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. Last Updated: 07/27/2016

Taipei Tense, China Curt Over Rumors of Attack

TAIPEI -- Taiwan was shaken Thursday by a U.S. newspaper report that China plans to attack it, and Beijing has fueled the nervousness with its refusal to comment.

But analysts were skeptical about the possibility of any all-out invasion.

Premier Lien Chan assured Taiwanese that Taipei could defend itself against its giant arch-rival but many remained unconvinced, sending share prices to end 73.65 points or 1.47 percent down at 4,940.07.

"People are worried when they think of a possible attack by China. It doesn't matter how remote the possibility looks," said Thomas Chien of Wardley James Capel Securities.

The central bank had to intervene to support the Taiwan dollar against waves of selling. It ended at Taiwan $27.447 against Wednesday's Taiwan $27.450 close.

At the heart of the new tensions was a New York Times report on Wednesday which quoted a former top U.S. official as saying China was planning one missile strike a day for 30 days after presidential elections in March. It said the aim would be to teach President Lee Teng-hui, likely winner of the elections, to scale back efforts to gain greater international recognition for Taipei's government.

China said Thursday it would offer no comment on the report. "We do not comment on such speculation," Foreign Ministry spokesman Chen Jian said.

Western diplomats in Beijing said the decision to neither confirm nor deny the report appeared intended to keep the island nervous about Beijing's intentions.

"They would not be unhappy if this intimidates Taiwan," said one Western diplomat. "This helps to reinforce the notion that Beijing is keeping its options open."

Beijing and Taipei have been bitter rivals since the end of the civil war in 1949, when the vanquished Nationalists fled to the offshore island.

China maintains a general threat to attack Taiwan should it drop a pledge to reunify with the mainland and announce independence.

The newspaper report was expected to trigger the most serious rift in China-Taiwan ties since Beijing launched a series of live-firing exercises and missile tests in the months preceding Taiwan's December parliamentary elections.

Few saw an immediate danger, however.

U.S. State Department spokesman Nicholas Burns said Wednesday that Washington saw "no imminent threat" to Taiwan but was "monitoring the situation very closely," while Japanese Prime Minister Ryutaro Hashimoto said he did not think a conflict was likely at present.

Western and Chinese military analysts in Hong Kong said the Chinese People's Liberation Army, or PLA, the world's largest, could be tempted to strike if Taiwan opted for independence after the March polls but would refrain from invasion.

"China's military leaders have grown overconfident and are talking in Beijing as though an attack on Taiwan would be a pushover," a Hong Kong-based Western diplomat concerned with regional strategic security matters said.

China could traumatize Taiwan with missile strikes but launching a successful invasion against Taiwan would be much more difficult, said Andrew Yang, secretary general of the Chinese Council of Advanced Policy Studies.