Just a few minutes before his speech, Taiwan's relaxed, smiling president chatted with his archrival, Kuomintang chairman Ma Ying-jeou. In a gesture of goodwill, Mr Ma, who is also the mayor of Taipei, had jogged from Taipei City Hall across town to attend the traditional flag-raising ceremony at dawn. This was the first time the KMT leader had attended the ceremony since Chen Shui-bian took office in 2000.
But Mr Ma was in for a shock. The local media had been suggesting that Mr Chen - politically damaged by his party's poor showing in last month's local elections - would announce further liberalisation of economic ties with the mainland.
A defiant Mr Chen had a much different agenda. First, he lectured Mr Ma about his party's opposition to the US$10 billion arms package which, he says, Taiwan must buy to defend itself against the mainland. Then Mr Chen announced that rather than liberalising relations with Beijing, he would 'aggressively manage' them in an effort to reduce Taiwan's dependence on the mainland.
His use of the term 'manage', which has overtones of control in Chinese, has been interpreted in the local press as meaning that his administration will restrict economic ties with the mainland by more vigorously enforcing existing regulations on Taiwanese businesses investing there.
While the international media has focused on how Mr Chen's speech could affect cross-strait relations in the short term, more attention should be focused on the commitment he made to securing his legacy during his remaining 21/2 years in office.
In effect, Mr Chen announced on Sunday that he was going to stop trying to please 'other people', including the opposition, Beijing and the United States.
Instead, he will push forward with his programme of Taiwanese nation-building by drafting a new constitution this year and holding a referendum on it next year 'if social conditions permit'.