Will Taiwan Blink At China Threat?

As Taiwan launched its presidential campaign, mainland China sounded a grim warning: stop delaying the unification talks and stop U.S. arms purchases or face the threat of invasion.

Responding to new Chinese threats that Taiwanese foot-dragging on unification could lead to war, Taiwan urged China Tuesday not to get bogged down in old disputes and to be more flexible in solving differences between the two sides.

The statement came a day after China issued a policy paper on Taiwan containing the threats. The paper caused panic in Taiwan's jittery stock market, which closed sharply lower, dragging down other Asian markets.

Until now, reports CBS News Correspondent Bruce Dunning, Beijing has threatened military action only if Taiwan announced its independence.

It was the first time Chinese leaders in Beijing threatened war if Taiwan puts off unification talks indefinitely. All the presidential candidates vowed that Taiwan will not be intimidated.

During Tuesday's news conference in Taipei, which lasted only a few minutes, Taiwanese official Lin Chong-pin said tensions would not ease as long as Beijing refuses to acknowledge that China is split and each side is controlled by a separate government. Taiwanese leaders have said the island will rejoin the mainland once China becomes more democratic and economically advanced.

"Communist China's continual denial of the existence of the Republic of China is going to create more trouble for the two sides and make the relations more tense," Lin said, referring to Taiwan by its official name.

Beijing and Taipei should return to their flexible 1992 consensus in which they acknowledge the existence of "one China" but are each free to have a different view of what that China is, said Lin, vice chairman of the Mainland Affairs Council, which handles Taiwan's China policy.

In Beijing, Chinese Foreign Ministry spokesman Zhu Bangzao followed up Monday's policy paper with a statement saying that unification was an urgent matter that "cannot be dragged on indefinitely."

China released its 11,000-word paper at a sensitive time, weeks before Taiwan's second direct presidential election. Beijing tried to influence the first vote in 1996 by testing missiles near Taiwan, prompting the United States to send warships to the region to ease tensions.

Taiwanese have feared Beijing would try to interfere in the March 18 election, and Monday's policy paper was China's first obvious effort to influence the campaign.

Chao Chun-shan, a professor at National Chengchi University in Taipei, said Beijing's policy paper was a disappointment. Presidential candidates have thought hard about new ways to improve relations with China, and Beijing responded by repeating its old line with a new threat, Chao said.

"The presidential candidates have to feel disappointed and the voters have to feel disappointed," he said.

So far, the presidental campaign has inspired much creative thinking from the candidates, who want to convince voters that their innovative policies could bring a breakthrough with China. But none of the top presidential hopefuls agrees to Beijing's unification terms.