Taiwan angry over Chinese missile tests

Taipei has strongly protested against Chinese plans to conduct surface- to-surface guided missile manoeuvres starting tomorrow, just 100 miles north off Taiwan's coast.

The Defence Minister, Chiang Chung-ling, accused Peking yesterday of trying to create social instability. "We should not create nervousness and panic as instability in society is what they hope for. We should stay calm, and alert and don't panic." The Taiwan stock market ignored such advice and dropped 4.2 per cent by end of trading, to close at a 19-month low.

The People's Liberation Army announced on Tuesday that it would conduct missile firings into the area and warned foreign shipping and aircraft not to enter a target region with a radius of 10 nautical miles. The launch practice "into the open sea" will take place between 21 and 28 July.

With Sino-Taiwan and Sino-US relations at a low-point after last month's private visit by the Taiwan President, Lee Teng-hui, to the US, the missile practice serves a number of purposes. It will unnerve Taiwan and warn the island state not to push too far in its affort to win international recognition. It will satisfy China's top brass, who tend to be the most hawkish on issues of sovereignty, that government leaders in Peking are backing a hardline position over President Lee's visit. It will increase the pressure ahead of the planned meeting in Brunei on 1 August between the US Secretary of State, Warren Christopher, and his Chinese counterpart, Qian Qichen. And it will help China's programme to modernise its arsenal.

Relations between Peking and Taipei have withered since President Lee's visit to his alma mater, Cornell University, in June. Peking immediately postponed high-level talks which had been due to take place this month about protection for Taiwanese investment in mainland China. However, China has not made any moves in trade or economic relations, probably aware that it has much to lose. Taiwan is now the second biggest direct investor in the mainland, after Hong Kong, with investment estimated at $15bn (pounds 9.6bn).

The end of the Cold War has boosted Taiwan's ambitions on the world stage, although it has official ties with only 30 countries. Recently Taiwan offered to donate $1bn to developing countries in return for a seat at the United Nations.