In a bitter struggle between the ruling and opposition parties, the Legislative Yuan passed a referendum law based on a Kuomintang (KMT) and People First Party (PFP) draft on November 27, 2003. In addition to prohibiting referendums on the budget, taxes, investment, salaries and personnel issues, the bill prohibited the citizenry from using a referendum to rewrite the constitution and prohibited government organs from initiating "advisory referendums." It also stipulated that the number of people initiating a referendum must equal 0.5% of the number of people who voted in the previous presidential election, and the number of signatories must equal 5% of that number. At the same time it set up a "referendum supervisory commission" to review proposed topics for referendums.

Because of these and many other restrictions, the ruling Democratic Progressive Party called this bill a watered-down prescription for "non-referendum referendums" and sought to get out of the bind by pushing for a reconsideration, but the move was unsuccessful owing to the parliamentary majority of the opposition camp.

At the same time President Chen announced on November 30 that he would hold a referendum on March 20, 2004, at the time of the presidential election, exercising the prerogatives of his office. He was able to do this because the referendum law stipulates that when the country is under an external threat that causes concern about a change in national sovereignty, the president may, via a determination by the cabinet, initiate a public referendum on the topic of national security. This is the so-called "defensive" or "preventive" referendum. In this case, the decision was based on intelligence information that the PRC had deployed 496 ballistic missiles along the southeast coast of China and that as a consequence Taiwan's national security was under external threat. The announcement sparked intense domestic debate as well as serious international attention.

During his interview with The New York Times, President Chen said the provisional topic of the referendum is the "demand that China immediately withdraw the missiles targeting Taiwan and openly renounce the use force against Taiwan." The referendum did not involve the issue of unification or independence, nor did it violate the "five noes" pledge made during the President's inaugural speech in 2000. It rather represented the deepening of Taiwan's democracy and a guarantee of peace. Many countries around the world have conducted nationwide referendums, and the Taiwan people should enjoy and not be deprived of the same right.

President Chen further emphasized that the reason for holding the first referendum in Taiwan's history was that many citizens lacked a sense of crisis and were totally oblivious to the growing missile threat emanating from the Chinese mainland. Consequently it was necessary to utilize a preventive referendum to consolidate the people's mental fortitude and unite them.

In addition, not eliminating the military threat against Taiwan posed by China not only endangers Taiwan, but also the Asia-Pacific region and even the world at large. In view of this situation, the global community should not sit idly by but should squarely face the fact that China represents a major threat to world peace. It should also carefully listen to the true voice of Taiwan's 23 million people who "want democracy, want peace, and are against missiles and against war."

Although President Chen has stated that the referendum does not affect the debate over unification and independence, there is no denying that the issue of the referendum has introduced a variable into the Taiwan-US-China relationship. Chinese premier Wen Jiabao visited the US after the referendum announcement was made, and during his talks with US president George W. Bush the latter expressed concern that this action could "unilaterally change the status quo in Taiwan." At the same time President Bush very clearly indicated that if China used military force against Taiwan the US would not remain indifferent.

In domestic reaction to the proposed referendum, opposition presidential candidate Lien Chan raised the idea of "cross-strait arms control talks," hoping that China and Taiwan could substitute negotiations for conflict and confrontation. Some people in political circles are worried that the "strategic ambiguity" that has characterized Taiwan-US-China relations over the years will be undermined and a premature showdown forced as a result of sentiments expressed in a referendum. The rapid rise of mainland China in recent years has brought it international political and economic power that cannot be ignored. If the US leans toward the PRC, this may have unfortunate consequences for Taiwan.

With these misgivings in mind, President Chen gave an interview to the British Financial Times in mid-December in which he further explained that the referendum would not change the status of Taiwan, but on the contrary was a necessary measure to safeguard the continued development of Taiwan and its independent sovereignty. The Republic of China has all along been an important member of the international freedom and democracy camp and President Chen didn't believe the US would sacrifice Taiwan's interests to improve its relations with China. President Chen expressed the hope that the PRC authorities would respond with goodwill in a concrete way immediately, otherwise if China persists in military intimidation or provocative actions like missile testing, then the "five noes" pledge will cease to exist.

From the Referendum Law to a "defensive referendum," Taiwan's domestic and international position has become increasingly serious. How can Taiwan's voice be communicated to the rest of the world to achieve the promise of cross-strait security and world peace while getting the international community to reaffirm the concept of democratic values, freedom and human rights? This question is testing the wisdom of political leaders.