President Lee emphasized that the ROC is an independent sovereign state, and absolutely not a local government, even if the PRC ignores this historical and legal reality, viewing Taiwan as a "renegade province." Ever since 1991 when the ROC amended its constitution, it has defined cross-strait relations as state-to-state relations or at least a special state-to-state relationship, rather than an internal relationship between a legitimate government and a renegade group, or between a central government and a local government. He also stressed that "one China" is only possible in the context of a future democratic unification, and does not exist right now.

ROC Mainland Affairs Council chairman Su Chi pointed out that President Lee was only clarifying the political and legal reality of PRC-Taiwan relations in response to a German journalist's observation that "the Beijing government views Taiwan as a renegade province." The "state-to-state" stance does not change the sovereignty over Taiwan that the ROC has held since 1949, nor does it deny the fact that the PRC governs mainland China. In fact, long before his "state-to-state" statement, President Lee has more than once in the last several years reiterated the ROC's independent sovereignty in interviews with such members of the media as the Asian Wall Street Journal, The Washington Post, and the The Times of London.

Even though it has long been a political and legal fact, as soon as Taiwan's "state-to-state" policy was explicitly stated, it incited a strong reaction from mainland China. In a telephone conversation with US President Bill Clinton, PRC President Jiang Zemin emphasized that Lee's statement was a serious challenge to the "one China" principle, exposing, alleged Jiang, Lee's intent to try to separate Taiwan from China. Jiang was also reported to have decided to suspend contacts between Taiwan's Straits Exchange Foundation and the mainland's Association for Relations Across the Taiwan Straits in the runup to Taiwan's presidential election next March. But according to PRC Foreign Ministry spokesman Zhang Qiyue, Wang Daohan's visit to Taiwan in the fall has not yet been canceled.

Due to the increased tension across the Taiwan Strait and incessant rumors of elevating levels of military alert, within five days Taiwan's stock market shed more than a thousand points. On July 16 alone it plummeted 506 points, with total market value shrinking by more than NT$1.5 trillion. To prop up the market, the Ministry of Finance forced four major government-related funds-the postal savings fund, labor pension fund, labor insurance fund and civil service pension fund-to buy stock.

With the tension escalating vis-a-vis mainland China, President Lee met with Daryl Johnson, the director-general of the American Institute in Taiwan (AIT), before Johnson returned to the US at the end of his term, explaining that Taiwan's mainland policy has not changed.

Nevertheless, US President Bill Clinton took the initiative to call Jiang Zemin on July 18, expressing that the USA's Taiwan policy and adherence to the "one China" principle have not changed. At the same time, State Department spokesman James Rubin announced that the visit of a Pentagon delegation to Taiwan would be postponed. AIT chairman Richard Bush arrived in Taipei on July 22, meeting with Foreign Affairs Minister Jason Hu, Mainland Affairs Council chairman Su Chi and Defense Minister Tang Fei. Bush reaffirmed that America's Taiwan policy had not changed. He also hoped to decrease the misunderstanding and tension across the strait.

Many scholars both in Taiwan and abroad think that Taiwan has discarded its protective umbrella against military aggression. Harry Harding, dean of George Washington University's Elliott School of International Affairs, said that Lee Teng-hui's theory of "state-to-state" relations requires further clarification; otherwise, it may be regarded by the US as troublemaking and by Beijing as provocation. More than 100 scholars from National Taiwan University and National Chengchi University signed a petition entitled "A Declaration to Our Fellow Countrymen," declaring that President Lee's theory of "state-to-state" relations has not been recognized by the international community and is not helpful to the expansion of Taiwan's diplomatic activities. They urged the government to abandon its "state-to-state" policy.

The Taiwan Independence Party and the New Party are both opposed to the "state-to-state" policy, albeit for totally different reasons. Taiwan Independence Party chairman Cheng Pang-chen holds that the "state-to-state" policy is nothing new; only when Taiwan becomes an independent nation will it be free of PRC control. New Party national committee convener Li Ching-hua believes that both the "thesis of seven regions" put forward by Lee earlier on and the current "state-to-state" policy are unhelpful to the sound development of PRC-Taiwan relations.

On the other hand, the Democratic Progressive Party (DPP) thinks that defining the China-Taiwan relationship as a "special state-to-state relationship" is a realistic and creative description, conducive to re-opening negotiations and talks. The Beijing government should not over-react or regard it as a provocation. DPP presidential candidate Chen Shui-bian claims that Lee Teng-hui's "state-to-state" policy echoes comments that Chen himself made in Washington in April, when he asserted, "Taiwan and China are two ethnic Chinese nations that do not belong to each other; the two countries should develop a special international relationship."

It has been speculated in the media that in making his "state-to-state" remarks, Lee not only aimed to assert that the ROC and PRC have equal status in advance of Wang Daohan's planned visit, but also to force every potential presidential candidate to be forthcoming with their own cross-strait policies. In this sense, the comments by Chen, a popular candidate for next year's presidential elections, are seen as a success for Lee's strategy. Also, some speculate, Lee has diverted the attention of voters from domestic issues to such political issues as cross-strait relations and national status.

In fact, many people support Lee Teng-hui's stance. According to a survey by the KMT's Sun Yat-sen Institution on Policy Research and Development, more than 60% of interviewees supported the definition of cross-strait relations as that between two countries, the ROC and the PRC. A survey by the National Opinion Survey Research Center, which was conducted at the request of the Chinese Association of Eurasian Studies (whose director is former Mainland Affairs Council chairman Chang King-yuh) also revealed that 73% of interviewees think that China-Taiwan relations are "a special state-to-state relationship"; 74% agree that the ROC and the PRC are two different countries; and 88% do not agree that Taiwan is a province of the PRC.

KMT Department of Mainland Operations director Chang Jung-kung thinks that Lee Teng-hui's positioning reflects the will of the vast majority of the Taiwanese people. The "special state-to-state relationship" is in actuality a new expression of an old fact. It depicts, not changes, the current situation.

ROC deputy secretary-general to the president Lin Pi-shao contends that the "state-to-state" policy is not aimed at Wang Daohan's upcoming visit or next year's presidential election; rather, it offers a clear definition of the two players across the Taiwan Strait. After presidential candidate James Soong characterized the enunciation of the "state-to-state" policy as "poorly thought out and impetuous," Ting Yuan-chao, deputy director-general of the Office of the President's Department of Public Affairs, noted in response to the many different interpretations surfacing inside and outside Taiwan that a few people had simplified Lee Teng-hui's entire statement to mean merely "two Chinas" and had ignored the crucial word "special."

Su Chi remarked that Beijing and Taipei have different definitions of "one China": Taipei's "one China" refers to a democratic, free and unified new China; therefore, it does not now exist. Further interpreting the "state-to-state" policy, he said that in anticipation of future talks with Beijing on issues of a highly political nature, Taiwan must stand on an equal level with mainland China, and must reject the PRC's "one country, two systems" policy; therefore, Taiwan has had to readjust the definition of the cross-strait relationship.

The "state-to-state" policy has caused the PRC to launch a series of verbal attacks and military threats against Taiwan. Nonetheless, the fact that Taiwan has independent sovereignty is also not to be ignored and requires repeated declaration to the international community. The tense atmosphere of this disagreement, and the international community's one-sided attitude of appeasement, make conspicuous the fact that the fundamental rights of the people of Taiwan are being repressed by their counterpart across the Taiwan Strait.

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Will Koo Chen-fu (left), director of Taiwan's Straits Exchange Foundation, be able to meet again with Wang Daohan, director of mainland China's Association for Relations Across the Taiwan Straits, this fall as scheduled? (photo by Huang Tien-chang)