Leading Article: One Chinese nation, two feuding states

TENSION HAS been rising in East Asia following remarks made by Taiwan's President, Lee Teng-hui, that China should in future deal with Taipei on a "state-to-state" basis. This would seem to revive the thought, heretical to mainland China, that Taiwan might eventually declare itself a separate country. And yesterday Taipei seemed to encourage this by replacing the old, official formulation of its status - "one China, two political entities" - with the new phrase "one nation, two states". The new formula pointedly leaves out the name "China", and introduces the "splittist" term "state".

Peking has been quick to react, with the People's Liberation Army declaring that the military is "furiously indignant" at these developments and reiterating a threat to put down by force any move towards independence. More worryingly, Peking alarmed the region by announcing that it has successfully developed a neutron bomb. This boast was ostensibly directed at Washington as part of a refutation of recent Congressional accusations that it had stolen US nuclear technology, but the remarks were obviously timed to remind Taiwan of its military prowess.

Coupled with China's stubborn refusal to accept that the US did not purposely bomb its Belgrade embassy in May, it is evident that Peking is doing its best to whip up nationalist sentiments. This is useful as a cloak for its economic difficulties but it is also connected with this October's lavish 50th-anniversary celebrations of the Communists' civil war victory. It must be particularly galling for Peking to be reminded at this time that the defeated nationalists who fled to Taiwan have been the economic winners in these five decades. Perhaps this accounts for the Liberation Daily's outburst yesterday that President Lee Teng-hui "will leave a stink for a thousand years".