Chen's comments will damage island's economy, says researcher

Recent speeches by President Chen Shui-bian on Taiwan's political status will have a long-term negative effect on the island's economy, according to a mainland researcher.

Liu Yingxian, a researcher at the Institute of Taiwan Studies under the Chinese Academy of Social Sciences, told China News Service that the controversial comments by Mr Chen would hurt Taiwan's economy.

In a televised conference early this month, Mr Chen told activists who supported Taiwan independence in Japan that the island should 'seriously consider' passing laws that would allow it to hold referendums to decide its political status.

He also refused to accept the 'one China' principle and described Taiwan and the mainland as 'one country on each side' of the Taiwan Strait.

Taiwan's share prices fell sharply immediately after Mr Chen made his remarks and only steadied after officials repeatedly reassured the public that the government had no plans to change its mainland policies or push for referendum laws.

But Ms Liu yesterday said the stock market plunge was just the beginning. Citing extensive statistics from Taiwan, the researcher said cross-strait investment and trade already played a significant role in Taiwan's economy.