner.

But, according to a confidential government paper obtained by Reuters, Skate had asked for $2.35 billion in aid in return for diplomatic recognition of Taiwan. The Papua New Guinea foreign ministry document was dated June 29 and was submitted to cabinet.

The deal outraged China, which regards Taiwan as an insubordinate province and incapable of sovereign ties.

Beijing, which routinely shuns those who recognize Taiwan, demanded that the mountainous country of 4.5 million people "correct its erroneous decision".

Australia, which granted Papua New Guinea independence in 1975, opposed the Taiwan deal, warning its poor neighbor that it risked not only angering China but causing diplomatic upheavals through the Asia Pacific.

Relations between Beijing and Taipei are especially tense after Taiwan's recent decision to scrap its "one China" policy and put relations with China on a "state to state" basis.

China has accused Taiwan of taking a step toward independence -- a prospect Beijing says it would resist by force of arms if necessary.

By Reuters

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Taiwan Drops Provocative Two-China Phrases

TAIPEI, Jul 21, 1999 -- (Reuters) Taiwan, seeking on Wednesday to promote and clarify its evolving China policy, backed away from controversial references to "two states" that had outraged Beijing's communist government.

Taipei also reassured Beijing that it did not plan to amend its constitution or China policy guidelines to codify its new view that contacts now were on a "special state to state" basis.

At the same time, Taipei drove home its explosive new bottom line -- that full-blown political negotiations demanded by China but long resisted by Taiwan could begin the moment the mainland government accords co-equal status to the Taipei government.

"We've made a statement that we have this special state to state relationship, meaning that we are equals," cabinet spokesman Chen Chien-jen told reporters.

"If we are equals, and the other side accepts that, then we are willing to talk about any issues -- including political issues," Chen said.

Beijing flatly denies equal status to Taiwan, regarding the island as an insubordinate province and its Republic of China as a political pretender whose sovereignty died with its 1949 civil war defeat on the mainland and flight to the island.

Chen acknowledged that cabinet officials had been mired for days in debate about what Chinese and English phrasing to use to describe Taipei's policy shift -- and had decided to drop some wording that has been perceived in Beijing and even in Washington as provocative.

The phrases "two states", "two Chinas", "one China, two states", "one nation, two countries" and other similar formulations had been considered, and even used publicly by some officials, but now would be junked, Chen said.

"We don't want to do anything to create confusion or misunderstanding," Chen said. "We think special state-to-state relations is good enough."

References to "two Chinas" or "one Taiwan, one China" touch an extremely sensitive nerve in Beijing, which promotes a "one China" policy asserting that the sole Chinese state is the People's Republic of China.

Beijing vows to invade if Taiwan seeks independence.

Taiwan also has backtracked on its "one China" policy, which officials had said was junked when President Lee Teng-hui said Taiwan was redefining Taipei-Beijing ties as a "state to state relationship or at least a special state-to-state relationship".

The Mainland Affairs Council said on July 12 that the "one China" concept had been abandoned as a goodhearted failure, but Lee resurrected it on Tuesday -- albeit in future conditional sense.

"One China is not now," Lee said. "There is a possibility of one China only after future democratic unification."

Taipei appeared to have sidestepped yet another row with Beijing by quickly shooting down suggestions that Lee's "special state to state" doctrine would be enshrined in the constitution.

China's Communist Party mouthpiece People's Daily said that encoding the new policy in law "would be a dangerous separatist step and an extremely grave provocation that, if carried out, would render peaceful reunification impossible".

The paper said the goal of ending Taiwan's half-century of estrangement from China was "loftier and larger" than any other.

Taiwan cabinet spokesman Chen said the island shared the goal of eventual national union, but reiterated Taiwan's insistence that the mainland first liberalize its political system, where Communist Party rule now is constitutionally mandated.

Chen said Taiwan's policy was to continue pursuit of three core objectives: dialogue and exchanges with the mainland; a win-win policy in cross-strait relations; and the goal of a peaceful, democratic, united China.

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China Issues New Warning To Taiwan

BEIJING, Jul 21, 1999 -- (Reuters) China told Taiwan on Wednesday peaceful reunification would be impossible if the island changed its constitution to reflect its new policy of "state to state" relations.

The People's Daily said legal changes to embed Taiwan's shock change of policy "would be a dangerous separatist step and an extremely grave provocation that, if carried out, would render peaceful reunification impossible".

"As everyone with even the slightest knowledge about the Chinese nation knows, reunification of the motherland is loftier and larger than everything else," the Communist Party flagship said in a front-page commentary.

China says it would invade Taiwan if the island, which it regards as a renegade province, declared independence. Chinese leader Jiang Zemin told U.S. President Bill Clinton on Sunday that Beijing did not rule out the use of force.

Many military experts doubt China's ability to carry out the threat, at least for five to 10 years.

But it could carry out menacing war games, as it did in the lead-up to Taiwan's 1996 presidential election. Then, Chinese ships fired missiles into Taiwan waters, prompting the United States to send two aircraft-carrier battle groups to the area.

U.S. Defense Secretary William Cohen, asked this week if he planned to send additional naval forces to the China-Taiwan area, told reporters at the Pentagon: "Not at this time."

A mainland-based news website http://www.easy.com.cn quoted an "authoritative Chinese source close to the military" as saying China would take unspecified military action against Taiwan to preempt Lee from taking further steps toward independence.

"We will strike if America doesn't intervene, and we will strike if America intervenes," the source was quoted as saying.

The military action would "leave a deep impression on Taiwan" and severely hurt its economy, the source added.

The report quoted other unnamed sources as saying China could impose a blockade of Taiwan's ship and air traffic, destroying vessels or aircraft that challenged the cordon.

The military newspaper Liberation Army Daily ran a long and detailed feature on Wednesday on a May 9 exercise in which paratroopers from the Jinan Military Region in eastern China stormed a beach.

China's own military shot down a report by a Beijing-backed Hong Kong newspaper -- often used as an unofficial tool of Chinese foreign policy -- that it was on alert over the row with Taiwan.

"Our top task is to fight floods," said one military spokesman as several Chinese provinces put out flood alerts.

Still, Beijing has been in a rage since Taiwan President Lee Teng-hui's abandonment last week of the "one China" policy and his insistence that talks on sorting out problems on the path to reunification be conducted on a "state to state" basis.

It has vilified the man state media has called "the scum of the nation" in personal attacks intended to differentiate between Taiwan's leadership and its ordinary citizens.

On Wednesday, the People's Daily said Lee would be "nailed to the pillar of eternal shame" for tampering with the one-China principle that had been the basis of China-Taiwan relations.

Lee says his insistence on equality in the relationship is not a precursor to a decisive break from China but repeated that Taiwan could only embrace a democratic China.

The second serious China-Taiwan showdown since 1996 has drawn international concern, especially in Washington, at Beijing's reiteration of its military threats.

Clinton said he had told Jiang in Sunday's telephone conversation that the United States would have serious concerns with "any abridgment" of peaceful China-Taiwan dialogue.

U.S. Secretary of State Madeleine Albright said senior diplomats would go to Beijing and Taipei this week in an effort to calm the tensions.

She said the missions would precede her meeting in Singapore on Sunday with Chinese Foreign Minister Tang Jiaxuan when she would make a direct appeal for a peaceful resolution.

Albright said Richard Bush, head of the American Institute in Taiwan, the agency that handles Washington's unofficial ties with the island, would leave on Wednesday for talks in Taipei.

U.S. Assistant Secretary of State Stanley Roth, who oversees East Asian and Pacific Affairs, would head for Beijing for consultations with Chinese officials.

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EU Urges China, Taiwan Not To Escalate Tension

HELSINKI, Jul 21, 1999 -- (Reuters) The European Union said on Tuesday it supports the principle of "one China" and urged Beijing and Taipei to avoid escalating their recent war of words.

"The EU hopes that every effort will be made to clarify misunderstandings and to maintain constructive dialogue," the EU said in a statement released by Finland, which holds the rotating presidency of the 15-nation bloc.

"The EU urges both sides to avoid taking steps or making statements which increase tension," it said.

Taiwan President Lee Teng-hui provoked a flare-up in tensions with China last week, by suggesting that ties between Taipei and Beijing should become "state-to-state" rather than be based on the principle that both were part of one China.

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Wide Taiwan-China Social Gulf Complicates Reunion

BEIJING, Jul 20, 1999 -- (Reuters) China's Communist leaders like to make the grand vow to "liberate" Taiwan's people one day from the island's Nationalist government.

But those "Taiwan compatriots" are quite happy with the way things are, thank you.

In the five decades since a civil war left the island estranged from the mainland, Taiwan's people have developed a sense of self that is at odds with Beijing's burning desire for its "reunification with the motherland".

Taiwan's people, having built one of the world's most vibrant economies and robust democracies, are more interested in maintaining what to them has been a very favorable status quo than in Beijing's appeals to Chinese nationalism.

"What people want is to maintain the stable society that we have had up to now," said Tsai Ben-wang, a government employee. "Most people don't care about the question of whether we should reunify with China or become independent."

That question was again thrust into world headlines in last week with President Lee Teng-hui's scrapping of the "one China" policy, a recognition that there is one indivisible China. That was the cornerstone of tense ties with the mainland and was seen as a pillar of Asian stability for decades.

But overlooked in the debate over whether there is only "one China" is the fact that democratic Taiwan and Communist China have evolved into two increasingly distinct societies.

Similarities in language and race notwithstanding, Taiwan's people, the vast majority of whom have little or no link to the mainland, feel only an ebbing kinship with their cousins across the Taiwan strait.

"There is a big difference now between the two peoples," says Chen Jin-lin, a travel agent who makes frequent trips to mainland China. "It is one of the most important points keeping people on both sides from accepting each other."

A rising tide of cross-strait tourism and business ties since the late 1980s has, rather than bring the two closer together, served to highlight the social gulf that separates them.

Visitors from rich Taiwan tend to see mainlanders as uncouth, communist bumpkins. High-profile killings of Taiwan visitors on the mainland have fed an image of chaos and lawlessness.

Mainland Chinese, in turn, see Taiwan tourists and the thousands of business managers who have come to run Taiwan-invested businesses as rich, arrogant and contemptuous.

The growing social gap will make reunion harder if the two governments do not act, said Andrew Yang, a Taipei expert on cross-strait relations and military affairs.

"What both sides need are economic and cultural exchanges. Without that, reunification is not possible because if the two sides pursue their own isolated development, there will be no overlapping interest," Yang said.

Despite calls from both sides for national union, Taiwan has had few links to China for much of its history.

Originally settled by Malayo-Polynesians, Taiwan's first Chinese settlers came in the 12th century. The island was briefly controlled by Dutch traders, then refugees from China's defeated Ming court in the 17th century before spending 300 years under the tenuous control of the Qing empire. The Qing largely left it alone before ceding it to Japan as war booty in 1895.

Japanese colonial rule left a lasting impression and Taiwan still often follows Japan's lead in matters cultural. Many older residents, who received Japanese educations before 1945, consider Japanese to be as native a tongue as the local Chinese dialect.

Taiwan's historic aloofness from China is cited by a vocal movement for independence championed by "native" Taiwanese -- descendants of the early waves of Chinese immigrants who make up the majority of the island's population.

This group has stood in contrast, and sometimes conflict, with more than a million mainlanders who flooded in after the Nationalists lost a civil war to China's Communists in 1949.

A decade of democracy has largely healed the rift between Taiwanese and mainlanders and public opinion polls show a solid majority favor keeping things as they are, whether their ultimate preference is independence or a Chinese union.

"The most important thing to Taiwan people these days is finding jobs and making money," said Chen Yi-jen, a recent college graduate.

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China Tells Clinton That Force On Taiwan An Option

BEIJING, Jul 19, 1999 -- (Reuters) Chinese President Jiang Zemin told U.S. counterpart Bill Clinton that Beijing had not ruled out the use of force against Taiwan in the latest crisis between the two rivals, the official Xinhua news agency said on Monday.

Jiang's remarks to Clinton by telephone on Sunday, splashed on the front page of major newspapers, were his first comments since Taiwan precipitated the crisis a week ago by junking its "one China" policy which had long kept the peace between them.

"We are not committed to abandoning the use of force on the issue of Taiwan," Xinhua quoted Jiang as saying.

"The reason is very clear, that is, there are certain forces in both Taiwan island and the world that attempt to separate Taiwan from the motherland," Jiang said.

Washington has issued a clear warning to Beijing, saying any effort to determine the future of Taiwan by other than peaceful means would be of "grave concern" to the United States.

Taiwan, frustrated at its diplomatic isolation, has said contacts with China would now have to be conducted on a "special state-to-state" basis, rather than between "political entities", the old formula.

Beijing, which regards Taiwan as a renegade province that must be brought under its rule, denounced the move as a step towards Taiwan independence and heaped abuse on Taiwan President Lee Teng-hui, architect of the policy change.

Lee had taken a "very dangerous step", Jiang said.

Clinton reiterated Washington's one-China policy to Jiang.

"The president reiterated our one-China policy," U.S. national security spokesman David Leavy said. "He expressed that both sides could maintain a dialogue and resolve their issues peacefully. It was a very good, very positive call."

Xinhua quoted Clinton as saying: "I want to assure you that policy will not change, you should have full confidence in the statements I have made to you in our previous meetings."

Clinton described U.S.-China relations as very important and said he would work hard to improve ties, Xinhua reported.

Sino-U.S. ties are at a low ebb after NATO's bombing of China's embassy in Belgrade in May. They are also plagued by disputes ranging from human rights to Tibet to trade.

Jiang said China was committed to peaceful reunification with Taiwan but would not tolerate foreign intervention in the issue.

"Our basic principle for solving the Taiwan issue remains 'peaceful reunification and one country, two systems'," Jiang said, referring to the formula under which Hong Kong reverted to Chinese rule in 1997.

Macao is to follow in the former British colony's footsteps in December.

"We will never sit idle if some people engage in 'Taiwan's independence' and foreign forces interfere in China's reunification cause," he said.

"The realization of the reunification of the motherland is the strong determination of the Chinese government."

Taipei, which agrees reconciliation is a shared goal but says it will only embrace a democratic China, has been estranged from the mainland since the Nationalists lost a civil war to the communists and fled into exile on the island in 1949.

"We have warned the Taiwan authorities to rein in at the edge of a precipice and stop various actions of splittism to avoid serious consequences to the relations and situations across the Taiwan Straits," Jiang said.

Taipei's policy change has rippled through Asian financial markets, jolting China's own markets in Hong Kong, Shanghai and Shenzhen. Taiwan authorities marshaled billions of dollars of state funds on Saturday to stem a sharp stock-market slide.

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China's Top WTO Negotiator Seeks To Quell Fears About Entry's Impact

SHANGHAI, Jul 19, 1999 -- (Agence France Presse) China's top negotiator on entry into the World Trade Organization (WTO), Long Yongtu, Monday was quoted seeking to quell domestic fears about the impact of joining the trade watchdog.

"In history, there has never been a situation of a sovereign country being overwhelmed by the effect of an international organization," the vice trade minister told a recent high-level meeting, according to the official Baokan Wenzhai daily.

Long downplayed the overall importance of the WTO, describing it as a mere forum for cooperation.

"We shouldn't think the WTO is so dangerous, but at the same time we shouldn't overestimate the advantages of joining ... Analyzing the situation from facts, joining the WTO has no great advantage and no great disadvantage," he said.

The vice minister appeared especially keen to shoot down accusations from the Communist Party's protectionist camp that the government was sacrificing vital national interests to obtain membership.

He singled out a series of "inaccurate views" common in the national debate on WTO, taking pains to deny recent moves to open China's markets were made as concessions.

Referring to an April decision to lift a ban on US wheat imports, Long said: "In reality, we made no concession, it was just a correction of past mistakes."

China had imposed the ban due to concerns over the fungus TCK (tilletia controversa kuhn) but decided to accept an international determination that the fungus is harmless.

He also defended China's pledges to cut average tariff rates to 15 percent by 2001 and 10 percent by 2005.

The country's current average rate applied to imported manufactured goods is 16.8 percent, compared to 14 percent for other developing countries, three percent for developed countries and six percent for WTO members.

"From these figures, it can be seen that our cutting of tariffs is part of an international trend and not a concession," he said.

NATO's deadly missile attack on China's Belgrade embassy in early May brought negotiations with the United States and the European Union -- the WTO members placing the highest demands on China -- to a virtual standstill.

Hostility toward the US since the strike has made pro-WTO forces in Beijing vulnerable to accusations of selling out the country to appease Washington.

By Agence France Presse

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Taiwan-China Tensions To Steal Show At ASEAN Meet

SINGAPORE, Jul 19, 1999 -- (Reuters) Taiwan-China tensions are expected to steal the spotlight at this week's meeting of Southeast Asian foreign ministers in Singapore.

Although regional territorial disputes will be a key topic during official meetings of the Association of South East Asian Nations (ASEAN), which begin on Friday, simmering security issues such as Taiwan-China tensions will be a focus on the sidelines.

In a security dialogue after the main foreign ministerial meetings, Tokyo is expected to urge ASEAN and its dialogue partners to help persuade North Korea not to test-fire another long-range missile.

U.S. Secretary of State Madeleine Albright is scheduled to meet her Chinese counterpart, Foreign Minister Tang Jiaxuan, on the sidelines of the 32nd ASEAN Ministerial Meeting (AMM).

Both nations are attending the meeting as dialogue partners.

Political analysts have said the China-Taiwan spat will give the U.S. and Chinese administrations a chance to begin talking to each other following a deep freeze in relations since early May when U.S. warplanes bombed China's embassy in Belgrade.

An ASEAN official said Taiwan Strait tensions were unlikely to be discussed within the auspices of the regional grouping as China, which sees Taiwan as a renegade province that must be brought under its rule, regards it as a domestic issue.

Still, the heightened tensions between China and Taiwan will highlight one of the more pressing issues for the ASEAN meeting -- that of regional security.

Disputes over ownership of the potentially mineral-rich Spratly islands remains an area of contention among ASEAN members and will be taken on by this week's ministerial meeting.

The Spratly islands lie in the South China Sea and are claimed wholly or in part by the Philippines, China, Brunei, Taiwan, Malaysia and Vietnam.

ASEAN groups Cambodia, Brunei, Laos, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The Philippines and Malaysia argued recently over Malaysia's building of structures on the reef, while relations between the Philippines and China over the Spratlys were also strained.

Philippines Foreign Secretary Domingo Siazon will submit a code of conduct on the Spratlys for discussion among ASEAN ministers.

He said he expected general agreement on the code except for a clause barring construction or expansion of structures on the Spratlys.

North Korea's missile program is another issue likely to be raised by Japan at the ASEAN Regional Forum (ARF), a key regional security dialogue that will take place on July 26 after ASEAN's main ministerial meetings.

A Japanese foreign ministry official said Japan was likely to urge ASEAN and its dialogue partners to cooperate with each other to persuade North Korea not to test-fire another missile.

The Regional Forum comprises ASEAN and its 12 dialogue partners. During a Post Ministerial Conference from July 27-28 ASEAN will meet its regional dialogue partners individually.

ASEAN's dialogue partners are Australia, Canada, China, the European Union, India, Japan, Mongolia, New Zealand, Papua New Guinea, Russia, South Korea and the United States.

ASEAN's newer members, Cambodia and Myanmar, have featured in the world arena for domestic political developments, but the regional grouping is likely to stick to its policy of non-interference in its relations with member countries.

Despite calls by Myanmar opposition leader Aung San Suu Kyi for ASEAN to encourage dialogue between her National League for Democracy and the country's generals, and Amnesty International's urging for pressure on Yangon over human rights, ASEAN is not expected to shift from this stance.

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House Resolution Calls For China To Pay US Damages

WASHINGTON, Jul 19, 1999 -- (Agence France Presse) The chairman of a key House panel introduced a bill Friday calling for Beijing to pay for riot damage to US buildings in China before Washington pays for bomb damage to the Chinese embassy in Kosovo.

"Let us not forget that the Chinese retaliated against our accidental bombing with government-sanctioned violent protests against American facilities in China," said Representative Benjamin Gilman, Republican from New York and chairman of the House international relations committee.

"We should not pay for the damages done to the Chinese embassy in Belgrade unless the Chinese government first reimburses us for the damages they have deliberately done to our facilities in China, including the United States embassy in Beijing," he said.

Gilman's nonbinding resolution came after two senior US officials ended two days of talks in Beijing on compensation for NATO's May 7 bombing of the Chinese embassy in Belgrade.

They said progress had been made and further talks were scheduled for the end of the month.

China has ruled out considering damage to US missions here during days of angry demonstrations following the bombing, which killed three Chinese journalists and injured 20 others.

By Agence France Presse

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U.S. Retains One-China Stance, Clinton Tells Jiang

WASHINGTON, Jul 19, 1999 -- (Reuters) President Bill Clinton reiterated the United States' one-China policy to Chinese President Jiang Zemin during a half-hour telephone call on Sunday, the White House said.

"The president reiterated our one-China policy," national security spokesman David Leavy said. "He expressed that both sides could maintain a dialogue and resolve their issues peacefully. It was a very good, very positive call."

The call appeared designed to try to smooth over a dispute that erupted last week when Taiwan President Lee Teng-hui said the island now considered its dealings with Beijing to be at a "state-to-state" level, jettisoning the one-China policy that has been the cornerstone of East Asian security for decades.

That policy, based on the idea of a single, indivisible China that includes Taiwan, has been a mutually accepted formula that has prevented war between the two sides for decades.

China reacted by warning that Taipei had stumbled to the edge of a dangerous "precipice" and repeating a threat to take Taiwan by force if it moved toward independence. It then confirmed something that scientists had long known but that carried extra punch in the tense atmosphere: Beijing had the neutron bomb.

The official Chinese news agency reported that Jiang had told Clinton that Beijing had not ruled out the use of force to resolve the Taiwan issue.

Asked whether Jiang had said this, Leavy replied, "I don't want to characterize President Jiang's comments, but that was not my understanding of the call."

Leavy said the two had discussed a range of bilateral issues. He said the subject of resuming talks on China's admission to the World Trade Organization had not arisen.

"They talked about cross-strait issues, including Taiwan, and U.S.-China bilateral issues more broadly," Leavy said, noting that Clinton had placed the call from the Camp David presidential retreat, where he spent the weekend.

Sino-U.S. relations were damaged this year, first by Clinton's failure to clinch a deal for China to join the WTO during Washington talks in April and then by the May 7 U.S. bombing of the Chinese Embassy in Belgrade during NATO's air campaign against Yugoslavia.

The United States says the bombing, which killed three Chinese journalists, was an accident. China has demanded compensation for what its official media have called an intentional attack.

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China's Jiang Ends Mongolia Visit, Hails Ties

ULAN BATUR, Jul 19, 1999 -- (Reuters) Chinese President Jiang Zemin wrapped up a three-day visit to Mongolia on Saturday as both countries pledged to boost economic ties.

"Through the exchange of both countries' top leaders, economic cooperation will widen," Jiang was quoted by Chinese officials as saying.

Mongolia's Prime Minister Janlaviin Narantsatsralt is scheduled to visit China later this year.

During the visit, Mongolian President Natsagiin Bagabandi told Jiang that Mongolia supported Beijing's "one-China" policy and regarded Taiwan as a part of China.

Taiwan scrapped its "one China" policy this week, insisting that Taiwan-China relations be handled as "state-to-state" contacts, a move that has infuriated Beijing.

Bagabandi also said Mongolia, which is already a member of the World Trade Organization (WTO), supported China's entry to the trade body.

While China has sealed recent WTO deals with Japan and Australia, it has put the key negotiations with the United States on hold because of NATO's bombing of Beijing's embassy in Belgrade in May.

China is Mongolia's second largest trade partner. Mongolia imported goods worth $63 million from China in 1998, while China spent $95.3 million on Mongolian products.

The neighboring countries agreed to seek new opportunities for Chinese investment, increase cargo transportation by railway and open direct road links between Mongolia and China's northern port of Tianjin, officials said.

China announced a 30 million-yuan ($3.6 million) aid grant to Mongolia for construction projects and agreed that 30 million yuan of a previously announced soft loan would be also used for various building projects, they said.

The two sides signed agreements on cooperation on fighting forest and grassland fires, and providing health services to each other's citizens at local prices, officials said.

They also discussed a natural gas pipeline from Russia to China, which Mongolia is eager to have pass through its territory. But the Chinese side said more research was needed before deciding the route for the pipeline.

"The market will decide," said Chinese Foreign Ministry spokesman Zhu Bangzhao. "There are still be several details to be discussed."

Mongolian officials said more research on Russia's resources and the size of China's market were needed before Beijing made a final decision.

Mongolia has recently sought more contacts with its southern neighbor of China while at the same time cultivating traditionally close links with Russia to help economic ties with both countries, political analysts have said.

Relations between China and Mongolia have improved since Russian troops left Mongolia in 1991, they said.

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New Zealand PM Offers Auckland As Venue For US-China Summit

BEIJING, Jul 19, 1999 -- (Agence France Presse) The APEC leaders summit in Auckland could form a neutral venue for the presidents of China and the US to discuss souring bilateral ties, New Zealand Prime Minister Jenny Shipley said Monday.

"The offer has been made but I do not expect to get a response. Clearly it is a matter for the US and China," Shipley told journalists on the second day of her three-day visit to Beijing.

"I simply just want to offer New Zealand as a neutral venue and if there is anything we can do to facilitate discussions that would allow current issues to be resolved we would be delighted," she said.

Chinese President Jiang Zemin and US President Bill Clinton are expected to attend the September 18 leaders summit of the Asian Pacific Economic Cooperation Forum (APEC) in Auckland.

Shipley was scheduled to meet with Jiang later Monday.

She was told by Premier Zhu Rongji on Sunday that Jiang's visit would be a good impetus to Sino-New Zealand relations and would mark the first ever Chinese presidential visit to the island nation.

"We are very hopeful that he will extend his visit at that time as an official state visitor," Shipley said.

In her meetings with Zhu, the two discussed a wide range of issues, including developing the tourist trade between the two countries, extending a current aviation agreement and the possibility of a Chinese airline opening up services to New Zealand.

"I was encouraged to receive the assurances of the prime minister that quota issues (on wool) and the administration of this market are to be resolved. I know this will bring enormous relief to our producers in New Zealand," she said.

According to New Zealand statistics, trade with China totaled $1.83 billion in 1998, with imports from China growing 16 percent over 1997 to 1.18 billion dollars. Additionally New Zealand exported $588 million worth of goods to Hong Kong in 1998.

Zhu further briefed Shipley on China's recent efforts to enter the World Trade Organization, including US-China bilateral discussions which were postponed due to the May 7 mistaken NATO bombing of the Chinese Embassy in Yugoslavia, she said.

"We certainly do hope that the factors that caused the delay in the talks ... including the issue of the tragic bombing of the Belgrade embassy, can be resolved so that China's WTO entry can be concluded in the near future," she said.

By Agence France Presse

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Report: Embassy Bombing Row Delays "Star Wars" China Opening

BEIJING, Jul 19, 1999 -- (Agence France Presse) The latest episode of the Hollywood blockbuster "Star Wars" has yet to open in China, possibly because of tense Sino-US relations following the bombing of the Chinese embassy in Belgrade, a Hong Kong newspaper reported Saturday.

The Oriental Daily said Yu Siu-chi, a promotion executive from the film release company 20th Century Fox, "confirmed 'The Phantom Menace' had been banned and that it might be due to the embassy bombing."

The report could not be independently confirmed Saturday.

The long-awaited episode of the "Star Wars" saga was originally scheduled to be released in Chinese cities this month, but Beijing had postponed the release date indefinitely, the paper reported.

"The Phantom Menace" hit a new US box-office record by raking in 300 million dollars in sales in just 20 days from its US release on May 19, according to the Hollywood Reporter.

It took the blockbuster "Titanic" 44 days to bring in the same amount of money.

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HK Chief Executive Calls Taiwanese President's Remarks Unwise

HONG KONG, Jul 19, 1999 -- (Agence France Presse) Hong Kong's chief executive Tung Chee-hwa Friday described Taiwan President Lee Teng-hui's assertion the island was a separate state from China as "unwise", adding that cross-straits tension could hurt Hong Kong's hopes of a speedy economic recovery.

"I think a one-China policy is the very foundation of discussion moving forward between the parties involved. And that this particular one-China policy is actually very much accepted internationally as well as by Chinese people everywhere, on the mainland, in Taiwan, overseas and in Hong Kong.

"That's why what Mr. Lee Teng-hui said the other day was unfortunate, unwise," Tung said.

Tung added that cross-straits tension can have a negative impact on Hong Kong's hopes of recovering from the worst recession on record by next year.

"Of course tensions would not be good for economic development. ... Our government would very much hope the situation can be resolved in a satisfactory manner," Tung said.

Tensions between Taiwan and China escalated after Lee last week said Taiwan should be treated as a state in its dealings with the mainland, which considers the island a renegade province.

Lee's statement angered China, which maintains Taiwan is an inalienable part of Chinese territory that should eventually submit to Beijing's rule.

Southern Chinese states have been put on a military alert following Teng's comments.

Tensions also pushed Hong Kong's Hang Seng Index down a sharp 4.8 percent in the week to Friday.

The key Hang Seng index lost 677.33 points over the week to close Friday at 13,545.24 on an average daily turnover of HK$10.7 billion ($1.4 billion).

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Taiwan Authorities Seek To Calm Public Amid Tensions With China

TAIPEI, Jul 19, 1999 -- (Agence France Presse) Taiwan sought Monday to calm a jittery public over rising tension with Beijing, insisting there was no evidence of a military build-up by mainland troops.

"There is no hostility from the other side that could lead to confrontation," Taiwan government spokesman Chen Chien-jen quoted Defense Minister Tang Fei as saying.

"The defense ministry has worked out countermeasures against possible developments," Chen said at the end of a cabinet meeting called to discuss the most serious deterioration in cross-strait relations in three years.

Siew "urged the public to have the faith in the government" and also ordered the setting up of an inter-ministry task force to handle the heightened tensions, Chen said.

Beijing reacted furiously to comments by Taiwanese President Lee Teng-hui last week calling for Beijing-Taipei relations to put on a "state-to-state" level, a move seen as questioning the long-standing "One China" policy.

Hong Kong and Chinese newspapers have already reported some military exercises in response to Lee's comments, which have been angrily condemned in the Chinese media and by officials as an attempt to divide the country.

China's Life Times Daily reported Sunday that "several special forces detachments of the People's Liberation Army have gathered and are holding large-scale military attack exercises in a certain military region."

The Taiwan defense ministry Sunday dismissed the report and condemned Beijing for launching a propaganda war intended to scare Taiwan.

On Monday Taiwan's defense ministry also rejected comments by Tsao Yuan-chang, National Assembly deputy from the New Party, that Taiwanese troops stationed on the island of Matsu had been put on alert.

Tsao, elected from the outlying island, said troops there had called off vacation and that the number of Chinese fishing boats operating near Matsu had fallen dramatically.

Major General Cheng Shih-yu told reporters: "The ongoing operations of the Chinese communist troops have not gone beyond the level to prompt the defense ministry to enhance the level of alertness."

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Taiwan Appeals For Peaceful Solution To Row With China

TAIPEI, Jul 19, 1999 -- (Agence France Presse) Taipei Monday called for a peaceful solution to its war of words with China, but warned it would not bend to pressure from Beijing.

The comments came after Chinese President Jiang Zemin told US President Bill Clinton late Sunday that the use of force against Taiwan remained an option.

Clinton meanwhile said Washington's "One-China policy" remained unchanged even though Taiwan President Lee Teng-hui said that Taipei-Beijing ties were "special state-to-state relations."

Taiwan "was pleased to see any dialogue that would be helpful to the region's peace and stability," Henry Chen, acting spokesman for Taiwan foreign ministry, told reporters.

But he said Taipei would not bow to Beijing's pressure and see itself isolated by Beijing internationally.

Rather, Chen said, Taipei will take active steps to play a greater role in the international community in order to let "the reality of our existence be better understood by the world and that our voice be heard."

Both Taipei and Beijing, split in 1949 at the end of a civil war, claim they are the sole legitimate government of the whole of China.

According to the Xinhua news agency, Jiang told Clinton that China wanted peaceful reunification with Taiwan "however, we are not committed to abandoning the use of force on the issue."

Beijing has cranked up its rhetoric as Taipei-Beijing tensions have soared to a three-year high since Lee's comments more than a week ago.

And Hong Kong and Chinese newspapers have already reported some military exercises as a result of Lee's comments, which unleashed a stream of invective at his "splittist" views from Chinese media and officials.

China's Life Times Daily reported Sunday that "several special forces detachments of the People's Liberation Army have gathered and are holding large-scale military attack exercises in a certain military region."

The Taiwan defense ministry Sunday dismissed the report condemning Beijing for launching a propaganda war intended to scare Taiwan.

Washington broke off diplomatic ties with Taipei in favor of Beijing in 1979, but has never stated whether it would defend Taiwan in the event of a Chinese attack, and continues to sell it defensive weapons.

The closest the two sides have come in recent years to a military confrontation was in March 1996, when Clinton sent two battle carrier groups to waters near Taiwan to deter Beijing's wargames during which it lobbed missiles into the shipping lanes off Taiwan.

By Agence France Presse

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Taiwan Says On Normal Alert Amid Threats

BEIJING, Jul 19, 1999 -- (Reuters) China, keeping up a steady stream of threats in a bitter row over Taiwan's political status, said on Sunday it did not rule out using force to crush any attempts by the island to declare independence.

But Taiwan reiterated that China's fury over the policy shift had not prompted any heightened military alert as the 2.5 million-strong People's Liberation Army (PLA) had done nothing to merit extra vigilance.

China's latest threat was splashed on the front page of Hong Kong's Beijing-backed Wen Wei Po newspaper with a picture of waves of amphibious vessels and vehicles making beach landings.

The newspaper quoted an unidentified military official as saying the "military measures would be taken only if there were no other alternatives".

"When peaceful reunification is hopeless and 'Taiwan independence' forces are splitting the motherland, we will not rule out the use of force to resolve the Taiwan problem," the official was quoted as saying.

"We have ample power. This point is not to be doubted."

Taiwan, frustrated at its diplomatic isolation, touched off the spat last week by junking the longstanding "One China" policy that has kept the peace for decades.

Taipei said contacts with Beijing now would have to be conducted on a "special state-to-state" basis, rather than between "political entities", the old formula.

Beijing, which regards Taiwan as a renegade province that must be brought under its rule, denounced the move as one towards Taiwan independence and heaped abuse on Taiwan President Lee Teng-hui, architect of the about-face.

Taipei, which agrees reconciliation is a shared goal but says it will only embrace a democratic China, has been estranged from the mainland since the Nationalists lost a civil war to the Communists and fled into exile on the island in 1949.

Taiwan's defense ministry flatly denied a spate of Hong Kong and Singapore media reports that the PLA had stepped up training drills and even sent jet fighters deep into the Taiwan strait that separates the two rivals.

"Don't believe those reports," top military spokesman Kung Fan-ting told Reuters in a telephone interview.

"We've detected nothing abnormal. There are no abnormal troop concentrations and their aircraft and ships have not crossed the middle line in the Taiwan Strait."

A Taiwan public opinion poll published on Sunday found that 73.3 percent of island residents supported President Lee's controversial "two state view" of Taiwan-China relations.

Washington has issued a clear warning to Beijing, saying any effort to determine the future of Taiwan by other than peaceful means would be of "grave concern" to the United States.

Meanwhile, the official People's Daily said in a front-page commentary Taiwan's "farcical" attempt to break out of diplomatic isolation was "doomed to fail".

"Lee Teng-hui must be held responsible for his words and deeds to split the motherland," the commentary said.

Taipei's policy change has rippled through Asian financial markets, also hurting China's own markets in Hong Kong, Shanghai and Shenzhen.

Taiwan authorities marshaled billions of dollars of state funds on Saturday to stem a sharp stock market slide.

Wen Wei Po said "wartime mobilization drills" involving more than 100 civilian vessels were held off the frontline province of Fujian facing Taiwan on Friday.

Seamen gathered for the drills, conducted by the Nanjing Military Region, sang: "We will liberate Taiwan", it said.

Su Jing, deputy chief of staff of the Nanjing military region which includes Fujian, watched the 12-hour drill in the frontline area about 160 km (100 miles) from Taiwan, it said.

Beijing and Taipei were at a crossroad -- war or peace, said Zhou Zhihuai, deputy director of the Institute of Taiwan Studies of the Chinese Academy of Social Sciences.

"The Taiwan issue is the most probable cause for a clash breaking out between the United States and a major power after the end of the Cold War," Zhou told Reuters.

In 1995 and 1996, China conducted war games near Taiwan in the run-up to the island's first direct presidential elections after Taipei tried to break out of diplomatic isolation.

The United States sent two aircraft carrier battle groups to the area, straining ties with China for more than a year.

By Reuters

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Rogue Bid Splinters Taiwan Ruling Party

Jul 19, 1999 -- Taiwan's ruling Nationalist Party splintered on Friday as a popular senior insider launched a rogue presidential bid with an implicit attack on President Lee Teng-hui for fanning frictions with rival China.

"Taiwan needs a courageous but not reckless leader," James Soong said in a widely anticipated announcement.

Even as Soong spoke, Taiwan's stock market was enduring the steepest one-day points drop in nine years, a 6.4 percent tumble blamed on President Lee's latest war of words with Beijing and fears that Taiwan's huge Communist rival might even attack.

Soong carefully avoided criticizing the leader he had long served as a loyal deputy, saying he would "always be together with the people who support the Nationalist Party".

But his move drew a strong attack from the ruling party, whose preferred candidate for the March 2000 polls, Vice President Lien Chan, trails Soong badly in opinion polls.

"Soong's announcement marks a formal split with the ruling party," said Liao Dachi, a political science professor at Sun Yat-sen University in southern Kaohsiung.

"The impact on the Nationalist Party will be phenomenal."

Soong would not say if he would leave the party. Analysts said he risked expulsion.

Soong became one of Taiwan's most popular politicians during years of grassroots party building as head of Taiwan's provincial government, though he left the post against Lee's wishes as the largely redundant provincial bureaucracy was dismantled.

Soong's long-anticipated bid threw the presidential field wide open, though analysts say he faces daunting odds in challenging the venerable Nationalists.

The party, which ruled all of China before its Republic of China government was ousted by communist forces in 1949 and fled to Taiwan, has built itself into one of the world's richest and best-organized political machines.

Soong has floated many controversial views on Taiwan-China ties that put him at stark odds with his party and President Lee.

Soong recently told the Washington Post he favored lifting the Nationalists' ban on the "three links" -- direct post and communications, commerce and transport with the mainland.

The government, citing Beijing's standing threat to invade the island, says easing the ban would boost Taiwan's political vulnerability by sharply increasing its already huge though unofficial economic ties with China.

Soong, who holds a doctorate from Georgetown University in the United States, also favors a prompt start to political talks with Beijing, which Taipei says is impossible until mutual trust is established.

Many of Soong's positions on China also anger the opposition Democratic Progressive Party, which leans toward Taiwan's eventual independence from the mainland, though it, too, has splintered over how to relate to China.

More vexing yet for the opposition is Soong's lead over its presidential candidate, former Taipei mayor Chen Shui-bian.

Analysts said it was too early to say whether Soong would benefit or suffer for challenging Lee while the president endures withering verbal assaults from Beijing for demanding that Taiwan be regarded as an equal state in bilateral talks.

"President Lee's two-state talk has stolen the limelight from all presidential candidates," Liao said. "If cross-strait tensions mount, we may find voters will opt for the ruling party for the sake of stability."

Beijing, which regards Taiwan as an insubordinate province that must be brought under its rule, assailed the move as a grab for Taiwan's independence and dusted off its standing threat to thwart any such move by military force.

Soong has not said whether he supported Lee's repudiation of "One China" doctrine, which has been seen as underpinning Taiwan Strait and East Asian security for decades by implying that the island did not seek independence.

"Soong may find himself in a dilemma. He knows many of his supporters don't like Lee's two-state comment, but he also knows a significant number of voters support the idea," said political analyst Tim Ting.

"The longer he waits to clarify his China policy, the more voters he will alienate."

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Taiwan's China Shift Wins Support Despite Tension

TAIPEI, Jul 19, 1999 -- (Reuters) A Taiwan public opinion poll published on Sunday found that 73.3 percent of island residents support President Lee Teng-hui's controversial "two state" view of Taiwan-China relations.

The ratio of support was far higher than that seen in a poll on Saturday, which said 43 percent of residents supported and 28.3 percent opposed Lee's view that Taiwan-China talks must be conducted on a "special state-to-state" basis.

The Sunday poll said 74.2 percent of respondents agreed with the view that relations across the Taiwan Strait already were on a state-to-state basis, and 79.1 percent said Taiwan should press ahead with efforts to forge formal ties with other countries.

The poll of 1,103 respondents, conducted on July 14-15, was commissioned by a Europe-Asia research institution and had a margin of error of three percent, the state-funded Central News Agency reported.

Taiwan, frustrated at its diplomatic isolation, has touched off a row with Beijing last week by junking the longstanding "One China" policy -- a mutually accepted formula that has prevented war between them and helped underpin East Asian security for decades. The policy offered comfort to Beijing that Taiwan was committed to reunion and not independence.

By Reuters

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China Ready To Intervene If Taiwan Declares Independence

BERLIN, Jul 18, 1999 -- (Agence France Presse) China reserves the right to intervene militarily if Taiwan declares independence, China's ambassador to Germany, Lu Qiutian, has told the Sunday paper Welt am Sonntag.

Lu Qiutian evaded the issue of the possible use of the neutron bomb, which Beijing announced on Thursday that it had developed.

Taiwanese President Lee Teng-hui's declarations on state-to-state relations with China were an extremely dangerous step on the road to the division of China, said the ambassador.

It constituted a serious provocation of the one-China principle recognized by the international community, he added.

Even if peaceful reunification is China's declared policy, Beijing will not commit to renouncing the use of military means, stressed Lu.

"If Taiwan declared independence or if foreign troops invaded -- thus dividing China -- the Chinese government will under no circumstances stand by and do nothing," he said.

Recent statements by the Taiwanese president have increased tension between Beijing and Taipei.

According to the Hong Kong press, China has held military maneuvers in the Straits of Taiwan and put its southern air bases on alert.

By Agence France Presse

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China Says Taiwan Has Destroyed Basis For Cross-Strait Dialogue

BEIJING, Jul 18, 1999 -- (Agence France Presse) Taiwan President Lee Teng-hui's remarks on the island's statehood have destroyed the basis for dialogue between Taiwan and the mainland, China's state-controlled press said Sunday.

A front-page article in the leading People's Daily carried some of Beijing's strongest rhetoric since Lee's July 9 insistence that relations with China were on a "state-to-state" basis.

"The one China principle is the basis and prerequisite for developing cross-strait relations and reuniting the motherland," the report said.

"On this basic issue Lee Teng-hui has destroyed the foundation for developing relations across the straits, making the basis for contacts, exchanges and dialogue between SEF and ARATS non-existent."

The statement signaled Beijing's apparent readiness to renounce political means as a way to resolve the long-standing reunification issue.

No official government position was immediately available, but the foreign ministry last week said China was prepared to cut off exchanges between the mainland's Association for Relations Across the Taiwan Straits (ARATS) and the Taiwan Straits Exchange Foundation (SEF) if Taiwan did not adequately clarify Lee's comments.

China has vowed to use military force to reunite Taiwan if the rebel island declares independence or if foreign forces interfere in the reunification issue.

Lee's statement has apparently redefined Beijing's definition of "Taiwan independence," and elicited an angry rebuttal.

Taiwan has been independently administered since the Nationalist Party fled the mainland following a bloody civil war which ended in 1949.

State press on Saturday called Lee an "historical sinner" bent on dividing China and splitting the motherland.

Sources said Friday that China had ordered a low-level military alert in its southern regions facing the Taiwan Strait.

Hong Kong newspapers on Saturday reported preparations for mainland military exercises aimed at underscoring Chinese determination to defend its sovereignty and territorial integrity.

Airport traffic at the Fuzhou airport in Fujian Province, which sits across the straits from Taiwan, was moderately interrupted on Sunday, but sources at the airport refused to confirm that services were interrupted due to military activity.

By Agence France Presse

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Taiwan faces China backlash from statehood claim

TAIPEI, Jul 18, 1999 -- (Agence France Presse) Taiwan faces a painful backlash to President Lee Teng-hui defiance of Beijing's "One-China" policy but analysts and politicians say they doubt the statement will result in military action.

However, Taipei needs to be extremely careful how it handles the heightened tension with China, they warn.

"We're now at the center of the storm," said Shen Fu-hsiung of the pro-independence opposition Democratic Progressive Party (DPP).

"Damage control must be done," he said as Beijing raged at Taiwan's deviation from a policy that has kept cross-strait peace for 50 years.

In a continuing stream of verbal attacks, in which China warned it would crush any attempts by Taiwan to seek independence, the weighted index of the Taiwan stock plunged around 13 percent during the week from 8,463.9 points to 7,366.23 in panic-selling.

Lee, in an interview with Germany's Deutsche Welle radio on July 10, said: "Since we conducted our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations."

Until then, Lee's Nationalist government had maintained that Taiwan is part of China, with both Taipei and Beijing claiming to be the sole legitimate government.

Taipei and Beijing split in 1949 at the end of a civil war when the Nationalists fled from the communist forces to Taiwan island. China has considered Taiwan as a renegade province ever since.

In a stern warning to Taipei, Tang Shubei, executive vice-president of China's quasi-official Association for Relations Across the Taiwan Strait (ARATS), said Lee's remarks would bring "disaster" to Taiwan.

Chinese Defense Minister Chi Haotian then weighed in, saying force would be used if necessary to protect China's sovereignty.

Professor Joseph Wu at National Chengchi University's Institute of International Relations said he did not expect to see the war of words deteriorate so far that it posed a threat of military conflict.

But "the possibility of firing missiles and holding war games as Beijing did in 1995-96 could not be ruled out" if the row escalated, he said.

China broke off negotiations with Taiwan in retaliation for a landmark visit by Lee to the United States in mid-1995 and followed the freeze with military exercises and missile tests off Taiwan.

Beijing has turned to Koo Chen-fu, Taiwan's top negotiator in handling ties with China, for clarification of Lee's claim.

The explanation from Koo, head of ARATS' Taiwan counterpart, the Straits Exchange Foundation (SEF), would affect whether ARATS chairman Wang Daohan went ahead with a planned historic visit to Taiwan this year.

"We're still waiting for the clarification of Mr. Koo and SEF and their attitude to Mr. Wang's visit to Taiwan," ARATS spokesman Xu Zhiqin said.

Wu said the difficulty for Taipei was that Koo "could not possibly swallow up what Lee had said and pretend nothing happened" in deference to the Chinese leaders.

Analysts believe there is little Taipei can do now to mend fences with Beijing, but they said at the very least Lee must not document his verbal pledge and press for an amendment to the constitution.

"Pushing too far could jeopardize regional security and invite an international backlash," DPP parliamentarian Parris Chang said.

The United States, also seeking clarification of Lee's remarks, was told Taiwan's policy towards China had not changed.

Lee told de facto US ambassador Darryl Johnson: "our mainland policy remains intact ... nor have our positions changed regarding bilateral exchanges and dialogue."

Despite Washington's recognition of the "one-China" policy and its reluctance to assure Taiwan's defense against Beijing, President Bill Clinton in March 1996 sent a massive armada to waters near Taiwan to defuse tension from China's war games.

A poll on Lee's "separate state" statement showed more than 56 percent support for the president against a disapproval rate of 22 percent.

By Reuters

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China Conducts Psychological Warfare Against Taiwan

TAIPEI, Jul 17, 1999 -- (Agence France Presse) Taiwan accused China Saturday of using the Hong Kong media to threaten it and denied reports of stepped-up military activity on the mainland.

Lin Chong-pin, vice chairman of the cabinet-level Mainland Affairs Council which makes China policy, said the Chinese authorities had used Hong Kong media to threaten Taiwan, aiming to "affect people psychologically to the fullest extent."

"What the mainland says and what it will do are not the same," he said. "If people here realize this they would be immune (from the psychological impact)."

Hong Kong newspaper reported Saturday that China was conducting military maneuvers in the Taiwan Strait and that airports in the south were on alert as political tensions mounted.

Wen Wei Po, a Hong Kong paper which usually reflects the views of the Chinese government, reported that more than 100 civilian vessels conducted exercises for 12 hours off the southern province of Fujian on Thursday.

The mass-market Apple Daily, quoting Japanese defense officials, said: "Ten Chinese military vessels, believed to be taking part in a military exercise, were seen near north Diaoyu Island from Thursday morning until night."

The newspaper said the maneuvers, 200 nautical miles northeast of Taiwan, "were not typical."

The Oriental Daily News, another mass-market paper, reported that Xiamen airport in Fujian had received notice that it should be prepared to change flight schedules to tie in with People's Liberation Army air force drills.

The Shantou air force command, which took part in intimidating 1996 war games in the Taiwan Strait, had also been conducting military exercises in recent days, the same paper said.

None of the newspaper reports could be independently verified.

Taiwan defense ministry spokesman Kung Fan-ting told AFP: "According to the ministry's understanding, there are no abnormal activities in the Chinese military, nor are there aircraft or ships passing the center of the Taiwan Strait.

"The Taiwanese military has not raised its combat readiness and it is normal for us to remain on alert."

Two Hong Kong newspapers reported Friday that President Jiang Zemin signed a military order on Tuesday telling forces in the southern cities of Nanjing and Guangzhou to be on alert for war preparations.

President Lee Teng-hui sparked the furore a week ago by telling German radio that relations between Taiwan, viewed by Beijing as a rebel province, and China were on a "state-to-state" basis.

The remarks were his most explicit yet on the island's status and provoked apoplexy in Beijing.

China maintains Taiwan is an inalienable part of Chinese territory which should eventually submit to Beijing's rule.

The People's Liberation Army has said it stands ready to act should Taiwan assert its independence.

China has considered Taiwan a renegade province since the end of a civil war in 1949 when Mao Zedong's communist forces drove Nationalist troops led by Chiang Kai-Shek to the island.

Beijing has threatened to take Taiwan by force if it ever tries to declare independence.

By Agence France Presse

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Hong Kong Papers Report Chinese Military Maneuvers In Taiwan Strait

HONG KONG, Jul 17, 1999 -- (Agence France Presse) China is conducting military maneuvers in the Taiwan Strait and airports in the south are also on alert as political tensions with Taipei mount, Hong Kong newspapers reported Saturday.

Wen Wei Po, a Hong Kong paper which usually reflects the views of the Chinese government, reported that more than 100 civilian vessels conducted exercises for 12 hours in waters near the southern province of Fujian on Thursday.

As the vessels headed towards the south China seaboard, many of the men on board sang the communist marching tune "We must liberate Taiwan," the paper said.

The mass-market Apple Daily, quoting Japanese defense officials, said "10 Chinese military vessels, believed to be taking part in a military exercise, were seen near north Diaoyu Island from Thursday morning until night."

The newspaper said the maneuvers, 200 nautical miles northeast of Taiwan, "were not typical."

But the Oriental Daily News, another mass-market paper, quoted Taiwan military officials as saying that Chinese military vessels "had not been conducting any unusual maneuvers" in the Taiwan Strait.

The paper, however, reported that Xiamen airport in the south had received notice that it should be prepared to change flight schedules to tie in with People's Liberation Army air force drills.

It said that Fuzhou airport, also in the south, was closed to civilian traffic for three hours on Thursday morning.

The Shantou air force command, which took part in intimidating 1996 wargames in the Taiwan Strait, had also been conducting military exercises in recent days, the Oriental Daily said.

None of the newspaper reports could be independently verified.

Two Hong Kong newspapers reported Friday that President Jiang Zemin signed a military order on Tuesday telling forces in the southern cities of Nanjing and Guangzhou to be on alert for war preparations.

The Sun daily said naval and air forces in the Taiwan Strait were also directed to go onto combat readiness, after controversial comments last weekend by Taiwan President Lee Teng-hui on the island's statehood.

He told German radio that relations between Taiwan, viewed by Beijing as a rebel province, and China were on "state-to-state" basis.

The remarks were his most explicit yet on the island's status, and provoked apoplexy in Beijing.

China maintains Taiwan is an inalienable part of Chinese territory which should eventually submit to Beijing's rule.

The People's Liberation Army has said it stands ready to act should Taiwan assert its independence.

China has considered Taiwan a renegade province since the end of a civil war in 1949 when Mao Zedong's communist forces drove the nationalist troops led by Chiang Kai-Shek to the island.

Beijing has threatened to take Taiwan by force if it ever tries to declare independence.

By Agence France Presse

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Taiwan's Lee A "Historical Sinner", Say China's State Media

BEIJING, Jul 17, 1999 -- (Agence France Presse) China's state media Saturday accused Taiwanese President Lee Teng-hui of being a "historical sinner" who for "attempting to split the motherland".

"Lee gradually tore off his camouflage and changed his policy towards the mainland from the "one China" principle," said a commentary issued by the Xinhua news agency and carried in Chinese newspapers.

"Lee was trying to take advantage of the current situation in the United States, where there has been a series of anti-China forces and he deliberately chose a German radio station to speak out, hinting that cross-straits relations were like the two Germanys."

However, cross-straits relations have never been like those of the two Germanys, the commentary said.

"His divisive remarks also exposed his attempt to impose his influence on Taiwan's political situation when he leaves office next year," it said, adding that it was "doomed to failure".

China has reacted furiously to comments by Lee in a German radio interview last week in which he redefined Beijing-Taipei relations as "state-to-state".

Beijing, which considers Taiwan a renegade province, saw the comments as a break from the long-standing "one China" policy.

There were a series of fresh condemnations of Lee in the Chinese press on Saturday.

China's "ownership of the sovereignty of Taiwan is not changed and will not be changed," Gu Xiulian, vice-chairwoman of the All-China Women's Federations said in a China Daily report.

She was speaking at a meeting of non-governmental organizations gathered to denounce Lee, the report said.

Lee should not take "political risks", hurt the feelings of all Chinese and bring disasters to all Taiwan compatriots, Gu added.

Taiwanese youth should "see through the plot of the separatist forces" and fight against Taiwan independence, urged Bayin Chaolu, president of the All-China Youth Federation.

Chinese workers "resolutely support the solemn stance of the Chinese government" and will not allow Taiwan authorities to separate Taiwan from China, said Zhang Junjiu, vice president of the All-China Federation of Trade Unions.

In the eastern Chinese province of Fujian, which lies across from Taiwan, local officials and academics also condemned Lee, Xinhua news agency reported.

Fujian will continue to be "an essential center for China's peaceful reunification", abiding by the basic "One Country, Two Systems" principle, said participants at a seminar.

The seminar was organized by Fujian's Taiwan Affairs Office and the Taiwan Studies Society.

The Xinhua report did not elaborate on the remarks.

China has ordered a low-level military alert in its southern regions facing the Taiwan Straits, sources said Friday.

A Fujian provincial government spokeswoman also told AFP by telephone Friday that Fujian authorities had conducted drills with civilian vessels on China's side of the Taiwan Strait.

Fujian television reported that drills involving 110 civilian boats had taken place in Shishi city.

Two Hong Kong newspapers also reported Friday that President Jiang Zemin signed a military order on Tuesday telling forces in the southern cities of Nanjing and Guangzhou to be on alert for war preparations.

By Agence France Presse

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China Tirade On Taiwan Carries Olive Branch

BEIJING, Jul 16, 1999 -- (Reuters) China let a glimmer of flexibility shine through its mounting threats to Taiwan on Friday, with a Beijing official calling on Taipei to clarify its redefinition of relations as "state-to-state" ties.

Since Monday, when Taiwan formally abandoned the "One China" policy under which both agreed they were both part of the same country and sought reconciliation, Beijing has been in a rage.

It repeated a threat to invade if Taiwan declared independence and on Thursday, with what appeared to be carefully calculated timing, announced it could make the neutron bomb, which kills people but leaves property relatively intact.

But on Friday, there were no vitriolic commentaries in state newspapers and the China Daily seemed to offer a way out of the latest row across the Taiwan Strait.

It quoted a senior adviser to the Beijing body that deals with Taiwan affairs as saying a pivotal October visit to Taipei by the group's head would be "impossible" unless Taiwan explained its contentious policy shift.

Zhang Kehui, adviser to the Association for Relations Across the Taiwan Straits, called for an explanation from the group's Taiwan counterpart to pave the way for a visit to the island by ARATS Chairman Wang Daohan.

"We think that the time will not be ripe for Wang to visit Taiwan until Straits Exchange Foundation Chairman Koo Chen-foo clarifies the definition of cross-straits talks as 'bilateral talks between two states'," Zhang was quoted as saying.

The remarks by Zhang, a prominent defector from Taiwan, were made at a seminar called by the government to condemn Taipei's policy at which another policymaker vilified President Lee Teng-hui as Taiwan's "biggest troublemaker"

But his statement was Beijing's first public hint that it might take up Taipei's offer to explain a policy change that has vexed complex triangular ties between Taiwan, China and the United States.

Wang, scheduled to reciprocate Koo's visit to the mainland last year, said on Monday as the storm broke that Taipei's scrapping of its "One China" policy had removed the foundation of cross-strait ties and cast his trip in doubt.

Taiwan said on Tuesday it would make every effort to explain its posture to Beijing, but the Communist authorities had shown no signs of a willingness to listen until Zhang's remarks were published on Friday.

Taipei tripped the latest cross-straits crisis by declaring it was abandoning the "One China" policy -- the foundation of Taipei-Beijing relations for decades.

It said the idea of one, indivisible China that included Taiwan -- a formula that has prevented war -- had to be scrapped as Beijing was using it to undermine the legitimacy of Taiwan.

China responded with predictable rage and days of vitriolic attacks on Lee Teng-hui, who first publicized the policy shift in an interview with German media last weekend.

On Thursday, the Liberation Army Daily military newspaper renewed China's threat to retake the Nationalist-ruled island by force if it declared independence and called Lee "a criminal of the nation who will leave a stink for a thousand years".

Beijing raised the threat threshold with a nearly simultaneous announcement that it had neutron bomb technology. The revelation was aimed at rebutting U.S. allegations of Chinese nuclear spying, but few saw the timing as accidental.

But rather than reverse itself in the face of Beijing's mounting threats, Taiwan ordered state agencies on Thursday to sell its move to China and the world.

The United States has urged both sides to do nothing to jeopardize talks between Beijing and Taipei envoys and told China it would not tolerate a violent solution to the Taiwan issue.

"We would ... consider any effort to determine the future of Taiwan by other than peaceful means as a threat to the peace and security of the Western Pacific area and of grave concern to the United States," said State Department spokesman James Rubin.

Taiwan has been estranged from the mainland since the Nationalists lost a civil war to the Communists and fled to the island in 1949. Beijing has since pressed other countries not to extend diplomatic ties to Taiwan's Republic of China.

Taiwan officially agrees on reunification, but says Beijing must embrace democracy first.

By Reuters

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U.S. Warns China Not To Use Violence Against Taiwan

WASHINGTON, Jul 16, 1999 -- (Reuters) The United States, drawing its own line on the latest East Asia crisis, warned China on Thursday it would not tolerate a violent solution to the future of Taiwan.

"We would...consider any effort to determine the future of Taiwan by other than peaceful means as a threat to the peace and security of the Western Pacific area and of grave concern to the United States," State Department spokesman James Rubin said. "That's about as strong a statement as one can make."

Rubin told a news briefing the United States believed the problem should be resolved through peaceful means and "strongly opposed" any other course of action.

The Taiwan Relations Act, which governs ties between Washington and Taipei, commits the United States to "appropriate action" in response to threats to Taiwan.

In 1996, after China threatened Taiwan, the United States gave an indication of how that commitment might be interpreted when it sent two aircraft carrier groups to the region. The incident very nearly resulted in military action.

Rubin spoke after China dusted off its threat to retake Taiwan by force if the island moved toward independence. China also raised the ante by announcing it had developed the technology to make neutron bombs.

The State Department and private analysts said the fact that Beijing had this capability has been known for some time.

While some experts saw Beijing's statements about the neutron bomb in the midst of the current controversy as a pointed message to Taipei, Rubin dismissed a connection.

Rather, he said he took Beijing's comments as another rebuttal to the Cox report, a U.S. congressional study issued in May that alleged China stole U.S. nuclear secrets.

Representative Christopher Cox of California, the main author of the controversial report, said China's reaction appeared to have the dual aim of rebuttal and menacing Taiwan.

"I think it's both," he told Reuters. "They are confirming for the first time that they have a neutron weapon. This is the same ham-fisted belligerence that they exhibited during Taiwan's democratic elections during 1996."

Spurgeon Keeny, head of the non-profit Arms Control Association, said reports from Beijing took China's neutron bomb comments out of context and that remarks on the neutron bomb were an insignificant part of a 43-page Chinese report denying the Cox Report charges of espionage.

Cox said China's admission that it mastered the neutron bomb technology in the 1970s and 1980s squared with his own findings, but asserted that Beijing had obtained the information by spying on the United States.

"The 1970s is when they stole it and successfully tested it. Then they stole additional information more recently," he said.

Taiwan sparked the latest cross-straits crisis by declaring earlier this week it was abandoning the "one China" policy -- the foundation of Taipei-Beijing relations for decades.

Although the United States urged both sides to halt the ferment and restore a dialogue, Rubin made clear Washington felt it necessary to respond directly to China's volatile rhetoric over Taiwan.

However he also said Washington has not detected any change in China's military posture that would indicate an escalation of the crisis.

The United States is concerned about the controversy but believes it is less serious than some in the past, he said.

U.S. military ships have not been told to move into the Taiwan Straits to deal with any tense situations as a result of Taipei's declaration, Defense Secretary William Cohen told reporters on his aircraft en route from a trip to Europe.

Taipei has many supporters in the U.S. Congress and the administration has long been under pressure to be more receptive to ideas about Taiwan independence.

Washington's first reaction this week was to try to contain the controversy by reaffirming it recognized one China ruled from Beijing despite Taipei's decision to reject that policy.

This raised the ire of North Carolina Republican Sen. Jesse Helms, chairman of the Senate Foreign Relations Committee, who is among Taiwan's strongest supporters in Congress. Helms backed Taiwan President Lee Teng-hui for "stating the obvious" and said "China is a divided nation made up of two separate and sovereign states," as East Germany and West Germany once were.

Helms expressed dismay that the Clinton administration, in affirming its one-China policy, sided with China's mainland Communists instead of democrats on Taiwan. He pressed for a reiteration "of our legal defense obligations to Taiwan."

Beijing, which considers Taiwan a rebel province blocking its drive to reunify China, has threatened to invade the island if independence is declared. Government experts have predicted the United States likely would be drawn into any war between China and Taiwan.

By Reuters

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Chinese President Calls For Greater Cooperation With Mongolia

ULAN BATUR, Jul 16, 1999 -- (Agence France Presse) Visiting Chinese President Jiang Zemin has called for increased Sino-Mongolian economic cooperation and signed three "cooperative documents," officials said Friday.

At a signing ceremony Thursday, Jiang and Mongolian President Natsagiin Bagabandi signed a 30-million-yuan ($3.6 million) agreement on economic and technological cooperation, to be defined at a later date, a Mongolian official told AFP.

Another document on the joint prevention of forest and grassland fires in border areas was signed and letters were exchanged on the utility of a financial grant awarded to the Mongolian government by China in 1998, he added.

On Friday Jiang is due to meet parliamentary Speaker R. Gonchigdorj and Prime Minister Janlavin Narantsatsralt, with whom he will sign an additional four documents, as he enters the second day of a state visit,

He will also visit herding communities in Ulan Bator's outlying regions and attend Naadam, or Mongolian New Year, festivities.

Jiang said China was willing to encourage investment in Mongolia and urged Mongolia to improve the investment environment and guarantee the legal rights of Chinese investors, China's Xinhua news agency reported.

"Mongolia has abundant resources and China has the technology and equipment suitable to Mongolian needs," Jiang was quoted as saying.

He added that "high attention" should be given to the Beijing-Ulan Bator-Moscow railway, which links Asia and Europe, "in a bid to promote the development of each country's economy and foreign trade."

Jiang and Bagabandi were expected to discuss plans for an "energy corridor," including a billion-dollar gas pipeline between north China and eastern Siberia expected to bring badly needed investment to Mongolia.

Another proposed project would see China and Russia linked by a high-power transmission line through Mongolia.

China has stepped in to fill the void left by the collapse of the Soviet Union -- aid from which once made up one-third of Mongolia's gross domestic product -- and is now Mongolia's second largest trading partner and leading investor.

Jiang's three-day visit, which follows Bagabandi's state visit to China last December, is set to "review the past and face up the future in the bid to push forward the good-neighborhood, friendship and cooperation well into the 21st century," he told Xinhua.

By Agence France Presse

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US Senator Helms Backs Taiwan's Lee, Says Taipei Is "Sovereign"

WASHINGTON, Jul 16, 1999 -- (Agence France Presse) Republican Senator Jesse Helms, the chairman of the Senate Foreign Relations Committee, said Thursday that Taiwan is one of "two separate and sovereign 'states'" composing China.

Helms said that he fully supported Taiwan President Lee Teng-hui's statements this week that the self-governing island is a sovereign state, enraging Beijing, which warned it would fight any independence bid.

"Yes, Taiwan is a part of China -- but it is not a part of the 'People's Republic of China,'" Helms said in a statement.

Washington recognizes Beijing alone as China's legitimate government, having broken off official ties with Taipei in January 1979 in order to establish them with Beijing.

Taiwan split from China in 1949 after nationalist forces holed up on the island following their civil war defeat by the communists.

"President Lee simply stated the obvious: China is a divided nation, made up of two separate and sovereign 'states.' Just as East and West Germany were both part of Germany, they were nonetheless separate 'states.'

"Just as the two German states eventually reunited under democracy, so too do we hope that the two Chinese states can one day reunite -- under democracy," said Helms.

By Agence France Presse

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HK Paper Says China May Occupy Outer Taiwan Islands

HONG KONG, Jul 16, 1999 -- (Reuters) The independent Hong Kong Economic Times newspaper said on Friday China might occupy one or two of Taiwan's outer islands if Taipei showed signs of pursuing independence.

Quoting an unnamed source in Beijing, the Chinese-language daily said Chinese Vice-Premier Qian Qichen was likely to issue a formal warning before the army launched any "brief military contact", which could include seizing one or two islands.

Another Hong Kong paper, the Sing Tao Daily, said mainland Chinese military movements had been detected in coastal areas facing Taiwan, saying some civilian aviation had been disrupted on Thursday to allow military flights to take place.

Taiwan defense ministry spokesman Kung Fan-ting, speaking to Reuters at a forward defense placement in the Taiwan Strait, cast serious doubt on the reports.

"I have not heard anything about this," Kung said.

Military sources said any threatening military movements on the Chinese mainland would have been quickly detected by Taiwan intelligence, and that they had not.

China and Taiwan have been involved in a war of words after Taiwan President Lee Teng-hui abandoned this week its long-standing "one China" policy and described relations between China and Taiwan as "state-to-state".

The Economic Times, quoting its source, said: "The mainland has changed its policy with regards to the issue and will not use threats like 'missile drills' but may use stronger measures like 'brief military contact'."

The newspaper, which gave no indication who its source was, said such contact could include occupying one or two Taiwan islands to change Taipei's stance.

Beijing's plan to push Taipei back to the "one China" policy, which has averted war between the rivals for decades, would be more severe than previous strategies, the source was quoted as saying.

The United States warned China on Thursday that it would not tolerate a violent solution to the future of Taiwan.

"We would... consider any effort to determine the future of Taiwan by other than peaceful means as a threat to the peace and security of the Western Pacific area and of grave concern to the United States," State Department spokesman James Rubin said.

China staged months of menacing military exercises after Lee went on a landmark trip to the United States in 1995 to try to bring Taiwan out of diplomatic isolation. The situation became so tense the United States sent two naval battlegroups to the area.

Chinese Defense Minister Chi Haotian warned Taiwan this week that the Chinese army was "ready at any time to safeguard the territorial integrity of China and smash any attempt to separate the country."

By Reuters

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HK Assembly Backs Changes In Abode Laws

HONG KONG, Jul 16, 1999 -- (Reuters) Hong Kong's legislature on Friday passed a resolution detailing who qualifies for the right of abode in the territory in line with Beijing's controversial reinterpretation of its constitution.

The Hong Kong government said the amendment would plug loopholes in the immigration laws.

"We are most concerned about the rising percentage of illegal immigrants. The increase in the number of overstayers also poses difficulties to future repatriation," security secretary Regina Ip told the legislature.

Beijing last month reinterpreted Hong Kong's constitution, effectively overturning an immigration ruling in January by the territory's highest court.

The court ruling gave residency rights to some 1.67 million children of Hong Kong residents, including those born before their parents came to the territory.

It also sparked Hong Kong's first constitutional row with China since the territory reverted to Chinese control in 1997.

Hundreds of mainland Chinese in Hong Kong on social visits at the time immediately requested residency and refused to go back, from where they could have applied for Hong Kong to issue permits verifying their status.

Hong Kong, fearing a mass influx would cripple its economic recovery from the Asian financial crisis, asked Beijing to intervene.

Beijing's reinterpretation sharply cut the number of people eligible to emigrate to Britain's former colony. It also prevents mainland Chinese on social visits from overstaying and claiming the right to live in Hong Kong without having properly applied in China.

By Reuters

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China Trumpets Human Rights Progress In Tibet

BEIJING, Jul 16, 1999 -- (Reuters) China, seeking to dismiss international criticism of its human rights record in Tibet, said on Friday there had been "earth-shaking" progress in the social, economic, civil and political rights in the Himalayan region.

But the lengthy report by the government-backed China Society for Human Rights Studies acknowledged that "many aspects of human rights conditions in Tibet have yet to be improved".

The report, carried by the official Xinhua news agency, also admitted religious freedom was "disrupted" in Tibet during the chaotic 1966-76 Cultural Revolution when fanatic Red Guards stormed temples and smashed Buddhist statutes.

It said the atheist Communist Party had adopted measures to safeguard religious freedom in the region after the Cultural Revolution ended.

Chinese authorities had poured more than 300 million yuan ($36 million) and almost 3,000 kg tons of gold and silver into repairing and maintaining Buddhist temples in Tibet, the report said.

The Communists freed millions of slaves, introduced land reform and brought about "earth-shaking improvements in human rights there", the report said.

"The old Tibet was a society practicing a feudal serfdom system combining political and religious power, which was darker than the European Middle Ages," the report said.

Many emancipated slaves were now deputies in the local parliament, it said.

The report did not address criticism by international human rights groups that authorities had imprisoned and defrocked hundreds of monks and nuns and closed down temples.

The groups accuse Chinese authorities of beating up jailed monks and nuns loyal to the Dalai Lama, Tibet's god-king who fled into exile in India in 1959 after an abortive uprising against Communist rule.

The Dalai Lama is reviled by the Communists as a "splittist" seeking independence for Tibet. The 1989 Nobel Peace Prize winner says he is seeking autonomy for his homeland.

The Chinese report said the authorities injected about 1.2 billion yuan in subsidies into Tibet each year.

The authorities had reduced illiteracy, wiped out many epidemics and raised the standard of living of Tibetans, it said.

Tibet's economy has soared. Gross domestic product in 1998 increased 47-fold from that in 1959, while industrial output was up 31 times, it added.

The Dalai Lama and other critics say China is systematically destroying Tibetan culture and flooding the region with ethnic Chinese settlers.

The restive region has been rocked periodically by riots and bombings.

By Reuters

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China Calls Lee Teng-Hui "Manipulator"

BEIJING, Jul 16, 1999 -- (Reuters) China's official media fired another salvo at Taiwan's President on Friday for discarding the "One China" policy, calling him a "manipulator" exploiting frayed China-U.S. ties for personal ends.

Lee "has put himself in the defendant's seat as a person condemned by history for vainly attempting to separate the motherland", the official Xinhua news agency said.

It said "an independent Taiwan is a dead end", adding that "Lee Teng-hui's splittist route is bound to end in failure".

Taipei triggered the latest cross-straits crisis by declaring on Monday it was abandoning the "One China" policy -- the foundation of Taipei-Beijing relations for decades.

It said the idea of one, indivisible China that included Taiwan -- a formula that has prevented war -- had to be scrapped as Beijing was using it to undermine the legitimacy of Taiwan.

China responded with predictable rage and days of vitriolic attacks on Lee Teng-hui, who first publicized the policy shift in an interview with German media last weekend.

Lee was "manipulating power for personal ends and lacked sincerity", the commentary said, adding that he was exploiting frayed ties with the United States to "continue to influence Taiwan politics after he steps down".

The next presidential elections in Taiwan are in March 2000.

China-U.S. ties have been damaged by accusations that Beijing stole American nuclear secrets over of 20 years and NATO's bombing of China's embassy in Belgrade in May.

NATO said the bombing was a mistake, but China maintains it was deliberate.

The commentary said Lee, "shouts out for democracy, but ignores Taiwan's desires for stability, peace and hopes for improved relations with China not worsened ties".

It said "the developing situation of the two shores' relationship contradicts Lee's real intention to destroy the motherland".

By Reuters

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Tense Calm Over Taiwan Amid Escalating Cross-Strait Tensions

TAIPEI, Jul 16, 1999 -- (Agence France Presse) A tense calm hung over Taiwan Friday amid escalating cross-strait tensions as rival China ordered a low-level military alert along its southeastern coast.

Despite the war of words with Beijing, authorities here were more jittery after former Taiwan governor James Soong announced he was throwing his hat into the ring for the presidential elections in an open challenge to the ruling Kuomintang (KMT) to which he belongs.

KMT leaders feared the popular former party heavyweight would split the party and threaten its 50-year rule over the island.

Taiwan defense ministry spokesman Kung Fan-ting ensured the public that no major movements of mainland forces had been detected, but share prices crashed 506.46 points, or 6.4 percent, in the worst drop since January 1996, in panic selling.

"There are no signs showing unusual movement of communist Chinese forces... The ministry is closely monitoring the situation on the mainland," Kung told AFP.

Kung was in the frontline Kinmen Island, only some two kilometers (just over a mile) off China's southeastern coast, accompanying visiting local reporters.

"All operations on the frontline islets are normal," Kung said, adding surveillance was enforced there but alert level remained unchanged.

Premier Vincent Siew is to convene an urgent cabinet meeting Monday to discuss ways to calm investors panicked by Beijing's military threat protesting President Lee Teng-hui's statehood claim over the weekend.

The vulnerable bourse has tumbled 1,138.69 points, or 13.3 percent, since Monday.

Lee said Saturday that cross-strait ties should be redefined as "state-to-state" in an apparent shift from the "one-China" policy accepted by both sides which has maintained peace between the two rivals since they were split in 1949 at the end of a bitter civil war.

China, which views Lee's remarks a declaration of independence, has launched series of verbal attacks on the Taiwan leader and renewed military threats against the nationalist island.

To show its fury, sources said Beijing had heightened combat alert on the southern Nanjing district to level two, which is just one step up from normal readiness (level three), with two more levels to go before emergency alert.

Two Hong Kong newspapers reported Friday that President Jiang Zemin signed a military order on Tuesday telling forces in the southern cities of Nanjing and Guangzhou to be on alert for war preparations.

The Sun daily in Hong Kong said naval and air forces in the Taiwan Strait were also directed to go onto combat readiness.

The Chinese-language daily Hong Kong Economic Times cited unnamed sources in Beijing as saying as China might occupy one or two of Taiwan's outer islands to change what was seen as its stance in pursuing independence.

Soong, a pro-reunification politician, Thursday criticized Lee for re-igniting cross-strait tensions.

"The country's leader must not sacrifice people's well-being and national interests in dealing with the mainland," he said.

"Any change in the status quo must be agreed to by the 22 million residents in Taiwan," he said.

In the March presidential polls, Soong will be competing with pro-independence Chen Shui-bian from the main opposition Democratic Progressive Party.

Vice President Lien Chan, Lee's protege, has yet to be formally nominated by the KMT.

China has considered Taiwan a renegade province since the end of a civil war in 1949 when Mao Zedong's communist forces drove the nationalist troops led by Chiang Kai-Shek to the island.

Beijing has threatened to take Taiwan by force if it ever tries to declare independence.

To protest Lee's "private" visit to the United States in mid-1995, China rattled Taiwan by holding several military exercises and firing ballistic missiles into waters near the island.

The drills ended only after Washington sent two carrier battle ships into the region in early 1996 in a show of force.

By Agence France Presse

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Taiwan's Soong Snubs KMT To Seek Presidency

TAIPEI, Jul 16, 1999 -- (Reuters) Taiwan's James Soong, a popular senior insider in the ruling Nationalist Party, challenged the party on Friday by launching an independent presidential bid, a move that throws open the March 2000 election.

"I've decided to run for president of the Republic of China next year as an independent candidate," Soong said after a meeting with Secretary-general John Chang of the ruling party, also known as the KMT. "Taiwan needs a courageous but not reckless leader."

Soong declined to say whether he would leave the party he had served as a loyal deputy for decades, but said he would "always be together with the people who support the KMT".

"I would never do anything which is against the party's basic principles," said Soong.

Analysts said Soong, one of Taiwan's most visible and popular politicians, risked expulsion from the Nationalist Party. Recent public opinion polls have consistently placed him at the front of the pack of presumed presidential hopefuls, far ahead of President Lee Teng-hui's carefully groomed choice, Vice President Lien Chan, who has been scoring in third place.

The opposition Democratic Progressive Party's candidate, former Taipei mayor Chen Shui-bian, has ranked second in the polls.

By Reuters

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Taiwan On High Alert After China Warns It Would Use Force Against Island

TAIPEI, Jul 15, 1999 -- (Agence France Presse) Taiwan is on high alert and closely monitoring the movements of the People's Liberation Army, the defense ministry said Thursday after Beijing warned it would crush any attempts to split the mainland.

"It is our practice to always stand on high alert," an official from the military spokesman's office said.

"We are also closely watching deployment of the Chinese Communist forces," he said.

Beijing threatened Wednesday to use force against the island to protect national sovereignty after President Lee Teng-hui declared that Taiwan was a separate, sovereign state.

"The Chinese People's Liberation Army is ready at any time to safeguard the territorial integrity of China and smash any attempts to separate the country," Defense Minister Chi Haotian said.

"Taiwan is a province of China, and China's sovereignty and territorial integrity allow no separation," Chi said, according to a Xinhua report.

Lee infuriated Beijing by telling Germany's Deutsche Welle radio station Saturday that cross-strait ties should be redefined as "nation-to-nation, or at least as special state-to-state relations."

He restated his sovereignty claim Tuesday telling Honduran Foreign Minister Roberto Flores Bermudez that: "The Republic of China (Taiwan's official name) has always been a sovereign state, not a local government."

Beijing had been blinded to historical and legal realities in viewing Taiwan as a "renegade province," he said.

Lee's remarks were viewed by Beijing as a shift from the "one-China" policy previously accepted by Taiwan, which it has considered a breakaway province awaiting reunification.

China has considered the island a renegade province since the two sides split in 1949 at the end of a civil war.

Vice Defense Minister Sun Tao-yu said Wednesday Taiwan had detected no signs of major military drills or "abnormal movements" on the mainland.

Su added Taiwan was monitoring closely deployment of Chinese military jets along the mainland southeastern coast.

After Lee's visit to the United States in 1995, Beijing rattled the region by holding several war games and lobbing ballistic missiles into waters near Taiwan.

The exercises only ended after Washington sent two battle carriers into the region in a show of force.

By Agence France Presse

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China Warns Taiwan That Its Army Ready To Enforce Unity

BEIJING, Jul 15, 1999 -- (Agence France Presse) China warned Taiwan Wednesday the People's Liberation Army (PLA) was ready to crush any attempts to split the country after its president declared the island a separate nation.

In a major escalation of angry rhetoric from Beijing over President Lee Teng-hui's remarks, Defense Minister Chi Haotian said China's sovereignty would be protected, according to the Xinhua state news agency.

"The Chinese People's Liberation Army is ready at any time to safeguard the territorial integrity of China and smash any attempts to separate the country," he said.

"Taiwan is a province of China, and China's sovereignty and territorial integrity allow no separation," Chi said, according to the report.

Any moves to split China would not work, he added.

Lee's statement that relations between Taiwan and the mainland were on a "state-to-state" basis infuriated China, which maintains Taiwan is an inalienable part of Chinese territory which should eventually submit to Beijing's rule.

Chi made the remarks at a meeting with a delegation from North Korea's armed forces, led by Vice Minister Ryo Chun Sok.

He reportedly told the Stalinist state he hoped the two countries could work together "to continue their traditional friendship for generations to come".

By Agence France Presse

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US Views Taiwan's China Policy As Unchanged

WASHINGTON, Jul 15, 1999 -- (Agence France Presse) Taiwan's China policy is unchanged despite President Lee Teng-hui's apparent weakening of a stance that has kept peace in the Taiwan Strait for 50 years, the State Department said Wednesday.

Lee, who enraged Beijing by implying that the self-governing island was a sovereign state, told the top US representative there Wednesday that Taipei's policy toward Beijing was unchanged, spokesman James Rubin said.

"The official Taiwanese version of the meeting indicated there has been no change in policy. Their policy on this subject is unchanged. That's significant. ... That is part of what we heard," Rubin said.

"I am not going to report all that we heard, but the fact that their official version of the events indicated that their policy on the subject remains unchanged, certainly we hope will yield the prospect for a continuation of the cross-strait dialogue," he added.

Lee met Wednesday in Taipei with Darryl Johnson, outgoing head of the unofficial American Institute in Taiwan, in which Johnson sought clarification of Lee's comments last Saturday with Deutsche Welle radio.

"Since we conducted our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations," Lee told the German radio service.

But he reportedly assured Johnson that "our mainland policy remains intact ... nor have our positions changed regarding bilateral exchanges and dialogue."

China reacted furiously to Lee. Tang Shubei, executive vice-president of its quasi-official Association for Relations Across the Taiwan Strait, said Monday such remarks would bring "disaster" to Taiwan.

Chinese foreign ministry spokeswoman Zhang Qiyue told a news conference in Beijing that "Lee Teng-hui has taken a very dangerous step."

Such exchanges can only produce anxiety among US officials, who -- in part to discourage Taiwanese adventurism -- have never stated explicitly whether they would intervene to defend Taiwan from a Chinese attack.

In March 1996, however, with US-China relations at near-crisis lows, President Bill Clinton sent a massive armada to the Taiwan Strait in a bid to deter Beijing's saber-rattling war games near the island.

Those military exercises followed what China regarded as Lee's provocative efforts to raise Taiwan's international profile, notably with a trip to the United States in early 1995.

Though US-China ties rebounded in 1997-98, they have suffered new setbacks this year as a result of NATO's May 7 bombing of the Chinese embassy in Belgrade and allegations of Chinese spying at US nuclear weapons labs.

By Agence France Presse

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China Says It Mastered Neutron Bomb Technology Without Need To Spy

BEIJING, Jul 15, 1999 -- (Agence France Presse) China announced publicly for the first time Thursday that it had mastered the technology to build a neutron bomb, publishing detailed notes on its nuclear weapons program aimed at refuting US allegations of espionage.

"China had no other choice but to continue to carry out research and development of nuclear weapons technology and improve its nuclear weapons systems, mastering in succession the neutron bomb design technology and the nuclear weapon miniaturization technology," Minister of Information Office of the State Zhao Qizheng told a news conference.

Zhao's news conference was aimed at shooting down allegations in the United States that it stole US nuclear weapons and neutron bomb design secrets over the past two decades.

The spying allegations sparked a political row in Washington after the publication of the Cox report -- the culmination of an 11-month probe by a special congressional investigative panel led by Republican Representative Christopher Cox.

"Since China has already possessed atom bomb and H-bomb technologies, it is quite logical and natural for it to master the neutron bomb technology through its own efforts over a reasonable short period of time," Zhao said.

"It was revealed later from US declassified documents that Chinese and American scientists almost simultaneously advanced a similar concept in their respective research," Zhao said, referring to a technique known as laser-based nuclear fusion necessary to produce a neutron.

A neutron bomb is an enhanced radiation bomb designed to maximize neutron radiation. It is lethal to all forms of life, but having a reduced blast, leaves buildings and infrastructure relatively undamaged.

China has slammed the US allegations as "racial prejudice," saying it was capable of developing its own weapons program which it has been doing since the 1950s, but has not given details until now.

The State Council issued a 25,000 word document in answer to the Cox report, including technical breakdowns and chronologies of its major weapons test compared with those in the United States.

Zhao said Cox's panel would not have made such a "silly" mistake if they had seriously consulted experts.

Although the announcement of Beijing's potential new military muscle came as a row brewed with rival Taiwan over comments by its President Lee Teng-hui about statehood, analysts in Beijing said the timing of the announcement was unlikely to be related.

The State Council news conference had been announced the day before Lee told a German radio station that Taiwan wished to deal with Beijing -- which regards the island as a renegade province -- on a "state-to-state" basis.

"It probably has more to do with the US than with the Taiwan issue," a Western diplomat in Beijing told AFP.

"Since the bombing of the Chinese embassy in Belgrade, China has given more stress to its defense efforts."

"China is trying to show that it can develop new technology, like the US," the analyst said.

China's report said much of the information alleged by Cox to have been stolen from US weapons laboratories was openly available on the Internet, citing 100 articles in the public domain on the principle and structure of the neutron bomb.

It said US thermonuclear weapons codes allegedly stolen by China were in wide circulation in the nuclear power industry and in member countries of the International Atomic Energy Agency.

The report said a Chinese scientist Wang Ganchang had begun researching one-beam laser technology in 1973 and produced neutrons in 1986.

The exchanges with US scientists mentioned in the Cox report were all carried out under supervision by both governments and limited to arms proliferation control and environmental issues.

China had also carried out its own satellite launching program, the report said, adding that satellite launching technology purchased from the United States was not accurate enough to be converted for missile use.

By Agence France Presse

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China Declines To Confirm Tang-Albright Meeting In Singapore

BEIJING, Jul 15, 1999 -- (Agence France Presse) China Thursday declined to confirm or deny reports that US Secretary of State Madeleine Albright will meet Chinese Foreign Minister Tang Jiaxuan at the ASEAN Regional Forum in Singapore later this month.

"Regarding...the kind of meetings that the Foreign Minister is going to have, China is now having consultations with the countries concerned," Foreign Ministry spokeswoman Zhang Qiyue told the weekly news conference.

Foreign ministers from Southeast Asian nations and other countries are slated to attend the meetings from July 25 to 26.

Albright will head a delegation to the annual ASEAN Regional Forum from July 25-26 and the ASEAN Post-Ministerial Conference from July 27-28.

Japan's Asahi Shimbun said Thursday that Albright and Tang would hold talks on the sidelines of the meetings.

"China and the United States have the custom of holding a foreign ministers' meeting on the sidelines of ASEAN meetings," the newspaper quoted an unidentified Chinese foreign ministry official as saying in Beijing. "It is better to keep contact.'

US-China relations have been frosty since US-led NATO bombing destroyed the Chinese embassy in Belgrade in early May, killing three Chinese journalists and injuring about 20 other Chinese nationals.

The incident sparked widespread protests at US diplomatic missions across China.

Beijing suspended talks with the US on human rights, military cooperation, and negotiations for China's entry to the World Trade Organization.

The Chinese rejected as "unconvincing" US explanations the strikes were a mistake caused by outdated maps and other errors.

Two senior US State Department officials were to begin talks in Beijing on Thursday about compensating China for the deaths and damage caused by the bombing.

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Analysts: China's Saber-Rattling On Taiwan Unlikely To Lead To War

HONG KONG, Jul 15, 1999 -- (Agence France Presse) China is following a well-worn strategy by threatening to use military might to quash pro-independence sentiment in Taiwan, but analysts say the current war of words is unlikely to spiral into armed confrontation.

China has reacted with fury to comments by Taiwan President Lee Teng-hui saying cross-strait ties should be redefined as "nation to nation" or "state to state".

Chinese Defense Minister Chi Haotian this week threatened to unleash the full power of the People's Liberation Army to "smash any attempts to separate the country."

But Jean-Pierre Cabestan, director at the Center for Studies of Contemporary China, said he believed China would be very reluctant to launch any kind of military attack on Taiwan in the near future.

"My feeling is that the usual military threat is the only means to pressure Taiwan from heading towards separatism," Cabestan told AFP.

"In the foreseeable future, China will not make such move because of its own problems," he said, mentioning the ongoing process of economic reforms which have left millions out of work and strained ties with Washington.

Cabestan said that while Beijing's announcement on Thursday that it had mastered neutron bomb technology was not necessarily aimed at Taiwan, it "fits exactly into part of its strategy" of intimidating the island into dampening calls for independence.

China has considered Taiwan a renegade province awaiting unification since the two sides split in 1949 at the end of a civil war, and Lee's remarks over the weekend were seen as a shift away from the "One China" policy previously accepted by Taiwan.

After Lee's visit to the United States in 1995, Beijing ratcheted up tension in the region by holding military exercises and lobbing ballistic missiles into the waters off Taiwan.

The exercises only ended after Washington sent two battle carriers into the region in a show of force.

Kam Cheung, publisher of monthly China-watch magazine Open, said that "Beijing will not make any stupid act as it did in 1995.

"If Beijing does it this time, it will again fall to Lee's trap," he said, adding that the tense military stand-off had greatly enhanced Lee's standing in Taiwan.

"Lee was making a stance for a planned negotiation to open ... It is a fact that there are two sovereign states, but it does not mean Taiwan can not be reunified with the mainland eventually," said Kam.

Kam said Beijing would not easily pass up the opportunity to reopen talks with Taiwan.

Taiwan has until now formally accepted that it is part of China but has always said it will only go ahead with reunification when China embraces democracy.

Other analysts said Beijing would not take any military action unless there was concrete evidence that Lee was moving towards independence.

Li Hung, political commentator at the Great China Times Reserarch Institute, said "the military threat could be real," adding that he believed "China has a set plan to occupy any of the islands around Taiwan."

Lau Siu-Kai, associate director at Hong Kong Institute of Asia Pacific Studies, said military action would be a last resort.

"It depends whether Lee Teng-hui makes a visible move to detach Taiwan from the mainland," he said, adding that the 1996 Chinese war games had backfired.

He said the exercises not only boosted Lee's standing but also alarmed Japan which has since forged a new military alliance with the United States -- much to the consternation of Beijing.

In May, Japan's parliament passed the new law enshrining Japan-US defense guidelines that allow Japanese forces to give stronger rearguard support to US forces in regional crises that directly threaten Japan's security.

"At the end of the day, it depends if Taiwan is getting support from the US government and other Western countries to declare independence," Lau said.

He noted that Washington and Tokyo had immediately reacted to Lee's comments over the weekend by pledging commitment to the "one China" policy.

"It is a veiled message that Lee is not getting support for his independence claims from both countries," he said.

By Agence France Presse

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Report: US, Chinese Foreign Ministers To Meet In Singapore

TOKYO, Jul 15, 1999 -- (Agence France Presse) US Secretary of State Madeleine Albright and Chinese Foreign Minister Tang Jiaxuan plan to hold talks in late July during a Southeast Asian meeting in Singapore, a report said Thursday.

"Chinese and US foreign ministers' talks will be held" when they attend an expanded foreign ministers' meeting of the Association of Southeast Asian Nations (ASEAN), a high-ranking official of China's foreign ministry was quoted by the Asahi Shimbun as saying in Beijing on Wednesday.

"China and the United States have the custom of holding a foreign ministers' meeting on the sidelines of ASEAN meetings," the unnamed Chinese official said. "It is better to keep contact."

In Beijing, two senior US State Department officials were to begin talks on Thursday about compensating China for the deaths and damage caused by NATO's bombing of the Chinese embassy in Belgrade in May.

State Department legal adviser David Andrews and deputy assistant secretary for East Asia and the Pacific Susan Shirk arrived in Beijing Wednesday and were scheduled to stay in Beijing until July 17.

China has rejected Washington's explanation that a series of errors, including the use of outdated maps, led to the targeting and bombing of its embassy in Belgrade.

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Singapore Daily Warns Of Harm To Asia Pacific Amid Taiwan-China Row

SINGAPORE, Jul 15, 1999 -- (Agence France Presse) The row between Taipei and Beijing over Taiwan's demand for sovereign state status could harm international relations in the Asia-Pacific region, Singapore's Straits Times said Thursday.

"The international space for vibrant economic and political relations may grow scarce in the Asia Pacific as a whole as Taiwan feels the proximity of China's wrath and the US and Japan are drawn in," said the commentary in the daily, which is believed to reflect government views.

"Asia deserves better," it added.

The commentary noted a "dangerous pattern" to Taiwanese President Lee Teng-hui's remarks over the weekend that were his "latest" and "clearest rejection of the one-China idea."

"It is impossible not to see an emerging pattern in these utterances which, at the least, betray no love for reunification," it said.

In an interview with Deutsche Welle radio Saturday, Lee said in his strongest comments on the issue: "Since we conducted our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations."

China reacted furiously, saying Lee's comments would "bring disaster" to Taiwan and that China's People's Liberation Army (PLA) was ready to crush any attempts to split the country.

Lee sought to calm the tension Wednesday by offering Beijing assurances that it wanted eventual reunification.

"Our mainland policy remains intact," Lee said in a meeting with the de facto US ambassador Darryl Johnson in Taipei. "Nor have our positions changed regarding bilateral exchanges and dialogue."

The Straits Times warned that the cross-strait talks between Beijing and Taipei, which gave hope for reconciliation, "may be the first casualty of a bitter discord that can destroy the delicate equilibrium achieved in northeast Asia."

China would not employ an "outright military response, in the form of war games, because it would have to consider the reaction of the United States," the daily said.

But it added Lee had "timed his bombshell carefully to take advantage of a particularly bad patch in Sino-US relations following the bombing of the Chinese embassy in Belgrade."

Singapore has advocated a peaceful resolution between Taipei and Beijing on the reunification issue, noting that economic growth in Asia depended on continued stability in the region.

Asia is recovering from an economic crisis which struck in mid-1997, interrupting its years of high growth.

By Agence France Presse

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Chinese President Departs For Goodwill Visit To Mongolia

BEIJING, Jul 15, 1999 -- (Agence France Presse) Chinese President Jiang Zemin left here Thursday for a three-day state visit to Mongolia, the official Xinhua news agency reported.

Jiang was scheduled to meet with Mongolian President Natsagiin Bagabandi Thursday afternoon and sign contracts and documents, details of which were not available, the Mongolian foreign ministry told a press briefing.

Bagabandi told Xinhua that Jiang's visit followed the Mongolian president's trip to China in December and is intended to "promote mutual understanding and trust" after almost 50 years of bilateral relations.

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Bomb Blasts Rock Macao, Government Cars Damaged

MACAO, Jul 15, 1999 -- (Reuters) Chinese triad gangs were suspected of using petrol bombs to set fire to six Macao government cars and vans on Thursday, police said.

Police said the cars were damaged in three separate attacks.

A police source said the vehicles may have been targeted by triads angered by the conviction of a gang boss.

A Macao court handed down a six-year jail term on Wednesday for Kong Kok Leong, alleged leader of the 'Seng I' secret triad society.

The Portuguese-run territory, which reverts to Chinese rule in December, has been hit by rising crime and violence in recent years.

Police say rival criminal gangs are fighting a turf war over illicit business on the fringes of Macao's nine casinos.

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New PNG Government Could Ditch Taiwan Deal

PORT MORESBY, Jul 15, 1999 -- (Reuters) Papua New Guinea's new Prime Minister Sir Mekere Morauta gave his strongest indication to date on Thursday that he was leaning towards abandoning a deal struck by his predecessor to recognize Taiwan.

Morauta won overwhelming parliamentary backing on Wednesday to replace former Prime Minister Bill Skate, who had agreed to recognize Taiwan this month in a desperate bid for aid to prop up the economy and help keep his fragmenting coalition in power.

Asked on Thursday if he supported Beijing's "One China" policy, Morauta told reporters: "It has been our policy."

However, he declined to be drawn further on the Taiwan issue, which dominated his first formal news conference.

Taipei and Beijing had long adhered to the idea of one, indivisible China that includes Taiwan as a mutually accepted formula to avoid war.

But Taiwan President Lee Teng-hui incurred Beijing's wrath at the weekend by describing relations as "state-to-state" rather than between "political entities".

Skate's deal with Taipei would make Papua New Guinea Taiwan's 29th ally. Documents obtained by Reuters show Skate went to Taiwan seeking $2.35 billion in aid.

Taiwan has denied it bought the ties and has said it hoped Morauta would retain the new bilateral relationship.

Asked whether it was more important for PNG to reestablish good relations with the World Bank and International Monetary Fund than it was to maintain relations with Taiwan, Morauta told reporters on Thursday: "It is."

Talks between the IMF and PNG on a standby agreement for aid ended in October and negotiations for a $120 million World Bank loan have stalled.

Morauta was also questioned about reports that PNG authorities had seized the passport of Skate's economic adviser, Pirouz Hamidian-Rad, pending questioning over the Taiwan deal.

Morauta said he was not aware of the reports.

Hamidian-Rad could not be immediately reached for comment.

By Reuters

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Taiwan Seeks To Defuse China Row With Reunification Pledge

TAIPEI, Jul 14, 1999 -- (Agence France Presse) Taiwan assured Beijing Wednesday that it wants an eventual reunification, despite remarks by President Lee Teng-hui declaring it a separate state, which have sparked fury in China.

"The ongoing mainland policy has not changed," Taiwan's mainland affairs policy architect Su Chi said during the ruling Kuomintang's decision-making central standing committee.

"Our eventual goal is that through democratic and social reforms in the mainland, the two sides would reunite in democracy," said Su, chairman of the Mainland Affairs Council.

Lee's comments have irked Beijing, which views the nationalist island as a breakaway province since their separation in 1949 at the end of a civil war.

Calling him "traitorous", and likening him to "an insect trying to dig up a tree," an editorial in the People's Daily newspaper said the Taiwanese president was overestimating his own strength.

"Any attempt to divide the country, block its reunification, or create obstacles in the path of development of cross-straits relations is traitorous," the opinion piece said.

Beijing has threatened to take the island by force if it ever declares independence.

Lee on Tuesday restated his claim to national sovereignty, ignoring fierce warnings from China.

"The Republic of China (Taiwan's official name) has always been a sovereign state, not a local government," the president told visiting Honduran Foreign Minister Roberto Flores Bermudez.

"Since we launched constitutional reforms in 1991, we have defined cross-strait relations as state-to-state, or at least special state-to-state," Lee said, repeating a declaration he made at the weekend.

Giving his account of the drastic change in wording, Su said the redefinition of the Taipei-Beijing ties is "a clarification of the political and legal reality between the two sides."

"They began with 'One China policy' and expanded to 'one country, two systems'," Su said.

"This is the trap they set. We are not idiots. We have noticed the development."

Taipei has categorically turned down Beijing's offer of "one country, two systems," the mechanism it uses to rule Hong Kong.

Taiwan has said it would reunify with the mainland only if China embraces democracy.

By Agence France Presse

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Poll: Most In Taiwan Support Burying "One China"

TAIPEI, Jul 14, 1999 -- (Reuters) A majority of people support the Taiwan government's controversial abandonment of the "one China" concept, a public opinion poll commissioned by the ruling Nationalist Party said on Wednesday.

Over 60 percent of local people interviewed said they backed President Lee Teng-hui's categorization of Taiwan-China relations as "special state-to-state" ties rather than the murky old standby of "political entities".

But asked if Taiwan should officially break with the mainland and change its name from the Republic of China to the Republic of Taiwan only 20 percent agreed, the state-funded Central News Agency quoted the survey as saying.

Taipei's junking of the previously mutually accepted "one China" doctrine, which has underpinned Asian security for decades, has infuriated Beijing.

In some of its harshest rhetoric in years, Chinese official media vilified the "traitorous" Lee for scrapping the policy and warned it would bring "monumental disaster" to Taiwan.

"Those who willfully defy the will of the Chinese people will be cast aside by history and be reviled as national criminals," said a commentary in the Communist Party's flagship newspaper, the People's Daily, on Wednesday.

Taipei has said the move signaled no change in its policies towards the mainland and it would continue to promote cross-strait exchanges.

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New PNG Government Says To Review Taiwan Links

PORT MORESBY, Jul 14, 1999 -- (Reuters) Papua New Guinea's new government said on Wednesday it would review a deal to recognize Taiwan struck earlier this month by the South Pacific nation's former leader Bill Skate.

Asked about the relationship with Taiwan, newly-elected Prime Minister Sir Mekere, Morauta told Reuters his government "expected to review all sorts of issues and policies".

Morauta, 53, a former central bank governor, won the leadership after the ruling party's top candidate, John Pundari, crossed the floor of parliament minutes before the body voted 99 votes to five to elect Morauta.

Many had expected Pundari to take the top job after he struck a deal earlier in the week with Skate's PNG First party. The new coalition government will be led by Morauta's People's Democratic Movement.

Morauta, has been a vocal critic of the recognition deal, which has angered China and strained relations with Australia, PNG's southern neighbor and former colonial ruler.

The man tipped to become Morauta's foreign affairs minister, Kilroy Genia, said the new government would act within 30 days to review the plan.

Asked if the plan would be retracted, Genia told Reuters: "I should think so."

The deal was negotiated by Skate in a last-ditch bid to raise foreign aid as his coalition collapsed amid economic crisis.

Documents obtained by Reuters show Skate went to Taiwan seeking $2.35 billion in aid. Taiwan has denied it bought the ties of its 29th ally.

Skate has defended his approach to Taiwan, saying the PNG economy has been hard hit by falling demand for timber and other commodities in Asia, leaving the government strapped for cash.

Politicians expect Morauta to turn instead to the World Bank and the International Monetary Fund. Both institutions had balked at aiding Skate's government and the IMF warned PNG in March of a "looming financial crisis".

Morauta, who headed the Bank of Papua New Guinea in the early 1990s, is regarded as the leadership choice best able to reassure foreign investors of more prudent economic management.

Skate quit as prime minister just after his Taiwan trip but has spent the past week battling to keep his PNG First government in office under a new leader.

By Reuters

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China Welcomes North Korean Visitors

BEIJING, Jul 14, 1999 -- (Agence France Presse) China is welcoming two groups of high level North Korean dignitaries as the two neighbors continue efforts to resume traditional ties following the 1994 death of North Korean strongman Kim Il Sung.

"The close relationship between China and North Korea is like the relationship between mountains and water," Politburo member Li Ruihuan told visiting dignitary Kang Ryen Hak, president of the Central Committee of the Democratic Front for the Reunification of the Fatherland.

"The traditional friendly relationship between China and North Korea...nurtured by the previous generation of proletarian revolutionaries has a profound basis cemented in blood," Li was quoted by the People's Daily as saying.

Kang was visiting China at the invitation of the Communist Party, the paper said.

During the meeting, Li expressed China's concerns about the situation on the Korean Peninsula and reiterated Beijing's hopes of maintaining peace and stability in the region and supporting the peaceful reunification between the north and south, it said.

The visit was believed to be the highest-level official visit to China since North Korean number two Kim Yong-Nam visited China and held talks with President Jiang Zemin and other top leaders in June.

In another meeting Xiong Guangkai, deputy chief of the General Staff of the People's Liberation Army (PLA), met with a delegation from the armed forces of the Democratic People's Republic of Korea (DPRK) led by Vice-Minister Ryo Chun Sok, the paper said.

"The people and armed forces of China and the DPRK cherish their traditional friendship," Xiong was quoted as saying, "China is ready to bring the bilateral friendship and cooperation with the DPRK to a new stage."

China's foreign ministry said ongoing consultations were continuing between the two countries over expected high-level visits, with the Japanese press reporting that visits by Chinese parliamentary head Li Peng to Pyongyang or top North Korean Kim Jong-Il to Beijing were in the works.

This year the two neighbors are celebrating the 50th anniversary of diplomatic relations.

By Agence France Presse

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Chinese Media, Scholars Heap Scorn On Taiwan's Lee

BEIJING, Jul 14, 1999 -- (Reuters) China poured fresh vitriol on "traitorous" Taiwan President Lee Teng-hui on Wednesday, with official media and state-backed scholars vilifying his decision to scrap Taipei's longstanding policy toward China.

The commentary, the latest in a torrent of Communist fury since Taiwan announced on Monday it would no longer adhere to a "one China" policy, indicated Taipei would have a tough time trying to sell its controversial move to Beijing.

"In China, where unity has been much valued, any attempt to divide the country, block its reunification or create obstacles in the path of developing cross-straits relations is traitorous and will be opposed by all the Chinese people," said the Communist Party's flagship newspaper, the People's Daily.

"Those who willfully defy the will of the Chinese people will be cast aside by history and be reviled as national criminals."

China has yet to respond to Taipei's call on Tuesday to sit down and talk - and not take up arms against Taiwan.

The People's Daily, which for years has pilloried Lee's efforts to raise Taiwan's international profile, said his latest policy switch was the culmination of a longstanding plan to separate Taiwan from the mainland.

The Taiwan leader, the daily said, had paid lip service to reunification in the past, "but this time Lee Teng-hui has shed his mask and let his separatism show clearly".

The People's Daily hard line was echoed by government academic groups, which held a meeting to denounce Lee.

The official Xinhua news agency quoted Jiang Dianming, vice president of the Taiwan Studies Society, as saying: "Lee's separatist remarks pose a great threat to cross-straits relations and stability."

Under Mao Zedong, the Communists drove Chiang Kai-shek's Nationalist republic off the mainland in 1949 after a long civil war.

Despite sporadic hostility and diplomatic rivalry, they have maintained an overall peace and fostered growing economic ties by paying lip service to one China.

Taipei junked that on Monday, saying Beijing was using the concept to isolate Taiwan. The decision threw into doubt talks between top envoys set for October.

On Tuesday, Xinhua said Taiwan was heading for a "monumental disaster", but neither state media nor officials have overtly repeated China's longstanding threat to use force if the island declared independence.

Foreign Ministry spokeswoman Zhang Qiyue sidestepped reporters' questions on Tuesday on how China would respond.

China unleashed menacing war games near the island to punish Taiwan in 1995 and 1996 after Lee made a private visit to the United States.

By Reuters

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Taiwan To Underscore Statehood Claim In Pressing UN Bid

TAIPEI, Jul 14, 1999 -- (Agence France Presse) Taiwan will emphasize its claim of statehood when it renews its bid this year to join the United Nations, it was reported Wednesday.

The United Daily News said Taipei was asking its diplomatic allies to send a proposal to the UN asking for the scrapping of the 1971 resolution under which Beijing took over China's seat from Taipei at the world body.

"In this year's proposal," the paper said, "the redefinition of state-to-state relations with the mainland would for the first time be mentioned."

"It would be the most significant altering of the UN policy over the past seven years," the paper said.

Since 1993 Taiwan has repeatedly tried to join the UN, saying Taipei and Beijing are equal political entities and should both have seats.

In an interview Saturday which sparked a storm with China, Taiwanese President Lee Teng-hui said: "Since we conducted our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations."

Beijing was infuriated by the comments from what it regards as a separatist province. Tang Shubei, executive vice-president of China's quasi-official Association for Relations Across the Taiwan Strait, said Monday such remarks would bring "disaster" to Taiwan.

By Agence France Presse

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US, China To Try Mending Ties At ASEAN Meet

TOKYO, Jul 14, 1999 -- (Reuters) China's Foreign Minister Tang Jiaxuan and U.S. Secretary of State Madeleine Albright will hold talks in Singapore later this month to try to mend strained bilateral ties, a senior Chinese Foreign Ministry official was quoted as saying on Wednesday.

Quoting the official in Beijing, Japan's Kyodo news agency said Tang was expected to meet Albright on the sidelines of the Association of Southeast Asian Nations foreign ministers' meeting in Singapore at the end of July.

The official was quoted as saying he was confident that Beijing and Washington would gradually improve bilateral ties strained after NATO's bombing in May of the Chinese embassy in Belgrade.

A U.S. delegation was scheduled to arrive in Beijing on Wednesday to discuss compensation for the damage caused by the bombing, a U.S. official said.

NATO bombs hit the Chinese embassy in Yugoslavia on May 7, killing three reporters and wounding more than 20 people in what China's official media have called a deliberate attack. NATO says the bombing was a mistake.

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US Asks For Dialogue, Restraint In Taiwan Dispute

WASHINGTON, Jul 14, 1999 -- (Reuters) The United States appealed on Tuesday for dialogue and restraint between China and Taiwan after Taipei abandoned its commitment to a "one China" policy.

"We want neither side to take steps or make statements that make it harder to have the kind of dialogue which we think is the only realistic way to solve problems between them," State Department spokesman James Rubin told a daily briefing.

"We continue to urge both sides to engage in meaningful substantive dialogue and to continue efforts to achieve progress in the next round of discussions," he added.

The head of the unofficial U.S. office in Taipei will ask the Taiwan authorities on Wednesday for more information on their position on relations with Beijing, he said.

Until then, the spokesman declined to comment on the substance of the Taiwanese position or even to confirm that it differed from that of the United States.

"We are trying to clarify what the significance, if any, of these (Taiwanese) statements is," he said.

Taiwanese President Lee Teng-hui said at the weekend talks with China would continue only if they were "state-to-state". Other Taiwanese officials later confirmed that the island was switching strategy.

China reacted angrily to the change of policy by Taiwan, saying it was courting a "monumental disaster" and endangering the people of the island for the sake of political adventures.

Rubin said the United States, which continues to support the "one China" principle, was concerned at statements by both sides, including the reaction from China.

"We don't think that the response of Beijing or the original statements are beneficial to taking steps which would make ... discussion more possible," he said.

Asked if the United States might reconsider its policy on Taiwan if the Taiwanese themselves decided they did not want to be part of a single China, Rubin said Washington's "one China" policy was based on the U.S. national interest.

"We do not support Taiwan independence. We do not support Taiwanese membership in organizations where statehood is required. We do not support a 'two China' policy or a 'one China - one Taiwan' policy," he added.

The spokesman later described the spat between Taipei and Beijing as an "episode", apparently implying that Washington hoped it would blow over without lasting consequences.

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Taiwan Military On Alert For Major Chinese War Games

TAIPEI, Jul 13, 1999 -- (Agence France Presse) Taiwanese troops were Tuesday on the alert for any sign that China was to launch major military exercises as cross-straits tensions soared to a three-year high, the defense ministry said.

"There is no sign that Chinese communist troops are preparing for large scale war games," defense ministry spokesman Kung Fan-ding told reporters.

"But the military are keeping a close watch on any development."

A declaration by President Lee Teng-hui that Taiwan is a separate state from China has drawn a furious response from Beijing.

And his comments have ratcheted tensions between the two rivals to the highest levels since 1996 when Beijing launched missile tests in the Taiwan Strait.

"As long as national security confidential military information is guaranteed, any movement by the Chinese communist troops would be made public at an appropriate time," Kung added. "There is no need to panic."

The Ming Pao daily in Hong Kong reported Tuesday that China, angered by Lee's controversial remarks, was planning military maneuvers even bigger than the ones conducted in 1995-96 by the People's Liberation Army (PLA).

Citing unnamed sources in Beijing the independent Chinese-language daily reported Beijing was considering using "a strong powerful threat" to respond to Lee's remarks.

The threats included a naval and air military drill larger than that held in 1996, and delaying the planned visit by Wang Daohan, head of the Association for Relations Across the Taiwan Straits, to Taipei.

The Chinese military had suggested using force in response to Lee's remarks "to show determination to safeguard the unity of the motherland," the paper said.

To vent its anger over Lee's landmark visit to the United States in 1995, Beijing rattled the region by holding several war games and lobbing ballistic missiles into waters near Taiwan.

The crisis was only brought to an end when Washington sent two battle carrier groups to the area.

In an interview with Germany's Deutsche Welle radio station Saturday, Lee said in his strongest wording on the issue: "Since we conducted our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations.

Tang Shubei, executive vice-president of China's quasi-official Association for Relations Across the Taiwan Strait (ARATS), said in Hong Kong Monday Lee was "playing with fire" by maintaining that Taiwan and China were on an equal footing.

He warned at the end of a three-day forum on the reunification of Taiwan and China that such remarks would bring "disaster" to Taiwan.

Beijing, which has regarded Taiwan as a breakaway province since their split in 1949 at the end of a civil war, has threatened to invade Taiwan should the island declare formal independence.

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Taiwan, China Should Cooperate, Not Fight

TAIPEI, Jul 13, 1999 -- (Reuters) Capitalist Taiwan and communist China have become highly interdependent economies that should cooperate for mutual benefit, not brawl over sovereignty, a senior Taipei policymaker said on Tuesday.

Lin Chong-pin, vice chairman of the cabinet's Mainland Affairs Council, said that despite deep suspicions the Chinese mainland now was absorbing the lion's share of Taiwan's outbound investment - more than 42 percent of the total.

"We are a contributing partner to the mainland's growth and development," Lin said in an interview with Reuters Television.

Taiwan estimates local investors have poured more than $30 billion into mainland investments since this was first allowed by the island's Nationalist government in the early 1990s, though funds still must be routed indirectly.

Taiwan still places severe restrictions on inbound investment to the mainland, wary of giving Communist China leverage to destabilize the island's economy.

Lin defended Taiwan's controversial junking of its longtime "one China" policy, which has underpinned the remarkable Taiwan-China economic embrace and East Asian security, as a constructive gesture to foster a "more cooperative relationship between the mainland and Taiwan in the next century".

Beijing has denounced the move in vitriolic terms, saying Taiwan was risking a "monumental disaster" by charting what it saw as a clear course toward formal secession from China.

Lin vowed to persuade Beijing otherwise, saying differences could be solved only by talks - not war.

"We certainly will try every channel possible to explain to Beijing our constructive intentions," Lin said. "To resolve these differences by war is not a post-Cold War behavior of all nations. We should do things by talks.

"We certainly hope for a win-win situation economically, politically and socially across the Taiwan Strait," he said.

Taiwan's shift, first floated on Saturday by President Lee Teng-hui and announced as official policy on Monday, dispensed with the decades-old sleight-of-hand that there was only one China, albeit one split among two "political entities".

Rather, Taiwan wants "special state-to-state" ties that would oblige Beijing to accept that part of China - Taiwan - is ruled by the Republic of China, the sovereign state that was founded in 1911 and ousted from the mainland in 1949.

Taiwan, for its part, would reacknowledge that the Chinese mainland is ruled by the communist People's Republic of China.

"We intend to put both sides on an equal footing so we can talk about anything, including political negotiations - which Beijing has wanted to do," Lin said.

"This is not a reversal of our mainland policy. It is a redefinition of the relationship between the mainland and Taiwan to a more accurate description of the reality that has been in existence since 1949," he said.

Lin was cautious when asked whether Taiwan's gambit risked alienating the United States, its best friend despite Washington's "one China" policy of recognizing only Beijing.

Lin noted that Washington had not commented explicitly on Lee's initiative, but had merely reiterated U.S. policy, which favors a peaceful resolution to the Taiwan issue.

Lin indicated that Taipei was not worried about any damage to U.S.-Taiwan trade and investment ties but acknowledged cautiously that Taiwan is vulnerable to economic pressure from China.

"Our trade is dependent on the mainland exceeding the threshold of safety," Lin said.

Lin said Taiwan's policy shift could lead to a very fruitful exchange if China does not scuttle a landmark October visit to the island by its top Taiwan affairs envoy, Wang Daohan.

Lin said Taiwan's dropping of the "one China" policy had resulted from a two-year review, reflected popular thinking and had nothing to do with domestic politics or Taiwan's March 2000 presidential election

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Taiwan Leader Under Fire For Threatening Cross-Strait Stability

TAIPEI, Jul 13, 1999 -- (Agence France Presse) Taiwan President Lee Teng-hui came under fire Tuesday for jeopardizing national security by calling China and Taiwan two states in a policy shift which has drawn an angry response from rival Beijing.

The island's leading United Daily News said Lee had been "irresponsible and politically immoral" for re-igniting tensions over the sensitive issue of Taiwan's status.

Lee told Germany's Deutsche Welle radio station Saturday in an interview that: "Since we conducted our constitutional reforms in 1991, we have redefined cross-strait relations as nation-to-nation, or at least as special state-to-state relations.

"Under such special state-to-state relations, there is no longer any need to declare Taiwan independence."

China has considered the island a renegade province since they split in 1949 at the end of a bitter civil war when Mao Zedong's communist forces, drove the nationalist troops led by Chiang Kai-Shek to the island.

Beijing has threatened to take the island with force if it ever tries to declare independence.

Lee's comments were an apparent shift in the policy long-accepted by both Beijing and Taipei that there is only one China which will one day be reunified.

"The guiding principle in cross-strait exchanges is peace, not conflict. But what Lee told Deutsche Welle will cause conflicts," the United Daily News said.

"Many must have realized that the move exposed President Lee's serious worries about losing power and influence on policy-making before retiring from presidency.

"His latest statement is more like a final battle trying to prolong his political life, or a presidential campaign strategy, rather than a rational declaration of the country's policy."

Lee's tenure ends in May next year, and he has been grooming Vice President Lien Chan to be his successor.

"Political ambiguity" was the precious card up Taipei's sleeve, the United Daily News said.

"It is extremely irresponsible and politically immoral for an outgoing head-of-state to launch such a controversial political issue. What we see is a strongman who risks national security while clinging to his fading power."

Another leading paper China Times also warned Taiwan might be the loser due to Lee's "two-state theory".

"It is a political art for Taipei, Beijing and the international community to resolve cross-strait differences based on flexibility and ambiguity," the paper said.

"The two-state theory might reflect political reality, satisfy the emotional needs of some, and force all sides into a showdown. But risks arise at the same time ... Policy-makers in Taipei might try to gain, but they could lose more.

"Under the new rules of this game, if Beijing overacts, cross-strait tensions will be heightened. It will definitely hurt Taiwan's long-term interests," the China Times said.

By Agence France Presse

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Chinese Ambassador Summoned To Swedish Ministry

STOCKHOLM, Jul 13, 1999 -- (Agence France Presse) The Chinese ambassador was summoned Monday to the Swedish foreign ministry because of his government's refusal to accredit a Swedish diplomat married to a Chinese dissident, the ministry said.

The government in Beijing had twice indicated to the authorities in Stockholm that they were opposed to the nomination of Anna Gustafsson as cultural attaché.

Gustafsson is married to a Chinese opponent of the regime.

Ambassador Quiao Zonghai was received by the Swedish ministry secretary-general Jan Eliasson for a meeting which lasted 40 minutes, the ministry said.

Sweden did not accept interference in its choice for foreign diplomatic posts, but acknowledged that the country concerned had a right under the Vienna accords to grant or refuse accreditation, a ministry spokeswoman said.

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China Rattles Sabers In New Taiwan Row

BEIJING, Jul 13, 1999 -- (Reuters) A genuine threat of force lurks just below the surface as Beijing rattled its sabers against Taiwan President Lee Teng-hui on Tuesday for declaring he would abandon the "one China" policy, China-based diplomats said.

A series of top officials vented their fury on Lee for throwing aside a policy that has largely kept the peace between the fierce rivals for decades.

They did not specifically invoke China's pledge to invade if Taiwan declared independence, which it has not done.

But the diplomats said the military threat was implied, even though Beijing did not appear to want to escalate the row, at least not at the moment.

"Even though they don't threaten to use force, one must not downplay the statement in any way," said one Asian diplomat of a Foreign Ministry statement on Monday that bristled with rage.

"I would not have expected China to use those terms in this particular context, unless they wish to escalate the issue, of course," he said, although he added: "I believe China feels it is not in its interest to escalate this issue."

Chinese snarls may already have had an impact, with a series of conciliatory comments today from Taiwan. These included Lin Chong-Pin from the cabinet's Mainland Affairs Council, who told Reuters Television Taiwan would seek every channel possible to explain its good intentions to Beijing.

Lee's pronouncement of the death of the "one China policy - under which Taiwan would embrace a democratic China - took everyone by surprise and no one was sure how Beijing would proceed.

Taipei urged China to solve their differences through talks, not war, and said it would make exhaustive efforts to persuade Beijing to accept the about-face, but talk did not seem to be the first thing on Beijing's mind.

Senior Chinese envoy Wang Daohan, due to make a groundbreaking visit to Taiwan in October, said Lee's stunning policy change left no ground for the unofficial contacts he is in charge of conducting.

"The test will be if Wang Daohan does call off his visit," one Western diplomat said. "That's the key thing to watch," the diplomat said. "If he doesn't go, then that's a very bad sign."

Diplomats said the other big question was: will China use war games to intimidate Taiwan in the run-up to the island's presidential elections next year, as it did three years ago.

"There is an implicit sense that China might, if required, be called on to use its military force," the Asian diplomat said when asked if that was likely.

The Chinese war games three years ago involved missile launches into Taiwan waters, and the United States sent two naval battlegroups to the area.

It was one of the tensest moments in the Taiwan Strait for decades.

This time, Taiwan scored no points with its most important friend - Washington - where the initial reaction was to contain the fall-out by reaffirming the U.S. commitment to a "one China" policy.

"The U.S. is not very pleased by this because this is yet another complication and they've got enough problems with China as it is at the moment," the Western diplomat said.

Sino-U.S. relations are already at a low ebb following NATO's bombing of the Chinese embassy in Belgrade in May.

"The Chinese probably suspect the U.S. is somehow behind this," a second Asian diplomat said of Lee's pronouncement.

"They're probably thinking if the U.S. wasn't selling arms, Taiwan wouldn't be doing this," he added.

China's official Xinhua news agency recalled that bilateral ties worsened in 1995 after Lee made a private visit to the United States - the first Taiwan leader to do so since Washington switched recognition to Beijing in 1979 - and "sabotaged the stability and harmony" across the Taiwan Strait.

"History is sometimes shockingly similar," Xinhua said in a commentary splashed on the front page of major newspapers on Tuesday.

"This will bring monumental disaster to the people of Taiwan."

The Western diplomat said it was possible the threat of a threat could do Beijing's work for it if Taiwan's financial markets went into a tailspin and pushed Lee into reversing his position.

Taiwan Finance Minister Paul Chiu appealed for calm in the island's markets on Tuesday, saying swings were normal and new frictions with China should not hurt confidence.

Chiu issued the appeal shortly before the close of trading in the Taiwan bourse, when the benchmark TAIEX index was down about three percent on the new tensions.

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EU's Patten Wants China In WTO On "Sensible Terms"

LONDON, Jul 13, 1999 -- (Reuters) Newly appointed European Union Commissioner Chris Patten said on Tuesday he was in favor of China joining the World Trade Organization on "sensible terms".

The last colonial governor of Hong Kong - who often clashed with Beijing before the 1997 handover of power - said trade and politics were different matters and that China knew his opinions on human rights would not stand in the way of its export drive.

"I am in favor of China being a member of the World Trade Organization on sensible terms," Patten told BBC radio. "The Chinese know my views - I separate trade from politics."

China is ranked 10th in the world as a trading nation and has sought admission to the WTO or its predecessor for 13 years.

Patten said he had often argued China's case for most favored nation trading status in the United States.

"At the same time, my views on human rights abuses in China and elsewhere are equally clear and equally explicit," he said.

Patten, 55, a former chairman of Britain's opposition Conservative party, was named EU commissioner for external affairs last Friday, one of two British commissioners.

He will coordinate the foreign policy work of three other commissioners dealing with trade, development and EU enlargement.

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US Backs "One China" Policy Despite Taiwan Shift

WASHINGTON, Jul 13, 1999 -- (Reuters) The United States, seeking to contain a potential new crisis over Taiwan, reaffirmed on Monday that it recognized one China ruled from Beijing despite Taipei's decision to reject that policy.

"Our policy is unchanged. Our one-China policy is long-standing and certainly well-known," State Department deputy spokesman James Foley said.

Foley reiterated the U.S. view that Taiwan's future was "a matter for the Chinese people on both sides of the Taiwan Strait to resolve."

"The United States has an abiding interest and concern that any such resolution be a peaceful one. And to that end the United States urges both sides to engage in meaningful, substantive dialogue," he added.

The White House struck a similar note. "Our main interest is in seeing a cross-strait dialogue between the People's Republic and Taiwan so that issues between the two can be resolved by peaceful means," said P.J. Crowley, a spokesman for the National Security Council.

They made their comments after Taiwan on Monday abandoned the one China policy that has helped underpin East Asian security for decades, prompting a furious Beijing to warn that Taipei had stumbled to a dangerous "precipice."

Taipei said the idea of one, indivisible China that included Taiwan -- a mutually accepted formula which has prevented war between the two sides for decades -- had to be scrapped because Beijing was using it to undermine the legitimacy of the island's government.

Foley, reflecting the extreme sensitivity of the issue both in the United States and Asia, repeatedly declined to comment on Taiwan's policy shift.

He declined to predict what impact the Taiwan change might have on dialogue between Taiwan and China, saying diplomacy was in the interests of both.

"They've had ups and downs before. They've had declarations before that each side has reacted negatively to. But they have managed, though, to continue the dialogue, and I think they had recent meetings that were meant to help prepare for a future visit (between officials) ... and we hope that that will go forward."

Since 1949, when communists drove the Nationalist Republic of China off the mainland and founded the People's republic of China, the "one China" formula has been one of the few things the two sides agreed on.

Implicit in the formula was a promise by the Nationalists not to seek independence for Taiwan. Beijing has vowed to crush any such moves by force.

Taipei has many supporters in the U.S. Congress and the administration has been under pressure to be more receptive to ideas about Taiwanese independence.

A 1998 study by a Pentagon-funded think tank, the National defense University, concluded that the United States would be drawn into any war between China and Taiwan.

In 1979, the United States switched its recognition from Taipei to Beijing.

But the U.S. Taiwan Relations Act permits unofficial contacts between Washington and Taipei to flourish. It also provides for arms sales to Taiwan, which Beijing bitterly opposes.

The act also commits the United States to "appropriate action" in response to threats to Taiwan. In 1996, after China threatened Taiwan, the United States sent two aircraft carrier groups to the region.

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Japan Affirms 'One China' Stance After Taiwan Shift

TOKYO, Jul 13, 1999 -- (Reuters) Japan, echoing the U.S. position, reaffirmed on Tuesday that it recognized "one China" ruled from Beijing and expressed hopes that Beijing and Taipei would work out their problems peacefully.

"There is no change at all in the Japanese government's position on Taiwan," Foreign Ministry spokesman Sadaaki Numata told Reuters.

Numata said Japan was sticking to a 1972 joint declaration which stipulated that Tokyo respected Beijing's view of Taiwan as an "inalienable" part of China, adding that Tokyo would also keep its policy of having non-governmental working ties with Taiwan.

The comment mirrored that by U.S. State Department spokesman James Foley on Monday. Foley said Washington's "one China" policy was unchanged and reiterated that Taiwan's future was "a matter for the Chinese people on both sides of the Taiwan Strait to resolve".

Taiwan on Monday startled foes and allies alike by abandoning the one-China policy that has helped underpin East Asian security for decades, prompting a furious Beijing to warn that Taipei had stumbled to a dangerous "precipice".

On Tuesday, China said Taiwan was heading for a "monumental disaster" but stopped short of restating Beijing's long-standing threat to invade if Taiwan abandoned the common goal of reunification and declared independence.

Tokyo urged the two sides to settle their disputes by talking.

"The government of Japan strongly hopes that the issue...will be resolved peacefully through direct dialogue between the parties on both sides of the Strait," Numata added.

Prime Minister Keizo Obuchi returned on Sunday from a three-day visit to Beijing during which he sought to soothe Chinese worries about Tokyo's tighter military ties with the United States and pledged Japan would never again become a military power.

In talks with Obuchi, Chinese Premier Zhu Rongji urged Tokyo to exclude Taiwan -- which Beijing views as a renegade province -- from the scope of new U.S.-Japan defense guidelines which went into effect in May.

Tokyo has been vague on the geographic scope of the guidelines in order to avoid irritating Beijing, which suspects that the new military arrangements are designed to protect Taiwan in the event of Chinese military action against the island.

Japan extended diplomatic recognition to China in 1972 but has strong unofficial business ties with Taiwan, a former colony to which it renounced all claim in 1952.

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Trade Official: Chinese Sanctions Could Cost Taiwan Billions

TAIPEI, Jul 13, 1999 -- (Agence France Presse) A Taiwanese trade official reportedly warned Tuesday that current tensions with rival China, the most serious in three years, could cost it dearly if Beijing decided to impose trade sanctions.

"Taiwan would see its exports pummeled by 7.64 percent should the mainland authorities slap a trade sanction," an official with the Industrial Development Bureau was quoted by the state-funded Central News Agency as saying.

Taiwan exported $18.4 billion worth of goods to the mainland last year, while imports from China totaled $4.11 billion, according to the Board of Foreign Trade.

A declaration by President Lee Teng-hui Saturday that Taiwan is a separate nation from China has drawn a furious response from Beijing.

His comments have ratcheted up tensions between the two rivals to their highest levels since 1996 when Beijing launched missile tests in the Taiwan Strait.

Taiwan share prices closed 3.1 percent lower Tuesday on panicky selling sparked by the row.

The Ming Pao daily in Hong Kong reported Tuesday that China, angered by Lee's remarks, was planning military maneuvers even bigger than those of three years ago.

The industry official said Taiwan's prosperous computer sector could bear the brunt of sanctions as nearly 40 percent of the island's computer and peripheral products were manufactured in the mainland.

In 1996 Lee launched a "no haste, be patient" investment policy towards the mainland for fear the island would be held hostage economically by China, which regards Taiwan as a breakaway province.

Under the policy, Taiwanese enterprises are prohibited from making infrastructure investments worth more than $50 million in the mainland.

But with or without government approval, more than 40,000 Taiwan enterprises have poured an estimated $40 billion worth of investments into China.

By Agence France Presse

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US, China Plan Talks On Money For Bomb Victims

WASHINGTON, Jul 13, 1999 -- (Agence France Presse) Two senior State Department officials were to leave for Beijing Tuesday for talks on compensating China for deaths and damage caused by NATO's bombing of the Chinese embassy in Belgrade.

State Department legal adviser David Andrews and deputy assistant secretary for East Asia and the Pacific Susan Shirk were to leave here Tuesday and spend July 14-17 in Beijing, officials said Monday.

Their mission aims to "follow up on our offer of a humanitarian payment and discuss issues related to property damage" resulting from the May 7 bombing, State Department spokesman James Foley said.

Officials here declined to speculate on whether their trip would produce an agreement or to say with whom they would meet in China.

But they noted that, during a visit to Beijing last month, Undersecretary of State Thomas Pickering offered compensation to the families of three people killed in the bombing, which NATO and Washington have described as a tragic error.

The May 7 bombing killed three Chinese journalists and injured many other people. China has rejected Washington's explanation that a series of errors led to the targeting of its embassy in Belgrade.

Washington has also left open the possibility of compensation for damage to the embassy itself, though US officials say that that is a more complicated question.

Among other issues, they want to discuss damage to US diplomatic facilities inflicted by angry crowds in China in the days after the bombing.

By Agence France Presse

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China Says Taiwan Heading For Monumental Disaster

BEIJING, Jul 13, 1999 -- (Reuters) China told Taiwan on Tuesday it was heading for a "monumental disaster" after abandoning the "one China" policy, which has helped underpin East Asian security for decades.

"It is very dangerous to use the interests, happiness and future of Taiwan compatriots as a stake to engage in political adventures," the official Xinhua news agency said in a commentary splashed on the front page of major newspapers.

"This will bring monumental disaster to the people of Taiwan."

However, the commentary stopped short of restating Beijing's longstanding threat to invade if Taiwan abandoned the common goal of reunification and declared independence.

Taiwan President Lee Teng-hui, due to step down next year, startled China over the weekend by saying uneasy bilateral talks could continue only if they were considered "state-to-state" rather than between "political entities".

Taipei said the idea of one, indivisible China that included Taiwan -- a mutually accepted formula that has prevented war between them -- had to be scrapped because Beijing was using it to undermine the legitimacy of Taiwan.

Fewer than 30 countries have diplomatic relations with Taiwan, which often offers generous aid to its allies.

China reacts with fury whenever Taipei succeeds in garnering another friend, as it did last week when Papua New Guinea established diplomatic relations with Taiwan.

Beijing is rarely shy about making threats in an attempt to reverse a decision in the battle to push Taipei into diplomatic isolation begun when the Communists won the civil war in 1949 and drove the defeated Nationalists into exile.

The timing of Lee's abandonment of the "one China" policy -- under which Taiwan said it was willing to reunite with a democratic mainland -- seems to have puzzled everyone as a landmark looms with the scheduled visit to Taiwan by a senior Chinese envoy.

Wang Daohan, the chairman of the Association for Relations Across the Taiwan Straits due in Taipei in October, said the policy change left no basis for unofficial contacts.

The Xinhua commentary warned that "those who play with fire will get burnt". It heaped abuse on Lee for attempting to break Taiwan out of diplomatic isolation and called him an international troublemaker.

"He is publicly poisoning the atmosphere on the two sides" of the Taiwan Strait, Xinhua said. "Lee Teng-hui is a troublemaker internationally."

There was no support for Lee from his most important friend -- the United States -- where the initial reaction to his startling policy change was to contain the fall-out.

"Our policy is unchanged. Our one-China policy is long-standing and certainly well-known," State Department deputy spokesman James Foley said.

Taiwan's future was "a matter for the Chinese people on both sides of the Taiwan Strait to resolve", he said.

"The United States has an abiding interest and concern that any such resolution be a peaceful one. And to that end the United States urges both sides to engage in meaningful, substantive dialogue."

Washington switched diplomatic recognition to Beijing from Taipei in 1979. It still supplies weapons to Taiwan and three years ago sent two naval battle groups to the area as China fired off missiles near Taiwan during war games.

Chinese Foreign Ministry spokesman Zhu Bangzao warned there was no possible compromise on the notion of one China.

"We sternly warn Lee Teng-hui and the Taiwan authorities not to underestimate the Chinese government's firm determination to uphold the nation's sovereignty, dignity and territorial integrity," Zhu said.

"Don't underestimate the courage and power of the Chinese people's to oppose separatism and Taiwan independence," he said. "Lee Teng-hui and the Taiwan authorities must recognize the situation, rein in at the brink of the precipice and immediately halt all activities aimed at splitting the motherland."

By Reuters

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Taiwan Appeals For Talks With China, Not War

TAIPEI, Jul 13, 1999 -- (Reuters) Taiwan urged rival China on Tuesday to solve their differences through talks, not war, and vowed exhaustive efforts to persuade Beijing to accept the island's controversial junking of its "one China" policy.

"We certainly will try every channel possible to explain to Beijing our constructive intentions," Lin Chong-pin, a senior policymaker, told Reuters Television in an interview.

"To resolve these differences by war is not a post-Cold War behavior of all nations. We should do things by talks."

Lin said Taiwan would try even harder to persuade Beijing to go ahead with a landmark October visit to the island by its top Taiwan straits negotiator, Wang Daohan, and said it was up to communist China to make or break cross-strait relations.

Lin said a visit by Wang could foster a "more cooperative relationship between the mainland and Taiwan in the next century" and held out hope that Wang's tour would proceed, saying he had heard no "formal" word of a cancellation.

"The final determinant is Beijing's behavior," he said when asked about Beijing's charge that Taiwan was risking "monumental disaster". "We hope to see a more sensible and responsible behavior from Beijing, as all great powers do."

Lin said Taiwan's dropping of the "one China" policy, which has underpinned cross-strait and Asian security for decades, had resulted from a two-year review, reflected popular thinking and had nothing to do with domestic politics or Taiwan's March 2000 presidential election.

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HK Papers Lambaste Taiwan, Experts Cautious

HONG KONG, Jul 13, 1999 -- (Reuters) Hong Kong newspapers sharply criticized Taiwan on Tuesday for abandoning a "one China" policy, saying the move destabilized the region and hurt efforts at economic recovery.

"Such an idea suffices to destroy the foundation of mutual trust built up over the years between the two sides (China and Taiwan) of the Strait," the independent Ming Pao Daily News said.

Taiwan President Lee Teng-hui said at the weekend that talks with China would continue only on a "state-to-state" basis, scrapping a "one China" policy that has helped underpin East Asian security for decades.

A Taiwan affairs expert in Hong Kong said Taipei was trying to break out of a diplomatic limbo caused by the "one country" principle, which he said had done Taiwan little good.

Byron Weng, professor of government and public administration at the Chinese University, said the "state-to-state" description that Lee used was simply stating the facts.

"The 'one-country' principle is not satisfactory where Taiwan is concerned because under that principle, nothing that Taiwan can do can benefit Taiwan," Weng told Reuters.

"The fact is we have two governments. Neither can claim to be ruling over the other's territory and neither can truly claim they do the foreign relations for the other. That's the reality."

But Hong Kong newspapers were flatly against Taiwan's move.

"This move does not only go against the wish of most Taiwanese of maintaining the status quo, but it will even provoke a crisis of confrontation between the two sides," Ming Pao said in an editorial.

Quoting unidentified Beijing sources, the newspaper said Beijing was considering war games that would be even bigger than those in 1996, which created tensions across the Taiwan Strait and in the region.

"If cross-strait relations deteriorate, mainland China, Taiwan, Hong Kong and even the region would be affected in a tragic way," the independent Apple Daily said.

"If a crisis re-emerges this time, it would be even more difficult to solve because Sino-U.S. relations are at a low," its editorial said. "If the relationship between the two sides really deteriorates to that stage, it will be a tragedy for China, Taiwan, Hong Kong and the entire region."

Pro-Beijing Ta Kung Pao and Wen Wei Po warned Lee not to "play with fire", and asked him to stop all activities aimed at splitting the country.

But Weng said the outcome of the quarrel was unclear but he doubted Taiwan would have made such a move "without very careful evaluation of various scenarios, possibilities, including the potential of another military crisis of some sort".

"Beijing, too, understands that they have their limitations," he said. "The American factor still weighs quite heavily in this situation."

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Taiwan People Hail Lee For Standing Up To Beijing

TAIPEI, Jul 13, 1999 -- (Reuters) Ordinary Taiwan people praised President Lee Teng-hui on Tuesday for daring to stand up to Communist China by scrapping the "one China" policy, saying the move was long overdue.

"This is such a huge step not only for people on the island but Taiwan political leaders as well," 45-year-old stationery store owner Chen Yun-fu told Reuters on Tuesday.

Student Huang Yu-sha said Lee's provocative move was a liberating recognition of Taiwan's true situation.

"Taiwan has been a sovereign state for decades. What Lee said was just a reflection of the truth," she said.

Lee enraged China and sparked criticism at home by scuttling the "one China" formula - a recognition by both sides that Taiwan is an integral part of China.

The policy was key to the relationship between Taiwan's Nationalist Republic of China and the mainland's People's Republic of China because it implied a promise by Taiwan not to seek formal independence from the rest of China.

Though the move certainly did not mean the island would now seek independence, Taiwan officials said "one China" had to be scrapped because the mainland was using the concept to further marginalize the Nationalist government on the world stage.

"It is so exciting to see some people finally dare to stand up and tell it like it is, which might infuriate China," Huang said.

Communist China's response has been furious, warning Taiwan's government that it faced an unspecified but "monumental disaster" if it stuck by the new position.

But Taipei residents interviewed by Reuters appeared unconcerned by such threats.

"I don't think this would trigger military tensions despite Beijing's longstanding threat to invade if Taiwan abandoned the common goal of reunification," said a 53-year-old betel nut vendor surnamed Huang.

China regards Taipei's government as illegitimate and reserves the right to retake the island by force.

Huang said China would not dare to risk the world condemnation that would certainly follow any attack on Taiwan.

Engineer Chen Yun-ho said Beijing's warning that Taiwan was "playing with fire" was nonsense and that President Lee has helped to solve an identity crisis on Taiwan caused by Beijing's unceasing campaign to thwart international recognition of the island's government.

"It helps redefine Taiwan's ambiguous situation," Chen said

However, not all of those interviewed lined up behind Lee.

"This is just a move by Lee to grab world attention in the waning months of his presidency," said Shueh Sung-chen, a bank guard.

Taiwan will elect Lee's successor in March.

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Macao Plans Handover Airshow - Balloons, Skydivers

MACAO, Jul 14, 1999 -- (Reuters) Portuguese-run will stage a giant airshow to mark its return to Chinese rule on December 20, with international skydivers, balloonists and stunt flyers.

Macao's Handover Celebrations Committee said on Tuesday the daredevil flying would be broadcast live in China on the first day of Chinese rule. The 90-minute show will also be transmitted to 180 countries and regions throughout the world.

The tiny gambling enclave reverts to China after 442 years of Portuguese rule at midnight on December 19. Some 2,500 officially invited guests are expected to attend the ceremony.

Chinese President Jiang Zemin and Premier Zhu Rongji are both expected, as is Portuguese President Jorge Sampaio.

The airshow will have skydivers and aviators from Hong Kong, the Chinese mainland, the Czech Republic and France performing aerobatic stunts and formation flying.

Some of the world's top stunt flyers will take part, such as the Sky Box team from the Czech Republic and the Space Knights from France.

Eighteen giant balloons will take off from nine locations in Macao in the evening of December 19.

By Reuters

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China Rules Out Including Damage To US Missions In Compensation Talks

BEIJING, Jul 13, 1999 -- (Agence France Presse) China has ruled out discussing the payment of indemnities for damage to US missions during anti-NATO protests, as US officials were to arrive for talks on compensation for the bombing of China's embassy in Belgrade.

"US and Chinese officials will soon meet in Beijing to discuss compensation for the deaths, injuries and damage to property caused by bombing of the Chinese embassy in Yugoslavia," foreign ministry spokeswoman Zhang Qiyue said.

"The question of the US embassy in Beijing is not of the same order and cannot be considered side by side," she told a briefing in Beijing.

State Department legal adviser David Andrews and deputy assistant secretary for East Asia and the Pacific, Susan Shirk, were to leave Washington Tuesday and spend July 14-17 in Beijing, officials said Monday.

Their mission aims to "follow up on our offer of a humanitarian payment and discuss issues related to property damage" resulting from the May 7 bombing, State Department spokesman James Foley said.

The bombing killed three Chinese journalists and injured 20 others. China has rejected Washington's explanation that a series of errors led to the targeting of its embassy in Belgrade.

Several US lawmakers and officials have called on China to pay for damage to US missions which came under fire from enraged demonstrators -- whose protests were fully supported by the central government -- following the embassy bombing.

During a visit to Beijing last month, Undersecretary of State Thomas Pickering offered compensation to the families of three people killed in the bombing, which NATO and Washington have described as a tragic error.

By Agence France Presse

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US Backs "One China" Policy Despite Taiwan Shift

WASHINGTON, Jul 13, 1999 -- (Reuters) The United States, seeking to contain a potential new crisis over Taiwan, reaffirmed on Monday that it recognized one China ruled from Beijing despite Taipei's decision to reject that policy.

"Our policy is unchanged. Our one-China policy is long-standing and certainly well-known," State Department deputy spokesman James Foley said.

Foley reiterated the U.S. view that Taiwan's future was "a matter for the Chinese people on both sides of the Taiwan Strait to resolve."

"The United States has an abiding interest and concern that any such resolution be a peaceful one. And to that end the United States urges both sides to engage in meaningful, substantive dialogue," he added.

The White House struck a similar note. "Our main interest is in seeing a cross-strait dialogue between the People's Republic and Taiwan so that issues between the two can be resolved by peaceful means," said P.J. Crowley, a spokesman for the National Security Council.

They made their comments after Taiwan on Monday abandoned the one China policy that has helped underpin East Asian security for decades, prompting a furious Beijing to warn that Taipei had stumbled to a dangerous "precipice."

Taipei said the idea of one, indivisible China that included Taiwan -- a mutually accepted formula which has prevented war between the two sides for decades -- had to be scrapped because Beijing was using it to undermine the legitimacy of the island's government.

Foley, reflecting the extreme sensitivity of the issue both in the United States and Asia, repeatedly declined to comment on Taiwan's policy shift.

He declined to predict what impact the Taiwan change might have on dialogue between Taiwan and China, saying diplomacy was in the interests of both.

"They've had ups and downs before. They've had declarations before that each side has reacted negatively to. But they have managed, though, to continue the dialogue, and I think they had recent meetings that were meant to help prepare for a future visit (between officials) ... and we hope that that will go forward."

Since 1949, when communists drove the Nationalist Republic of China off the mainland and founded the People's republic of China, the "one China" formula has been one of the few things the two sides agreed on.

Implicit in the formula was a promise by the Nationalists not to seek independence for Taiwan. Beijing has vowed to crush any such moves by force.

Taipei has many supporters in the U.S. Congress and the administration has been under pressure to be more receptive to ideas about Taiwanese independence.

A 1998 study by a Pentagon-funded think tank, the National defense University, concluded that the United States would be drawn into any war between China and Taiwan.

In 1979, the United States switched its recognition from Taipei to Beijing.

But the U.S. Taiwan Relations Act permits unofficial contacts between Washington and Taipei to flourish. It also provides for arms sales to Taiwan, which Beijing bitterly opposes.

The act also commits the United States to "appropriate action" in response to threats to Taiwan. In 1996, after China threatened Taiwan, the United States sent two aircraft carrier groups to the region.

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Chinese Official Blasts Taiwan President For Nationhood Statement

HONG KONG, Jul 12, 1999 -- (Agence France Presse) A Chinese official on Monday blasted Taiwan for deviating from the "one China" policy after its President Lee Teng-hui declared the island a separate nation from China.

Tang Shubei, executive vice-president of the Association for Relations Across the Taiwan Strait (ARATS), told reporters here that Lee was "playing with fire" by saying Taiwan and China were on an equal footing.

He said at the end of a three-day forum here on the reunification of Taiwan and China that such remarks would bring "disaster" to Taiwan.

In a radio interview on Saturday Lee firmly declared Taiwan to be a separate nation from China, in the strongest such wording from Taipei's leadership.

"Since we conducted our constitutional reforms in 1991, we have redefined cross Strait relations as nation-to-nation, or at least as special state-to-state relations," he said.

Taiwan had previously demanded it be regarded as a "political entity" in any reunification talks with the mainland.

Tang said Lee's remarks would have "serious effects" on the normal development of cross-strait relationships and had damaged the consensus on one China reached with his organization’s counterpart, the Taiwan-based Straits Exchange Foundation (SEF).

He called on Taiwanese officials and Taiwan-based SEF representatives to keep their word.

China on Sunday denounced Lee's comments as "separatist malice" and declared Taiwan part of China whatever its leader might say.

"There is only one China in the world and Taiwan is a part of it," said a Chinese Communist Party Central Committee spokesman.

Taipei and Beijing split in 1949 at the end of a civil war. China has considered Taiwan a renegade province ever since, a stance which Lee said showed "Beijing has totally ignored historical and legal reality".

By Agence France Presse

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China Says Taiwan "Playing With Fire"

Jul 12, 1999 -- China warned Taiwan President Lee Teng-hui on Monday against "playing with fire" by scrapping the "one China" principle that has governed relations between Taipei and Beijing.

"We can clearly see that he has gone a long way down the road of playing with fire," state television quoted Foreign Ministry spokesman Zhu Bangzao as saying.

"We sternly warn Lee Teng-hui and the Taiwan authorities not to underestimate the Chinese government's firm determination to uphold the nation's sovereignty, dignity and territorial integrity," Zhu said.

A Taiwan official confirmed on Monday an explosive policy floated by Lee in which ties with Beijing would be regarded as "special relations" between two Chinese states that may one day unite as a single nation.

"Don't underestimate the courage and force of the Chinese people's to oppose separatism and Taiwan independence," Zhu said. "China's reunification is the trend of times and the will of the people.

"Lee Teng-hui and the Taiwan authorities must recognize the situation, rein in at the brink of the precipice and immediately halt all activities aimed at splitting the motherland," he said.

China regards Taipei's government as the illegitimate ruler of a rebel province and reserves the right to retake the island by force.

"It inevitably will have a serious effect on improving relations between the two sides and stability in the Taiwan straits," Zhu said, without specifically restating the threat to use force.

He said Lee had taken an "extremely dangerous step" on the road of splitting the country.

China's top negotiator with Taiwan, speaking earlier on Monday of weekend news reports which foreshadowed the policy change, said Taiwan would leave no basis for unofficial meetings between representatives of Taipei and Beijing.

Wang Daohan, chairman of the Association for Relations Across the Taiwan Straits (ARATS), said he was "shocked " by Lee's comments that meetings between Beijing and Taipei negotiators constituted talks between states, the official Xinhua news agency reported.

Beijing and Taipei handle ties through the semi-official ARATS and its Taiwan counterpart the Straits Exchange Foundation (SEF).

"This formulation means there is no basis for contact, exchange and communication between ARATS and SEF," Wang said, casting his planned October visit to Taiwan into doubt.

Wang would be the most senior mainland official to visit Taiwan since the Nationalist Party retreated to the island after its defeat in 1949 at the hands of the Chinese Communist Party in a civil war.

Since the early 1990s, Taipei and Beijing have engaged in wary semi-official negotiations with the understanding that they were both "political entities" under a single China.

"The one China principle is the basis for the development of cross-straits relations," Xinhua quoted Wang as saying.

"ARATS resolutely protects the one-China principle and insists on operating under the principle to advance cross-strait relations and hasten the peaceful reunification of the motherland with SEF."

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Lee Teng-Hui: Taiwan, China Two Separate Nations

TAIPEI, Jul 12, 1999 -- (Agence France Presse) Taiwan President Lee Teng-hui has firmly declared his island to be a separate nation from China, in the strongest such wording from Taipei's leadership.

"Since we conducted our constitutional reforms in 1991, we have redefined cross Strait relations as nation-to-nation, or at least as special state-to-state relations," Lee said Saturday in an interview with Germany's Deutsche Welle radio station.

"Under such special state-to-state relations, there is no longer any need to declare Taiwanese independence," Lee said.

Taiwan had previously demanded it be regarded as a "political entity" in any reunification talks with the mainland. Taipei and Beijing split in 1949 at the end of a civil war.

China has since considered Taiwan a renegade province, a stance which Lee said showed "Beijing has totally ignored historical and legal reality."

Lee, the first democratically elected Taiwan president, said the vast gap between the "systems" of the two sides was the biggest barrier to reunification.

"It would be our earnest desire to see the Chinese communist authorities engage in democratic reforms and thus create more favorable conditions for a democratic China," he added.

He also called on Beijing to renounce the possible use of force in dealing with Taiwan, which China has repeatedly refused to do.

"But the mainland authorities always repeated their official line, which is the key threat to cross-strait ties and regional security."

By Agence France Presse

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Taiwan Says Scrapping "One China" Doctrine

TAIPEI, Jul 12, 1999 -- (Reuters) Taiwan said on Monday it would scrap the "one China" doctrine that has been the basis for wary talks with communist China, saying Beijing's interpretation of the concept left no room for productive relations.

Mainland Affairs Council chairman Su Chi, affirming an explosive policy floated on Saturday by President Lee Teng-hui, said the Republic of China, Taiwan's government, now would regard ties with Beijing as "special relations" between two Chinese states that some day may unite as a single Chinese nation. "This new definition reflects our disappointment over the Chinese communists' one China principle," Su said. "We think the current abnormal relationship across the (Taiwan) strait is the result of the Chinese communists refusing to face reality."

Since the early 1990s, Taipei and Beijing have engaged in wary semi-official negotiations with the understanding that they were both "political entities" under a single China. While Beijing has flatly rejected the legitimacy of the exiled Republic of China, Taipei has acknowledged that the mainland is under the rule of the communist People's Republic of China.

Taipei's open abandonment of the concept of a single divided China already has outraged Beijing, which has denounced Lee's move as a dangerous flirtation with formal independence -- something the mainland vows to thwart by force.

Su explained that the shift did not reflect a change in Taiwan's policy of espousing eventual union with a democratic China, and said it was necessary because the old formula was being exploited by Beijing to undermine the legitimacy of the Nationalist-led Republic of China.

"We have shown our goodwill by calling ourselves a political entity under a one-China policy, but the Chinese communists have used this policy to squeeze us internationally. We feel there is no need to continue using the one-China term," Su said.

By Reuters

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Chinese University Expels Student For Commemorating Tiananmen Crackdown

BEIJING, Jul 12, 1999 -- (Agence France Presse) A university in the eastern Chinese province of Zhejiang has expelled a student for putting up posters and wearing a white flower to commemorate the bloody 1989 crackdown on pro-democracy protestors in Tiananmen Square, a Hong Kong-based rights group said.

Fang Xiaohuang, a second-year law student at the Ningbo University, was expelled Friday, the Information Center for Human Rights and Democratic Movement in China said in a statement.

University officials contacted by AFP refused to comment on Fang's case.

Around the time the school authorities were organizing anti-US protests in the wake of NATO's bombing of the Chinese embassy in Belgrade, Fang put up a poster alongside the others slamming US hegemonism.

"If we are going to protest on the part of the running dogs, who is going to protest for those who were slaughtered among our own people?" the Information Center quoted the poster as saying.

Most people on campus recognized that "running dogs" applied to Yugoslavia, and that those who were slaughtered were the protesters on Tiananmen Square in 1989.

Fang, who had previously been warned for collecting 30 signatures calling for the release of opposition China Democracy Party (CDP) founder Wang Youcai, also wore a white flower of mourning on the 10th anniversary of the massacre, it said.

Fang, herself a CDP activist, was one of those detained for questioning when Wang was taken from his home in the eastern city of Hangzhou last autumn. She was released shortly afterwards.

Wang was jailed for 11 years by a Hangzhou court soon after for "attempting to subvert state power." Shortly afterwards, two other prominent dissidents and opposition party members, Qin Yongmin and Xu Wenli, were handed sentences of 12 and 13 years on similar charges.

By Agence France Presse

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Report: Taiwan Cracking Down On 4,000 Illegal Chinese Immigrants

TAIPEI, Jul 12, 1999 -- (Agence France Presse) Taiwan is stepping up its search for some 4,000 illegal Chinese immigrants here, with intelligence officials warning they could spy on the island's military set-ups, it was reported Sunday.

Intelligence units were alerted by findings that some illegal immigrants were Chinese Communist party members and security officials, the Central Daily News said.

"They may not pose immediate threat to the island's security, but the data they gather here could be used against Taiwan once conflicts emerge," the paper quoted intelligence sources as saying.

Taipei and Beijing are still technically at war despite the commencement of civil contacts in the late 1980s, and Beijing has threatened to invade the island should it declare formal independence.

More than 1,000 illegal Chinese immigrants have been arrested here over the past three years.

The paper said the opening of civil contacts had also allowed Beijing more access to spy on Taiwan which it has regarded as a breakaway province since the end of civil war in 1949.

By Agence France Presse

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Obuchi Wins Chinese, Mongolian Support Against North Korean Missile Test

ULAN BATOR, Jul 11, 1999 -- (Agence France Presse) Japanese Prime Minister Keizo Obuchi wound up his landmark tour of China and Mongolia Sunday after securing promises from both countries they would pressure North Korea to give up a suspected planned missile launch.

The Japanese premier left Ulan Bator Sunday afternoon to end the four-day trip to China and Mongolia, which both maintain close ties with the Stalinist North Korea.

Speculation has been growing that another North Korean missile launch is imminent, after a shock one last August which over flew Japan. Pyongyang said the missile put a satellite into orbit, but Tokyo saw the launch as a weapons test.

"Japan's deep concern about North Korea's missile launch is not measurable," Obuchi told a news conference after meetings in Beijing with Chinese President Jiang Zemin, Premier Zhu Rongji and parliamentary head Li Peng.

"It is important to discourage North Korea from launching a missile again," the Japanese premier said.

"If China has a chance, I would like to tell North Korea about our concern."

Despite its close ties with North Korea, China gave unexpectedly strong support to the Japanese request.

"China has been making an effort to keep peace and stability on the Korean peninsula, and will do whatever it can do," Zhu said during his meeting with Obuchi.

"No country should act against peace and stability in the Korean Peninsula."

Li separately told Obuchi: "If I have a chance, I will tell North Korea about Japan's stance."

Mongolia, whose communist regime ended in 1990, expressed even stronger commitment.

"In order to help prevent a missile launch, we are ready to hold dialogue with North Korea," Prime Minister Janlavin Narantsatsralt told Obuchi.

Perhaps mindful of the need to win support from his hosts, Obuchi brought with him important promises of financial aid.

On Saturday he said Japan would step up financial support for Mongolia, which already receives most of its foreign aid from Tokyo, and pledged 16 billion yen (131.1 million dollars) over the next year.

The Japanese premier also promised to provide some 10 billion yen to support a major reforestation project in China, which has been badly hit by floods blamed partly on rampant logging.

Obuchi's campaign against a North Korean missile test began in mid-June at this year's summit of the Group of Eight powers.

Obuchi urged the seven other major nations -- Britain, Canada, France, Germany, Italy, Russia and the United States -- to jointly oppose any repeat of last August's test by North Korea.

He warned Japanese assistance to NATO on the Kosovo crisis was insurance in case Tokyo needed Western support in future emergencies in Asia, with the unpredictable North Korea providing a perennial threat.

Obuchi's tour of China and Mongolia was also marked by a less hostile reception from his hosts over Japan's wartime conduct, which saw it invade both countries.

Last November, when Jiang made a historic visit to Japan, the Chinese side was frustrated Tokyo failed to offer a full, written apology for Japanese atrocities before and during World War II.

But this time round Jiang said only: "I observed two roads Japan has been walking on. I would like Japan to continue walking on a road of peace."

Another achievement for Obuchi was an accord between Japan and China on a bilateral protocol for Beijing's entry into the World Trade Organisation.

With Friday's agreement, Japan became the first major industrialized nation to officially approve China's admission to the global trade body.

The Japanese premier, however, failed to wipe out Beijing's concern about upgraded military ties between Japan and the United States.

"The Japan-US security cooperation is the issue that China is and will be concerned about for the time being," Zhu told Obuchi. "I would like Japan to show results with its future acts."

China fears Japan and the United States might intervene in any crisis over Taiwan, which it regards as a rebel province.

By Agence France Presse

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The Restaurant Where South And North Koreans Meet

YANJI, China, Jul 11, 1999 -- (Agence France Presse) Wearing a red jacket, black stockings and high heels, a North Korean waitress takes orders from a group of South Koreans, smiling at her country's enemies as she describes the dishes on the menu.

But ignoring the culinary descriptions, the South Korean businessmen are instead mesmerized by the red badge pinned on her jacket which bears the beaming face of Pyongyang's deified former leader Kim Il-Sung.

Formally at war for nearly half a century, ordinary citizens of South and North Korea seldom get to meet each other, and certainly not in so social an atmosphere.

Selected government officials from both sides meet in the border truce village of Panmunjom, between the two Koreas, and vice ministers meet occasionally for talks in Beijing or Geneva.

But this bustling restaurant in eastern China, 28 kilometers (17 miles) from North Korea's border, provides a rare forum for the two peoples -- demonized for decades by each others' propaganda machines -- to get to know each other.

The waitress takes the men's orders and skips off before reappearing with a banquet of North Korean food and drink, an ironic twist from a country where millions are suffering from famine.

"Won't you sing us a song?" one of the businessmen at the table asks. She smiles, and makes her way over to one side of the room where there is a microphone, a turntable and an amplifier.

She belts out a popular North Korean song called "Welcome" to the applause of the customers at Mulan Peak restaurant in Yanji, a town of 800,000 people, more than 40 percent of them are ethnic Koreans.

Her stilted but fervent rendition and gestures galvanise the mostly South Korean audience, whose experience of such performances is limited to the odd North Korean television broadcast retransmitted in the South.

The world of difference between people from either side of the world's last Cold War frontier has been brought sharply home to the South Koreans.

While the first ever tourist links between the two countries were forged last year with the launch of cruise tours to the North, the tightly controlled itinerary is designed to avoid accidental meetings between North and South Koreans.

When they do get talking in such an atmosphere, the results can be catastrophic.

Last month a South Korean housewife was detained and interrogated for six days by North Korean authorities after telling a government nature warden that North Korean defectors were prospering in the South.

But in the Mulan Peak, South Koreans can talk freely to the North Korean staff, who have crossed over from the North in the hope of earning enough money to help their families eat.

"Are you married?" a South Korean man says, flirting with a North Korean waitress in her early 20s.

"No," she answers easily. "I want to get married to a South Korean." Surprised, the man asks: "Why a South Korean? Aren't there any North Korean men?"

She smiles. "Of course there are, but the reunification of Korea will come one day and so I will wait for a South Korean."

But the mood suddenly changes when a South Korean guest asks an indiscreet political question about the North Korean famine.

The smile of the waitress, who had seconds earlier been chatting freely about her family and life in the North, freezes before she turns her back and walks away.

"They are very professional and everybody here believes they are North Korean agents," said a local ethnic-Korean businessman called Kim, adding that the women were after any information from visiting South Koreans.

The waitress meanwhile climbs back onto the stage and sings another song, called "Our wish is reunification." The well-known song is often sung on both sides of the border, providing one of the only sentiments bringing together the Stalinist North and capitalist South.

By Agence France Presse

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China Parliament Blasts U.S. Congress On Taiwan

BEIJING, Jul 8, 1999 -- (Reuters) China's parliament condemned moves by U.S. congressmen to beef up the defense of Beijing's diplomatic rival Taiwan, saying it could weaken ties with Washington further, official media said on Thursday.

A spokesman for China's lawmaking National People's Congress (NPC) said a proposed U.S. law advocating increased arms sales to Taiwan would "add frost on top of snow" to stormy Sino-U.S. relations, Xinhua news agency reported.

U.S. Senate Foreign Relations Chairman Jesse Helms offered legislation in March authorizing the sale of a broad range of weapons to Taiwan, including missile defense systems and advanced air-to-air missiles.

The Senate also passed an amendment to a defense appropriations bill last month requiring the Department of Defense to submit a report on the military balance in the Taiwan Strait.

"The perverse moves of some U.S. legislators constitute a grave provocation to Chinese sovereignty and gross interference in China's internal affairs," the NPC spokesman was quoted as saying.

The U.S. government and Congress were obligated to "faithfully carry out their promise to support the 'one China' policy", he said.

"Practice proves that whenever these principles are observed, Sino-U.S. relations grow smoothly," he said.

China views Taipei's government as the illegitimate ruler of a breakaway province and reserves the right to retake the island by force if Taiwan declares independence.

Ties between Washington and Beijing have turned frosty since NATO bombs hit China's embassy in Belgrade in May and killed three journalists.

Tens of thousands of demonstrators marched in front of U.S. diplomatic missions in China to protest against what official media called a deliberate attack.

China has rejected a U.S. explanation that the bombing was the result of faulty intelligence.

By Reuters

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China Tells Papua New Guinea To 'Correct' Decision To Recognize Taiwan

BEIJING, Jul 8, 1999 -- (Agence France Presse) China on Thursday said it had strongly protested to Papua New Guinea over its decision to switch diplomatic recognition to Taiwan and urged it to "correct" its move.

"China hopes the Papua New Guinean government will immediately correct its erroneous decision of establishing 'diplomatic ties' with Taiwan so as to bring the relations between China and PNG back onto the normal track," foreign ministry spokeswoman Zhang Qiyue told a news conference.

"China has made solemn representations to and lodged a strong protest against the Papua New Guinean government over its signing of the so-called communiqué on the establishment of diplomatic ties with Taiwan," Zhang said.

"The aforementioned actions by a handful of people in the PNG government have met strong opposition from far-sighted persons within and outside the PNG government, the PNG people and media," Zhang said.

PNG Foreign Minister Roy Yaki and Prime Minister Bill Skate secretly flew to Taiwan on Saturday, defying neighboring Australia which advised the country not to anger China by swapping diplomatic recognition in exchange for badly needed financial assistance.

The besieged Skate, who had been facing defeat in a no-confidence vote within a fortnight, announced Wednesday he had resigned to restore political stability to PNG but denied the move was linked to the Taiwan issue.

By Agence France Presse

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China Slams US Congress Resolution On World Tibet Day

BEIJING, Jul 8, 1999 -- (Agence France Presse) China reacted angrily Thursday to a US House of Representatives resolution supporting human rights in Tibet, warning those responsible against "undermining" Sino-US relations.

"A few members of the US congress have proposed, regardless of the facts, a resolution on the so-called establishment of World Tibetan Day...China expresses our firm opposition and strong dissatisfaction over this," Foreign Ministry spokeswoman Zhang Qiyue said.

"Tibet is an integral part of Chinese territory and no foreign countries have the right to interfere," she told the weekly news briefing.

"We urge the US government to oppose the resolution and urge a small number of congressmen to stop doing things which will undermine Sino-US relations."

Democratic Representative Jesse Jackson Jr. was expected to introduce to the House Thursday a measure backing World Tibet Day on July 10, a worldwide event to recognize the basic rights of the Tibetan people to religious, cultural and political freedoms.

According to a copy of the resolution, the bill has harsh words for China, which it says "has committed 'acts of genocide' ... and is currently committing systematic human rights violations" in Tibet.

China seized full control of the region after an abortive anti-Communist uprising in March 1959.

In the aftermath, the Tibetan spiritual leader the Dalai Lama fled to India and set up a government-in-exile in the northern Indian city of Dharamsala.

By Agence France Presse

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Chinese President To Visit Mongolia From July 15 To 17

BEIJING, Jul 7, 1999 -- (Agence France Presse) Chinese President Jiang Zemin will pay a state visit to Mongolia from July 15 to 17, the foreign ministry announced here Tuesday.

Jiang's visit would be an "important trip" and follows a visit to China by Mongolian President Natsagiin Bagabandi at the end of last year, foreign ministry spokeswoman Zhang Qiyue told a news briefing.

Bagabandi's trip last December was the first Mongolian state visit to China, as the two neighbors tried to move beyond their long-standing mutual suspicion.

"The visit at this time is of great significance for the two countries to....usher in the future in terms of bilateral relations," Zhang said.

This year will mark the 50th anniversary of Sino-Mongolian diplomatic ties and the fifth anniversary of the signing of the China-Mongolia Treaty on Friendly Relations and Cooperation, the official Xinhua news agency said.

During a summit meeting in December, the two presidents signed documents on relations into the 21st century, on cultural and scientific cooperation and on Chinese aid to Mongolia.

By Agence France Presse

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Beijing: No Improvement In Us-China Ties

BEIJING, Jul 7, 1999 -- (Agence France Presse) Relations between Beijing and Washington, strained by NATO's bombing of the Chinese embassy in Belgrade, have not improved recently, China said Tuesday.

"There has been no change in Sino-US relations since last Thursday," foreign ministry spokeswoman Zhang Qiyue told a regular news briefing.

"As for the issue of compensation, China and the US have had discussions through diplomatic channels," she said in reply to a question on when China would restart bilateral talks with the US on China's entry into the World Trade Organization.

The NATO air strikes on the Chinese embassy in early May killed three Chinese journalists and injured 20 others, sparking nationwide anti-US and anti-NATO protests.

The US sent a special envoy last month to explain to Chinese leaders how the bombing, which it has said was a mistake, happened.

China has rejected the explanation as "unsatisfactory" and put on hold talks on its WTO entry, as well as military cooperation with the US.

China has also demanded the US government take "full responsibility" for compensation for the incident without specifying how much compensation should be made.

By Agence France Presse

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North Korean Missiles On The Agenda For Japan-China Talks

TOKYO, Jul 6, 1999 -- (Agence France Presse) North Korea's missile development program will be on the agenda for talks between Japanese and Chinese leaders this week, Foreign Minister Masahiko Komura said Tuesday.

Prime Minister Keizo Obuchi leaves for Beijing Thursday to hold talks with President Jiang Zemin, Premier Zhu Rongji and parliamentary head Li Peng.

"When President Jiang visited Japan last year, we confirmed our serious concern about peace and stability in the Korean peninsula and we agreed to cooperate in the issue," Komura, who will accompany Obuchi, told reporters.

Jiang visited Japan in November last year.

North Korea shocked Tokyo last August by firing a rocket over Japan into the Pacific. It said the missile put a satellite into orbit but Japan saw the launch as a weapons test.

Asked whether the planned talks will cover the North's suspected plans for a future missile launch, Komura said: "It is a matter of course that the two sides are to hold talks for the purpose of peace and stability in the Korean peninsula."

During his trip Obuchi is likely to ask Chinese leaders to help dissuade North Korea from test-launching another missile, analysts said. China is a key ally of North Korea.

Japan raised concerns about a North Korean military threat following reports that the reclusive Stalinist nation was preparing to test-fire a ballistic missile this month or August.

Former UN undersecretary Yasushi Akashi, quoting North Korean officials, said during the weekend that Pyongyang "has already completed the preparation" for the launch of what it called a satellite.

By Agence France Presse

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U.S. Says Hong Kong Enjoys Surprising Autonomy

WASHINGTON, Jul 2, 1999 -- (Reuters) Hong Kong retains a surprising degree of autonomy two years after its return to Chinese control, and its chief difficulties have been economic rather than political, a U.S. official said on Thursday.

Freedom of speech, assembly and the press continue in the former British colony under China's "one country, two systems" policy, said Stanley Roth, assistant secretary of state for East Asian and Pacific affairs.

"Hong Kong has remained largely autonomous, open and observant of the rule of law -- far more so than any had anticipated," Roth told a Senate Foreign Relations subcommittee on the second anniversary of Hong Kong's handover to China from Britain.

"Surprisingly, the difficulties that Hong Kong has encountered since the handover have been not political but economic," he said.

Britain ended 150 years of colonial rule of Hong Kong in July 1997 under an agreement granting the territory 50 years of autonomy and independence for its British-based legal system.

That autonomy was called into question, however, by China's repeal last month of a landmark immigration ruling by Hong Kong's highest court.

Roth said the United States had expressed concern to Beijing over China's repeal of the ruling, which would have given all children of permanent Hong Kong residents the right to live in the territory.

That sparked fears that up to 1.6 million new migrants could flock to the already overcrowded Special Administrative Region, threatening living standards and a struggling economy.

The standing committee of China's National People's Congress overturned the ruling, raising questions about the autonomy of Hong Kong's judicial system.

Roth said it was too early to tell if the ruling had set a lasting precedent for the Chinese government that could threaten Hong Kong's autonomy. "We made our concerns known publicly and privately that this is a precedent we would not like seen continued," he said.

Roth said Hong Kong's economy was recovering from the Asian financial crisis. Hong Kong property values dropped as much as 65 percent in 1998.

Unemployment, at 6.3 percent, has grown to the highest level in 30 years. But after freezing government land sales to stabilize land prices, Hong Kong is experiencing an economic rebound.

"It is safe to say the worst of the economic crisis is over," Roth said.

By Reuters

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US Ambassador To China Leaves On Note Of Optimism Despite NATO Bombing

BEIJING, Jul 2, 1999 -- (Agence France Presse) US Ambassador to China James Sasser ended his tour in China on a optimistic note, despite the bitter strain on Sino-US relations caused by the accidental NATO bombing of the Chinese embassy in Yugoslavia.

Sasser, who left Beijing Thursday, told CNN the May 7 bombing had greatly angered the Chinese people and harmed US-Chinese relations.

But he remained optimistic in the interview broadcast here Friday that bilateral ties would improve over the coming months.

"I think the relationship has been damaged, no question of that, but I think we've built some strong structures that improve this relationship on so many levels over the last three and a half years," Sasser said.

"Now both presidents know each other, they like each other and respect each other. So I think we've laid a foundation here for a quick recovery," he said.

Sasser continued to advocate "comprehensive engagement" with China despite Beijing's refusal to accept the US position that the bombing was a mistake and as anti-Chinese sentiment in Washington grew over Beijing's alleged theft of US nuclear secrets.

"To those who attack the policy of engagement on China, I ask them what is the substitute, if they want to engage in a policy of containment, they couldn't do it," he said.

"No other country in the world would join the US in trying to contain China," he said.

Retired US Admiral Joseph Preuher is expected to replace Sasser, but his appointment is not expected to come for several months.

Sasser's biggest achievement during his posting was to help organize the reciprocal summits between Presidents Bill Clinton and Jiang Zemin in 1997 and 1998.

He continually championed China's ongoing reform and economic liberalization and as a former member of the US Senate, worked with American businesses to lobby Washington for continual engagement with the communist giant.

Before leaving Beijing, Sasser dined with President Jiang, Premier Zhu Rongji and parliamentary head Li Peng, US embassy officials said.

The Chinese leaders indicated their hopes for improved bilateral relations, but said the fall out from the embassy bombing would take time to overcome.

"I think China now has at the very top a world class leadership, they are sophisticated, they understand the world, but they also have great internal political pressures operating on them," Sasser said.

The former senator from Tennessee was posted to China in mid-1995 as Beijing was fuming over a private visit by Taiwan President Lee Teng-hui to his alma mater Cornell University.

The visit was viewed by China as official US recognition of Taiwan and resulted in the US sending its seventh fleet to the Taiwan Straits in summer 1996 to watch China test launch ballistic missiles in the seas around the renegade province.

By Agence France Presse

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DEFUSING KASHMIR
To restore peace, China and the U.S. need to exert their influence

AFTER KOSOVO'S KILLING FIELDS, will two other K's erupt in more than just well-contained skirmishes? For the past month, hundreds of heavily armed Muslim guerrillas have been battling Indian troops and planes on snow-capped mountains in Kargil, a remote district in the Indian-administered part of Kashmir. New Delhi says the infiltrators are led by Pakistani soldiers, a charge denied by Islamabad but recently given credence by senior U.S. officials. Then, on June 15, off the coast of Korea, Asia's other flashpoint where armies glare at each other across a tense border, naval vessels from either side of the 38th Parallel clashed for the first time in at least a decade. A North Korean torpedo boat was sunk, and many wondered whether the South's "sunshine" policy of enhancing contacts would survive.

Kashmir is the more serious confrontation, with the belligerents having fought three wars and now possessing proven nuclear punch. As of June 22, both Pakistan and India were still talking tough and refusing to budge, and the latter continued its assault on the Kargil fighters while resisting the temptation to escalate hostilities by crossing the Line of Control (LOC) dividing rival halves of Kashmir. Foreign minister-level talks between the two sides on June 12 failed to resolve the crisis, and New Delhi has ruled out further dialogue until the intruders leave or are pushed back. The armies of both nations have gone into a state of heightened alert.

Mountains are known to favor defenders and the Indian army may be forced to cross the LOC in an attempt to encircle the infiltrators and cut off their supply routes. Another option involves opening up fronts on the plains farther south, where India's superior armor has enabled it to win the last two wars it fought with Pakistan (the first ended in a ceasefire). Either of these two actions would draw Pakistan into a wider war.

On June 19 in Germany, leaders of the Group of Eight nations said they are "strongly concerned" about the fighting in Kashmir and called for the immediate restoration of the LOC. Five days earlier, U.S. President Bill Clinton urged Pakistan PM Nawaz Sharif to pull back the Pakistan-backed forces from Kashmir. Clinton, said White House spokesman P.J. Crowley, "indicated that he did not see how progress could be made on this issue until those forces are withdrawn."

That is precisely New Delhi's view. It is the first time that the LOC has been violated in the 27 years since the 1972 Simla Agreement which commits the contending armies to respect the de-facto border. But a day after the G-8 leaders expressed their worries, Pakistan leader Sharif threatened: "If the Kashmir issue is not resolved once and for all, many more Kargil-like issues can crop up." Plainly, more points of confrontation is the last thing Pakistan and India need now - unless they want to risk another war, complete with the world's first nuclear exchange.

There are indications that the Pakistan army may have kept the PM in the dark about the scale of the operations in Kargil and its likely consequences. He may think a climbdown at this stage could not only prove politically costly but also damage his relations with the military. But Sharif still has an "escape" route. Having always denied army involvement in the Kargil intrusion, Pakistan could conceivably pull back without admitting defeat. A retreat from the mountains could be done in a matter of hours.

Many are worried that the Pakistan military is acting on its own and unwilling to have the guerrillas give up the tactical advantage they have won in Kargil. This is where Washington could help by asking the Pentagon to use its influence with Islamabad's generals. Since Cold War days, when Pakistan was an intimate U.S. ally, a succession of American top brass have cultivated ties with counterparts in Islamabad - links that could now be used behind the scenes to effect a Kargil exit. In exchange, the U.S. can lend its voice to Pakistan's call for far more earnest efforts to negotiate a Kashmir solution with India - one way to relieve the domestic pressure on Islamabad to confront New Delhi militarily over the issue.

Also with a key role in resolving the conflict is China, a strategic partner of Pakistan's. Beijing can exert influence to restrain Pakistan and give its leaders a valuable lesson in dealing with border disputes. China has its own with India, over which one war was fought in 1962. Since then, however, New Delhi and Beijing have agreed to desist from hostilities and negotiate over their disputed land at some point in the future. That security headache set aside, both countries can devote more attention and resources to addressing social ills instead of trying to distract people from them with belligerent posturing.

North Korea, too, can take a leaf out of China's make-money-not-war policy and its mediating presence. Sadly, Pyongyang seems to have gained the impression that the best way to get funds, especially from the U.S. and Japan, is to create trouble. Washington, Tokyo and Beijing should now make it clear that that con game is over. The way to go, instead, is the continuing North-South talks in Beijing. To be sure, there will be much arrogance and political point-making ahead, with walkouts, threats and snubbing. So it would be between India and Pakistan. But better to hear the cacophony of angry voices than the thunder of guns and bombs.

From Asiaweek

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FIST IN A VELVET GLOVE
The U.S. is upping the military ante in Northeast Asia

by John Feffer

AFTER NEARLY FIVE DECADES of feuding, the United States and North Korea seem ready to smile and shake hands. The U.S. government recently announced an additional 400,000 tons of food aid, a private-public project has sent 1,000 tons of seed potatoes to North Korea, and Pyongyang has allowed U.S. officials to nose around a suspected underground nuclear facility. The militaries of the two countries are cooperating to locate U.S. soldiers missing in action from the Korean War. And William Perry, adviser to President Clinton on North Korea policy, recently returned from Pyongyang where he discussed the first steps toward normalizing relations.

Even the latest battle between the Koreas in the Yellow Sea doesn't seem to have diminished the new U.S. commitment to engagement. But appearances can be deceiving. The U.S. and North Korea, in fact, remain deeply and dangerously suspicious of one another. Worried about U.S. military actions elsewhere, North Korea is not about to unilaterally give away its deterrent capacity. And the U.S., although generous on the food front, is beefing up security in Northeast Asia as if war were just around the corner. U.S. policy on North Korea is like a fist in a velvet glove.

This fist has several fingers. The U.S. is pushing Japan to abandon more than 50 years of pacifism. Japan's Constitution, in its famous Article Nine, renounces war and the threat or use of force to settle international disputes. According to the new U.S.-Japan Security Guidelines, Japan will provide logistical support for U.S. military operations, helping it wage war practically anywhere in the Asia-Pacific region.

Even before the Diet passed these new guidelines, Japan's Self-Defense Forces were flexing their muscles. In March, the SDF had its first purely military operation when it chased and fired on two suspected North Korean boats in Japan's waters. This, at least, was a defensive act. Some Japanese politicians argue that their country needs a first-strike capability to pre-empt attacks. Japan's defense is starting to become quite offensive.

This move away from pacifism will have enormous impact on a country that has neither fully grappled with its wartime conduct nor apologized to the satisfaction of its victims. The impact on Japan's neighbors will be even greater. A Japan unhooked from its Peace Constitution, with the capability of quickly creating an offensive force complete with weapons of mass destruction, is a nightmare for the two Koreas and China. The U.S. is trying to build cooperation on security issues between its allies, but the new guidelines will accomplish just the opposite.

Another finger of the U.S. fist is a missile shield. In part to reassure Japan's neighbors, the U.S. is pushing a "defensive" system that can substitute for an offensively structured Japanese military. The U.S. touts the theater missile defense (TMD) program as an umbrella to protect Japan, South Korea, and Taiwan from North Korean or Chinese attacks. TMD faces many problems. No one has proven that its centerpiece, a high-altitude mini-Star Wars, can work. Moreover, a "shield" encourages the building of weapons to pierce it. Since it is designed to intercept high-flying missiles, TMD won't protect South Korea from the North's army, artillery, and airplanes - so Seoul has wisely said it won't take part. There is also no reason Japan can't pursue an offensive capability and participate in TMD. Finally, Beijing is incensed at the possible inclusion of Taiwan and interprets TMD and the U.S.-Japan guidelines as attempts to deter not a weak North Korea but a strong China.

Japanese support for a more aggressive military posture increased last August after North Korea launched a rocket that passed over Japan. Rather than an indication of a genuine North Korean threat, this launch was merely the excuse that U.S. and Japanese politicians needed to swing the Japanese public (at least temporarily) away from pacifism. North Korea, afflicted by famine and the collapse of its economy, poses far less threat to Japan than the old Soviet Union. If Japan could keep its Peace Constitution for the entire Cold War, surely it can hold fast to these principles in the face of a weaker adversary.

Other fingers in the fist include the array of U.S. personnel and firepower in the region, continuing U.S.-South Korean military maneuvers, and the increase - despite its economic crisis - of Seoul's military spending. Pyongyang is frequently dismissed as paranoid. But in the face of such a display of U.S. power - in Asia as well as the Balkans and Iraq - its "paranoia" seems more like common sense. North Korea's development of a long-range missile capacity is largely an attempt to prevent the U.S. doing to Pyongyang what it did to Belgrade and Baghdad.

While the U.S. decision to woo North Korea with food aid is laudable, its military build-up in Asia threatens to drive wedges into an already divided region. A true policy of engagement would address the underlying reasons for North Korea's insecurity. To do that, the U.S. must stop upping the military ante. It must respect Japanese pacifism and stop throwing billions of dollars into faulty missile defense umbrellas. The U.S. and its allies must approach North Korea with hands outstretched. And fists unclenched.

JOHN FEFFER works on Korean issues for the American Friends Service Committee, an international Quaker organization. He is based in Tokyo

From Asiaweek

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Copyright DateRichard R. Wertz