On 27 November, Taiwanese lawmakers adopted a proposal that gave the island’s president the power to hold an independence referendum in case of “external attacks .. The election, called a "defensive referendum,'' would be held if the mainland tried to use force to make Taiwan agree to its demands to unify. The controversial provisions of the proposal such as referendums on changing the island's name, anthem, flag or constitution were however ignored. President Chen Shui-bian’s call for a defensive referendum was primarily aimed at bolstering his chances of reelection. Indeed, at the beginning of his campaign, he had proposed writing a new constitution by 2006 that would become effective in 2008. This was designed, no doubt, to discomfit Beijing in the year of the Olympic Games.
However, there are other equally valid reasons for Taiwan adopting this proposal besides electoral politics. For Taiwanese separatists, any sort of bonhomie between the mainland and the US threatens its chances of independent statehood. The Americans have, for example, become increasingly dependant on the Chinese to resolve to the North Korean impasse given the American preoccupations in Iraq and Afghanistan, and despite recent strains over economic issues between the US and China. The Taiwanese threw a spanner into the works by inviting PLA threats, and thus drawing attention to the close military ties between China and North Korea. Thus, Taiwan managed to cast a shadow over Wen Jiabao’s visit to the US this month.
All this was cleverly timed. While the opposition coalition led by the Guomindang (KMT) interpreted the new law as allowing the president to call a referendum if an attack from China was imminent, Chen decided it would be held anyway, along with the presidential elections next March. However, he did not clarify what issues would be put to vote in the referendum until the PLA made its belligerent noises. Chen, on 4 December, then delivered a coup de grâce, saying that the referendum would ask China to withdraw its ballistic missiles aimed at Taiwan and that it should renounce the use of force against the island – it would not be a call for independence. He even declared that the referendum would be cancelled if the mainland renounced the use of force. It is possible the Taiwanese were also being pressured by the Americans, for Chen’s DPP had already given out signals that independence would not be an issue for the referendum.
There were mixed reactions in Taiwan over the strong American response to a referendum on Taiwanese sovereignty. There was a genuine fear that the Taiwanese had overplayed their hand, and might have forced the Bush administration closer to Clinton’s policy of “three noes . On 3 December, a US State Department spokesman clearly stated that “our policy is not to support Taiwanese independence . This sent the Taiwanese scrambling for reinterpretation, and their Minister of Foreign Affairs declared that, "[t]he US ‘does not support’ rather than ‘opposes’ Taiwan's independence . The minister also held up a US promise that "they will not damage Taiwan's rights in their negotiations with China". The US later also cancelled a visit by Taiwan’s vice-Defense Minister to the Pacific command headquarters of the US army, as well as a computer simulated military exercise between the two sides.
The Taiwanese have also claimed that Chen and the government continued to stand by the "five noes" promise made during his presidential inauguration speech. According to a spokesman for Chen, foreign news agencies had simply given “wrong information , calling the “defensive referendum  a referendum on independence. There were more Taiwanese moves on the way. Chen promised greater weapons procurement from the US if he was reelected – a bait possibly worth $15 billion for the Americans and a sop to hardliners within his own camp. As if to shore up their position, the DPP also announced that it was beginning a campaign for a referendum on a nuclear-free Taiwan – a counter to Beijing’s recently announced white paper on non-proliferation.
The Taiwanese are also making the point that both former president Lee Teng-hui's "special state-to-state relations" model and Chen Shui-bian's "one country on each side [of the Taiwan Strait]" position deny the "one China" principle but China has not employed military force. Similarly, Taiwan's presidential election in 2000, had also invited warnings of war from Zhu Rongji and then-Vice Chairman of the Central Military Commission Zhang Wannian, in case a DPP candidate were elected.. Both came to nothing.
Taiwan’s separatists have thus played their cards carefully. They have severely restricted US room for manoeuvre and taken the shine off the new Chinese leadership’s recent foreign policy initiatives. It now remains for Taiwan to make its next decisive move, come March 2004.