Taiwan in dollar panic as Peking starts tests

TERESA POOLE

Peking

Taiwan's people rushed to convert their money into US dollars yesterday, and braced themselves for further missile tests by China into the sea off the island's two main ports. But there was also relief that the mainland's first three test launches had not strayed into Taiwanese territory.

The Defence Ministry in Taipei said that three surface-to-surface M-9 missiles had landed in the sea early in the morning, coming down inside the two target "box" zones previously announced by Peking. They were the first to be unleashed during the exercises, which will continue until next Friday. Two missiles landed about 48 miles west of the southern port of Kaohsiung, and the other near the north-eastern port of Keelung where the target area extends to just 20 miles from the coast. The missiles were not carrying live warheads and had not flown over the island.

In Peking, the leadership stepped up the invective against Taiwan's President, Lee Teng-hui, the front-runner in the island's first democratic presidential elections on 23 March. Since Mr Lee's visit to the United States last June, the mainland has accused him of seeking independence for Taiwan. The Chinese President, Jiang Zemin, last night warned: "Our struggle will not stop for a single day so long as Taiwan authorities do not cease activities to split the motherland for a single day."

Mr Lee has said reunification remained the "ultimate goal" but that the time was "not right" while a Communist government remained in power on the mainland.

China's Foreign Minister, Qian Qichen, said: "The Taiwan compatriots don't have to panic over the pending military exercises by the People's Liberation Army. What they should really worry about is that the 'independence' seekers, with support from some international forces bent on splitting China, continue on their wrong path. That will be a real disaster."

Peking's military exercises are aimed at reducing voter support for Mr Lee, with China's leaders apparently ignoring the possibility that their strategy might have the opposite effect.

Throughout the day, Taiwan's ports resolutely remained open but radio stations broadcast repeated warnings to fishermen to stay away from the target zones. Amid a growing siege mentality, many banks were running out of US dollar notes, and were restricting purchases to $2,000 (pounds 1,300) as people queued to transfer money into a safer currency. The Bank of America said it would fly in more notes on Monday to meet the shortage. Shops saw brisk sales of rice and staple foods.

The Taiwan government tried hard to calm people's nerves, and lambasted the mainland for its "crude threats". The Defence Minister, Chiang Chung- ling, said the island would "fight" if there were an attack which violated its territorial waters. "But the 12-nautical-mile does not represent our bottom line," he added.

Government support for the stock market meant it actually gained more than 1 per cent yesterday. The central bank, which has the world's second largest foreign reserves, said it would continue to bolster the local currency. President Lee appealed for calm, and continued his election campaigning.

China conducted two series of missile tests last year, following Mr Lee's US visit in June, but the present exercises are taking place much closer to Taiwan's coastline. There has been widespread concern that a misfired missile could land in Taiwanese waters, or even on the island, triggering retaliation by Taiwan and a full-blown military conflict.

International condemnation was swift. In the most pointed gesture, Tokyo said it had sent a patrol boat to the area to secure the safety of navigation. The Prime Minister, Ryutaro Hashimoto said Peking's policy towards Taiwan was taking an "unfortunate direction".

The US said the tests were "provocative and reckless". In Washington, a State Department spokesman warned of unspecified "consequences" if the missiles went off course. The Defense Secretary, William Perry, said he and other White House officials protested strongly to Liu Huaqui, foreign affairs director of China's state council.

"I believe the message we communicated was very clear and straightforward," Mr Perry said. He added that the aircraft carrier Independence was about 200 miles north-east of Taiwan and a cruiser and destroyer were nearby.

Suggested Topics
Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Maths Teacher

£90 - £160 per day: Randstad Education Leeds: Secondary Science Teacher (mater...

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for an ...

Maths Teacher

£22000 - £37000 per annum: Randstad Education Leeds: A West Yorkshire School i...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week