Chinese officials responded sharply to Taiwanese President Chen Shui-ban’s calls for new constitution and right to hold referendums, saying moves toward independence could make use of force “unavoidable”. Threat to use force first since 2000. In step thought designed to boost re- election chances by provoking China, President Chen set timetable for referendum on new constitution (December 2006) and implementation (May 2008). But Taiwanese parliament voted down controversial bill allowing referendum on independence; instead passed watered-down version permitting such a vote only in extreme circumstances. China cut ties with Kiribati after island chain recognised Taiwan.

Talk of independence back on front pages in Taiwan after President Chen Shui-bian called for new constitution in 2006 and right to hold referendums, and gave outspoken interview to Washington Post. U.S. officials responded with concern and reaffirmed support for “One China” principle. 100,000 marched in southern Taiwanese city of Kaohsiung in support of president, prompting rebuke from China.

Taiwan failed again in bid to regain seat at UN. Taiwanese authorities took symbolically significant step of issuing passports with “Taiwan” emblazoned on front.

Taiwanese authorities bolstered security measures after uncovering Chinese spy ring. China strongly condemned Taiwan’s eleventh bid for UN representation on 8 August. President Chen announced on 13 August commercial aviation and shipping links may be restored by end of 2004.