DATE=5/18/2000 TYPE=BACKGROUND REPORT TITLE=TAIWAN - CHINA NUMBER=5-46341 BYLINE=STEPHANIE MANN DATELINE=WASHINGTON CONTENT= VOICED AT: INTRO: On Saturday (5/20), Taiwan will inaugurate a new president, Chen Shui-bian, whose political party has advocated Taiwan's independence. Yet, China wants Mr. Chen to use his inaugural address to show he will work toward Taiwan's reunification with the mainland on Beijing's terms. Correspondent Stephanie Mann reports American China analysts disagree on the level of importance that should be attached to Mr. Chen's speech. TEXT: China has warned that Chen Shui-bian should use his presidential inaugural address to accept Beijing's one-China principle as the basis for resuming a dialogue across the Taiwan Strait. When the Communist Party came to power in Beijing in 1949, the Nationalists -- or Kuomintang -- government fled to Taiwan. For decades, both sides claimed to be the legitimate government of all China, and both sides advocated the eventual reunification of Taiwan and mainland China. But in the 1990's, Taiwan relinquished its claim to rule all of China and intensified its efforts to gain greater international recognition as a separate entity. Last year, Taiwan's outgoing president, Lee Teng-hui, called for the two sides to treat each other as equal sovereign states -- a declaration that prompted Beijing to suspend the cross-Strait dialogue. Chen Shui-bian's victory in the March election further alarmed Beijing, because his Democratic Progressive Party has said the people of Taiwan should be allowed to choose between independence or reunification. China has threatened to use force if Taiwan declares outright independence or delays talks on reunification. Ronald Montaperto, a China specialist at the Institute for National Strategic Studies in Washington, says Beijing sees Mr. Chen's inaugural address as an important indicator of his policy toward the mainland. /// MONTAPERTO ACT /// The inaugural address is really very, very important because it will contain some kind of formulation that will address the issue of where the Taiwan side stands on one-China and how they're willing to deal with it and how they're willing to interpret it. And I think that Beijing is really very hopeful that there will be some room in this for them to respond to. /// END ACT /// Mr. Montaperto says Mr. Chen may indicate an acceptance of the idea of one China, but not as a pre- condition to talks. He also says Mr. Chen will likely not put any emphasis on Lee Teng-hui's two-states theory. The director of the Asian Studies Center at the Heritage Foundation, Larry Wortzel, agrees Chen Shui- bian will try not to inflame the situation. /// WORTZEL ACT ONE /// The speech will be significant. I think you should look for a very balanced speech that does nothing to inflame. He has said at a Heritage Foundation video teleconference that he will not raise the issue of independence, that he will not raise the two-state theory in this thing, that he will not attempt to raise the idea of a referendum. So ... he's saying the right things. We'll just have to see what he does, but I think he will do the right things there. /// END ACT /// Former U-S Ambassador to Beijing and now a China expert at the American Enterprise Institute, James Lilley, says China is exaggerating the importance of Mr. Chen's speech. /// LILLEY ACT ONE /// Obviously, Beijing has made it very important. And the chorus of voices that Beijing influences have said it's very important. You're getting this from all over Southeast Asia and places like this, that China means business this time, and the military factor is real, and everything hangs on his inauguration speech. ... Look, this has been a long, long process between China and Taiwan. It goes back, way back into the (19)30s and (19)20s. You aren't going to change it with an inauguration speech. /// END ACT /// Mr. Lilley says Chen Shui-bian has a big problem because he has to say nothing that offends Beijing while, at the same time, reassuring his local constituency, which is suspicious of Beijing's motives. He says Beijing is not likely to be pleased no matter what Mr. Chen says in his speech. The analysts agree that in the coming year, Taiwan's new president must focus on domestic issues -- the economy, corruption, and especially legislative elections expected in late 2001. They say how he handles the cross-Strait issue and how China responds to his initiatives will have a big impact on whether Mr. Chen's Democratic Progressive Party is able to gain a majority in the legislature. The analysts expect Mr. Chen to try to make progress on the cross- Strait issue in the coming months. Ronald Montaperto and Larry Wortzel say there have been subtle signals from middle level officials on the mainland that China may be willing to go back to a 1992 agreement in which both sides accepted the idea of one China, but did not agree on the interpretation of that concept. Mr. Wortzel says there are glimmers of hope both sides are trying to move toward that position again, adding that could be a starting point for a resumption of the cross-Strait dialogue. Mr. Montaperto says many officials in Beijing now seem to understand that reunification in the near term is not possible, so their immediate goal instead is to end what they see as a trajectory toward Taiwan independence. James Lilley agrees there are signs of flexibility by some Beijing officials, but he also points to what he calls a backdrop of military maneuvering that does not help the situation. /// LILLEY ACT TWO /// You have a lot going on of military gong- banging, posturing. But you've got to be careful about this, because if you aren't, it could spin out of control, cause an incident, escalate into something. I don't think it will. I think it's part of the whole Chinese process, but it is a dangerous way to do business. /// END ACT /// Larry Wortzel says he thinks the Chinese army has been more restrained and balanced this year than in the past. In 1996, during Lee Teng-hui's election, the People's Liberation Army (P-L-A) launched missiles over the waters off Taiwan and held military exercises in the area. This year, Mr. Wortzel says the army has not held its usual spring military maneuvers near Taiwan. /// WORTZEL ACT TWO /// I fully expect that the P-L-A will run some exercises during the spring and before the summer, but thus far they have avoided trying to inflame the situation by running an exercise in the middle of the Strait and changing the tone of the political climate. /// END ACT /// Mr. Wortzel says he hopes that when the People's Liberation Army eventually holds its spring maneuvers, it will not be in a location that affects the political climate and will create a politically safe space to allow cross-Strait talks to resume. (Signed) NEB/SMN/JP 18-May-2000 11:35 AM EDT (18-May-2000 1535 UTC) NNNN Source: Voice of America .