Talks Yield a U.S. Warning to Taiwan and Pledge by China to Ease Trade Gap

President Bush and Chinese Premier Wen Jiabao traded conciliatory gestures Tuesday after an Oval Office meeting, with Bush issuing an unusually stern warning to Taiwan and Wen promising to address the U.S.-China trade deficit.

Bush urged Taiwan’s president, Chen Shui-bian, to refrain from making any unilateral moves toward independence, a statement that China had been lobbying for as tensions have increased recently between Beijing and Taipei.

Bush said he opposed any change of the status quo by either China or Taiwan. Wen, on his first visit to the United States, responded warmly.

“We very much appreciate the position adopted by President Bush toward the latest moves and developments in Taiwan, that is, the attempt to resort to referendum of various kinds as an excuse to pursue Taiwan independence,” Wen said. “Such separatist activities are what the Chinese side can absolutely not accept or tolerate.”

The friendly exchange alarmed some U.S. conservatives, who fear that China might be encouraged to take action against Taiwan. But administration officials insisted that Bush had not changed policy toward Taiwan and said the president delivered an equally stern message to Wen in private, warning him that the U.S. would tolerate no aggression toward the island democracy.

Bush’s willingness to publicly rebuke Taiwan reflected improving relations between Beijing and Washington, marked by China’s cooperation in fighting terrorism and its efforts to serve as a mediator in the dispute over North Korea’s nuclear weapons program.

Addressing an issue that is already becoming a campaign liability for Bush, Wen said the U.S. trade deficit with China is a problem Beijing takes seriously. The deficit reached a record $103 billion in 2002, and the U.S. fears that it could grow to $120 billion this year. Wen promised to offer a proposal to deal with it, but he provided no immediate details.

Senior administration officials said China agreed to several economic principles that were important to the United States. Wen said that China was not seeking a permanent trade surplus and that the best way to narrow the trade gap was to increase U.S. exports to China rather than decrease Chinese imports.

The Chinese also said their long-term goal was to have a market-driven, free-floating exchange rate for its currency, the yuan. The United States has been pressuring China to revalue its currency, arguing that by keeping the yuan weak, at about 8 to the dollar, Beijing was boosting its exporters at the cost of U.S. jobs.

“The president did note that we have to see concrete progress in that regard,” one official said.

But trade issues, which topped Washington’s agenda, were overshadowed by Beijing’s alarm over Taiwan.

There has been an increase in the war of words between Taipei and Beijing since the Taiwanese parliament last month passed a law allowing referendums and Chen said he wanted a plebiscite on the question of independence. In response, China threatened war.

Bush’s remarks clearly were intended to pressure Chen to back down -- and to cancel a substitute referendum March 20 calling on Beijing to redirect hundreds of missiles aimed at Taiwan.

“We oppose any unilateral decision by either China or Taiwan to change the status quo,” Bush told reporters at the end of his 40-minute meeting with Wen. “And the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.”

Today, the Taiwanese president said that despite Bush’s remarks, he planned to proceed with the March vote. Chen called it “a defensive referendum” to avoid “war and to help keep the Taiwanese people free of fear.” He added, however, that the poll was “also for preserving the status quo.”

Bush reaffirmed Tuesday that the U.S. would adhere to a “one-China” policy and continue to demand that the dispute between Taiwan and China be resolved through peaceful means.

Two senior administration officials said that a “very, very forceful” Bush also warned Wen “in no uncertain terms” that the U.S. “would have to get involved” if China tried to take control of Taiwan by force.

“There is a debate within the administration on how far to lean against independence for Taiwan,” said a former U.S. official, who spoke on condition of anonymity. “But the policy hasn’t changed. We’re in the same place we’ve been since the Clinton years. The administration doesn’t support unilateral moves toward independence. But if you ask, on the record, whether the administration opposes the concept of independence, the answer to that is no.”

Bush’s blunt words to Taiwan’s president came after the White House sent an emissary this month to Taipei to urge Chen, who is seeking reelection, to shun any inflammatory rhetoric or provocative actions.

Some China experts said Bush’s words broke ground by setting tough new guidelines for Taiwan.

Although previous presidents have said they do not “support” Taiwan’s independence, Bush has now declared that the U.S. would “oppose” any moves toward independence, such as the referendum Chen has proposed, they noted.

Thus Bush has “adopted both tougher and more restrictive wording [toward Taiwan] than any president has used,” said Kenneth Lieberthal, a China expert at the University of Michigan. “This is one of those areas where changes in wording are very important.”

James B. Steinberg, director of foreign policy studies at the Brookings Institution, agreed. “This is a much tougher message than we’ve heard before. And appearing side by side with the premier of China while he’s saying this underscores the significance of this.”

Bush’s words were “clearly a push back” against Chen, who in recent months has “increasingly pushed the envelope” on the question of Taiwanese independence, said Samuel R. Berger, who was President Clinton’s national security advisor.

Berger said Bush’s message to Taiwan also seemed designed to counter “mixed signals” that, in his view, some lower-level administration officials have sent to Taipei. The president’s real message to Chen, Berger said, was: “Don’t think you have a green light from the White House to take actions that are provocative.”

Bush’s statements thus amounted to “a wise verbal intervention” to keep the situation from deteriorating, Berger said.

But such diplomatic distinctions did not soothe Taiwan’s many longtime supporters in Congress.

Rep. Sherrod Brown (D-Ohio) characterized such rhetorical formulations as “hair-splitting,” adding that “Taiwan has been our friend, has been a democracy, has done things right. Taiwan is something to emulate. And I think the president’s words are a little bit off here.”

At the White House earlier in the day, Bush accorded Wen an elaborate welcome ceremony on the South Lawn, complete with a 19-gun salute. In their public remarks, both men lauded the growing ties between Washington and Beijing but also acknowledged that differences remain over many issues.

“The growth of economic freedom in China provides reason to hope that social, political and religious freedoms will grow there as well,” Bush said. “In the long run, these freedoms are indivisible and essential to national greatness and national dignity.”

*

Times staff writer Sonni Efron contributed to this report.