China to step up pressure on Taiwan — report

Chinese President Jiang Zemin gave this instruction just before arriving in Macau for the handover ceremony on Sunday, it said.

More intensive work on Taiwan should be started soon after the new year, it quoted a Chinese source as saying.

As part of the "united front" strategy, more incentives would be offered to Taiwanese investors in the coastal Fujian and other provinces, while elite Chinese companies would be urged to team up with Taiwanese firms to set up joint ventures in third countries, the report said.

"The idea is, if enough Taiwan businessmen are won over, they will put pressure on the Taipei administration to begin talks with Beijing," said the source, who is close to Beijing’s Taiwan policy establishment.

Simultaneously, a special group in the Chinese Peoples Liberation Army (PLA) would continue to plot semi-military solutions, it said, adding generals were reportedly working on way to paralyse Taiwan’s information technology networks.

Meanwhile, reports from Taipei said Taiwan dismissed China’s latest offer of reunification as "ridiculous".

Reacting on Jiang’s remarks on reunification with Taiwan at the Macau handover, the island’s Vice-President Lien Chan said there was a crucial difference between Taiwan, and Macau and Hong Kong.

"Macau was a colony and so was Hong Kong, but we are nota colony," he said.

A western diplomat said the PLA was confident that by 2010, it could not only establish an overwhelming superiority over Taiwan forces but repel "foreign intervention", a code-word for American support to Taiwan.

Reunification was "an inevitable historical trend which nobody and no force on earth can ever resist" Jiang had said last night at a rally.

"All far-sighted people in the world have seen, from the smooth return of Hong Kong and Macau, that the ‘one country, two systems’ policy is most appropriate and correct and is the best approach to solving the Taiwan question," he said.