DANGEROUS STRAITS

The Taiwan Strait has long been at the center of a war of words. Beijing and Taipei frequently exchange statements full of vitriol--each accusing the other of bringing them closer to the brink of war. But last week it was Washington that dropped the rhetorical bombshell. Buried deep inside a 54-page Pentagon report on China's military readiness, U.S. defense planners speculated that, in the event of a war across the strait, Taiwan might seek to hit "high-value targets" like the prestigious Three Gorges Dam as a way of deterring a Chinese invasion.

Predictably, such speculation did not sit well with Beijing. If the dam were attacked, warned Chinese Lt. Gen. Liu Yuan in the state-run China Youth Daily, Beijing's retaliation would "blot out the sky." Liu, who is the son of the late Chinese president Liu Shaoqi, slapped down the Pentagon's suggestion that such a threat could ever stop a war over Taiwan. "It will have the exact opposite of the desired effect," said Liu, who for good measure described the United States as "a prostitute pretending to be a gentleman."

Tensions between Beijing, Washington and Taipei are heating up--and the rhetoric is testier than it's been in years. Chinese officials consider Taiwan a renegade province that must ultimately be reunified--by force if necessary--with the mainland. The March re-election of Taiwanese President Chen Shui-bian came as a great disappointment to Beijing, whose leaders are growing increasingly impatient with Chen's policies, which they see as not-too-subtle attempts to separate Taiwan from the mainland. "Beijing authorities perceive Chen's government as constantly pushing for Taiwan's independence," says Andrew Yang, a security analyst in Taipei. Recently, for example, Chen has been lobbying for an $18.2 billion special budget to buy American weaponry. If Taiwan's Parliament signs off on the deal, it will be the biggest purchase of U.S. arms in a decade--and is guaranteed to further rile Beijing. "I've been visiting China every year for 25 years," says Sinologist David Shambaugh, "and I've never sensed a higher level of anxiety over the Taiwan issue."

Taiwan's leaders often push China's buttons. But it's the backing that Washington is now offering Taipei that has Beijing seeing red. Indeed, the recent Pentagon report was largely a warning to Taipei that "the cross-straits balance of power is steadily shifting in China's favor." The assessment pointedly stated that Taiwan's decadelong decline in defense expenditures is "undoubtedly seen as an encouraging trend in Beijing." Its recommendation: buy more and better American military hardware to help maintain an edge. Last week a high-level Taiwanese delegation headed to Washington to discuss the massive U.S. arms package that President George W. Bush offered in 2001. The purchase is expected to include six Patriot Advanced Capability-3 antimissile systems, eight diesel submarines and 12 P-3C Orion antisubmarine aircraft--more advanced firepower than Taiwan has ever bought from the United States.

Of course, Taiwan's military shopping sprees are themselves not new. More troubling in Beijing's view are the deepening military relations between Washington andTaipei. This year U.S.-led military exercises in the western Pacific are expected to include the Taiwanese military for the first time in three decades. When Brig. Gen. John Allen visits Taiwan this summer, he will be the first active-duty general from the Pentagon to step foot on the island since Washington ended diplomatic relations with Taipei in 1979.

Even worse, in Beijing's eyes, is the quiet redefinition of the Taiwan Relations Act--the legislation that has guided Washington-Taipei relations since 1979--to allow for broader military ties with the island democracy. Under the Bush administration, the Pentagon no longer sees its assistance as being strictly limited to arms sales. The U.S. military support on offer now also includes training joint forces, setting up a hot line between Taipei and the Pentagon and sharing satellite imagery. The subtle shift has also opened the door for Washington to send military personnel to Taipei in an upgraded capacity to assist their Taiwanese counterparts. Ever since the United States switched its embassy from Taipei to Beijing 25 years ago, American interests on Taiwan have been served by resident U.S. personnel on leave from the State or Defense departments, not active-duty diplomats or military officers. But NEWSWEEK has learned that one possibility being discussed in Washington is the stationing of de facto "defense attaches" on a resident basis in Taipei. "If the U.S. were to upgrade the level of military representation in Taipei, it would be extremely sensitive," says Yang. "Beijing will definitely react."

For the record, Beijing analysts insist China isn't on the warpath. "The leadership wants to maintain the status quo in the Taiwan straits," says Prof. Jin Canrong of Beijing's Renmin University. "But this doesn't mean government officials don't have suspicions about the U.S." And recent frictions have triggered speculation that Beijing may be rethinking its approach to Taiwan. Specifically, Chinese military planners are believed to be preparing a contingency plan to attack Taipei by 2006--the year Chen says he intends to revise the Taiwanese Constitution as part of what Beijing sees as a "timeline toward independence." Almost all experts agree that pre-empting a declaration of independence by Chen takes priority over the China's economic growth, its international prestige, even its hosting of the 2008 Olympic Games.

Imaginations at the Pentagon seem to be captivated by an intriguing turn of phrase in Chinese military rhetoric. The recent defense report said that, in order to overcome current U.S. military superiority, China is seeking "asymmetric solutions to blunt U.S. intervention or deny access to the theater of operations, including development of so-called 'assassin's mace' weapons." Problem is, nobody seems to agree on precisely what the assassin's mace stands for. The phrase may not refer to a single weapons system, but rather "a strategy that goes beyond the use of normal weapons," says Jin, "beyond conventional, nuclear, chemical or biological."

Certainly it could be just more hot air. But in the wake of the Iraq war, Chinese strategists believe that air power alone will not suffice. They now see ground troops as indispensable in any conflict over Taiwan, according to the Pentagon report, and have decided to improve Special Operations, information technology and weapons mobility. And while the focus remains on Taiwan, a senior Pentagon official says there's something "much broader and more fundamental going on." China is seeking "a comprehensive, well-planned, well-executed transformation" of its military capabilities. That's sure to raise fears that the next time bombs start dropping, they won't be rhetorical.

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