Saturday, July 17, 1999
Coastal alert as Taiwan tensions rise South China Morning Post STAFF REPORTERS and AGENCIES
Beijing has ordered a military alert along its southeastern coast as tensions increase with Taiwan.Stocks plunged more than six per cent in Taipei yesterday as news of the alert spread.
The alert was the latest move in the stand-off with Taipei, triggered when President Lee Teng-hui last weekend described relations with the mainland as "state-to-state".
In another sign of increased tension, Beijing said a planned trip to Taipei by top negotiator Wang Daohan would be impossible unless Mr Lee's remarks were explained.
The military alert applied to the southern regions, sources said. "The Nanjing military district was ordered on low-level alert on Wednesday," a source said. "They are now on a level-two alert."
A level-two is one step down from red alert.
The Nanjing military district spans most of the southern and eastern Chinese seaboard.
In Taipei, a Defence Ministry spokesman, Kung Fan-ding, said there were no signs of movement by the mainland forces.
Analysts said it was unlikely the mainland was considering military action against outlying islands as newspapers had claimed.
"These islands were attacked a long time ago, but there is no immediate risk," a Western military expert said.
However, he said that military exercises like those of 1996 were not out of the question.
Mainland forces shelled the islands in the 1950s, and in 1996 Beijing lobbed missiles into the sea off Taiwan in an unsuccessful attempt to persuade Taiwanese not to vote for Mr Lee in the first direct presidential election.
Taiwan's United Daily News said military commanders on outlying islands had been ordered to call off their holidays.
Taiwan's stock market plunged 6.39 per cent yesterday, knocking markets in the mainland, Hong Kong and Singapore. The Taiwan market has fallen 13.31 per cent this week.
"The Taiwanese market is dominated by retail investors and sentiment is easily affected," ING Barings head of Taiwan research Andrew Chen said.
The Hang Seng Index shed 1.55 per cent to close at 13,545.24 points yesterday, bringing full-week losses to 4.76 per cent.
All four of the mainland's bourses fell, with the two foreign-currency markets each suffering losses of more than four per cent.
The rift comes at a rough time for Beijing, which had recently enacted measures to shore up its stock markets.
Washington issued a clear warning to Beijing after the latest row erupted.
"We would . . . consider any effort to determine the future of Taiwan by other than peaceful means as a threat to the peace and security of the Western Pacific area and of grave concern to the United States," State Department spokesman James Rubin said.
"That's about as strong a statement as one can make."
Tung Chee-hwa said Mr Lee's remarks were unwise and described his intention as "worrying for all of us".
"This particular one-China policy is actually very much accepted internationally as well as [by] Chinese people everywhere, on the mainland, Taiwan, overseas and Hong Kong.
"That's why what Mr Lee said the other day was unfortunate and unwise," Mr Tung said.
Published in the South China Morning Post. Copyright © 1999. All rights reserved.
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