Taiwan's President Chen Shui-bian whacked several hornets' nests in Washington, Beijing and Taipei on Saturday when he suggested "urgent" legislation on a national referendum on Taiwan's future -- perhaps not now, but whenever such a law is necessary. The administration of U.S. President George W. Bush was caught off-guard, as no doubt were Chinese leaders in Beijing. "Referendum" is a dirty word in Beijing's lexicon of Taiwanology. It suggests that Taiwan's people may choose independence in a free and democratic ballot. But dodgy as the language is, this is no time for either Washington or Beijing to overreact, because the substance of Taiwan's official stance has not changed.

For the past few weeks President Chen has been alluding to Taiwan "seriously considering going its own way" if Taiwan's "goodwill is not reciprocated by Beijing." Worried American diplomats asked their Taiwan counterparts about this new formulation and the answer was "read the prepared text" and don't pay attention to off-the-cuff remarks. Indeed, Mr. Chen himself later hinted "going its own way" meant Taiwan would encourage less direct investment in China (now over $100 billion by some measures) and more in Southeast Asia.

But the Taiwanese diplomats obviously weren't in the loop either. President Chen's speech Saturday to an annual conclave of the staunchly pro-independence World Federation of Taiwanese Associations in Tokyo proved as much. Speaking exclusively in Taiwanese, Mr. Chen reiterated in bold language (even for Taiwanese) Taipei's long-held position that Taiwan is a sovereign and independent country.

"We must be very clear in differentiating between Taiwan and China on the opposite coast, one nation per coast," said Mr. Chen. "Taiwan will not be bullied, belittled, marginalized or localized. Taiwan is not part of anybody else, nor is it anyone else's regional government or a province." Moreover, he averred that "only the 23 million people of Taiwan can determine Taiwan's future, and when it is necessary how should this be decided?" The answer, he said, is "the ideal and goal which we have long sought, and which is the common thought of us all -- referendum." Then, Mr. Chen pronounced "we must seriously consider the importance and urgency of legislation for a referendum."

A precise and careful lawyer, President Chen was careful not to cross Beijing's bright line that warns of dire results if Taiwan holds a referendum on the island's de jure independence (i.e. permanent break) from China. The island has been de facto separate from China for over 100 years since the Japanese seized it from China's Manchu empire in 1895. President Chen's point was that Taiwan's status quo for the past 53 years has been that Taiwan is its own domain, with its own government, its own army, customs, immigration, taxes, population, territory, etc. In short, the status quo is that Taiwan is emphatically not part of China. Any change in that, President Chen says, must be the result of a popular vote.

In cities of short attention spans where myriad foreign policy crises swirl at once, decision makers in Washington and Beijing are likely to feel blindsided by President Chen's comments. Washington has Iraq, Israel-Palestine and Afghanistan on its collective diplomatic mind, to which President Bush adds his own worries about Wall Street, corporate fraud and the crucial mid-term elections.

Beijing's leaders are in the middle of their own succession crises at the north China resort city of Beidaihe. Not only are there reports that 76-year old Jiang Zemin wants to hang on to power for another five years -- against the prevailing sentiment for turning leadership over to a younger generation -- but China's financial institutions are in a shambles, and China's economic reforms have missed hundreds of millions of poverty-stricken peasants and urban unemployed. In all this, Beijing's leaders probably don't see that their own aggressiveness against Taiwan has prodded the Taiwan president to react. Their instinct will be to let the military take the initiative, and who knows where that will lead.

In May 2000, Beijing's top general, Zhang Wannian, declared to the new incoming Taiwanese president "independence means war," to which President Chen countered, "war means independence." What he actually said in his inauguration address on May 20, 2000, was: "As long as the Communist regime has no intention to use military force against Taiwan, I pledge that during my term in office, I will not declare independence . . . and I will not promote a referendum to change the status quo in regards to the question of independence or unification."

But China has held Taiwan under continuing and unrelenting diplomatic pressure. Last year, China refused to invite Taiwan's representative to the Asia Pacific Economic Cooperation leaders conference in Shanghai, then China violated World Health Organization procedures to keep Taiwan out over Washington's feeble objections. Then Beijing went out of its way to offer a $150 million loan to the tiny Pacific island of Nauru (population: 12,000) if it would break relations with Taiwan. The cash-strapped microstate gladly obliged, leaving Taipei with barely two dozen countries that recognize it -- not Beijing -- as the government of China. Clearly, Taipei sees little future in being the government of China.

Finally, the last straw came on August 1, which is designated as "People's Liberation Army Day" in China. Chinese Defense Minister Chi Haotian repeated yet again that Beijing "absolutely will not make a commitment to abandon the use of military force" against Taiwan. "We have the determination," he said,  "and the ability to preserve the nation's sovereignty and territorial integrity." And he warned "no form of separatist Taiwan independence plot will be tolerated. Unification of the motherland is the great trend of the times, and I am convinced that with the common effort of all China's children, the unification of the motherland will certainly be accomplished at an early date."

As a sympathetic observer of Taiwan's predicament for over 40 years, I understand President Chen's growing frustration with China's tightening of the noose. In 1999, Chinese pressure and the indifference of the administration of former U.S. President Bill Clinton incited Mr. Chen's predecessor, Lee Teng-hui, into a very similar reaction when just one too many foreign journalists asked him how it felt to lead a "renegade province." Mr. Lee responded with a litany that had been almost a year in the making. The relationship with China, he insisted "has been defined as a state-to-state or, at least, a special state-to-state relationship, not a relationship between one central government and one local government."

The problem in 1999 -- as now -- was that Taipei did not alert Washington that a major policy readjustment was in the offing. The new "two Chinas" stance just appeared full grown from the brow of President Lee. Without forewarning, the Clinton Administration saw Taiwan as the "troublemaker" but thereby only encouraged Beijing to be more obstreperous. This proclamation of a "two China's" policy caused much anger in Beijing and led to a number of aggressive encounters between Chinese Su-27 fighters and Taiwanese Mirage 2000 jets over the Taiwan Strait.

Beijing is almost certain to react badly to President Chen's "pushing the envelope." But any such overreaction in Beijing would be the worst outcome. China would just demonstrate its bad behavior once again, making its reaction the focus of attention in the United States, instead of President Chen's remarks. Any pressure from Washington on President Chen to retract his words would be met with resistance, resentment, probably failure and would only leave Taiwan feeling more isolated and hence more amenable to a referendum. It would also give the Taiwanese president a good reason to deflect the ongoing American cajolery to buy several billion dollars worth of Boeing 777 airliners.

No doubt, the Bush administration's immediate reaction to this new complication from Taiwan will be annoyance. Washington already faces several very big crises and will not appreciate having more dumped in its lap -- especially by a friendly government without so much as a by-your-leave.

Still, the more effective way of defusing China's ire is to remind Beijing of Washington's longstanding position that "the United States takes no position on the question of Taiwan's sovereignty, and we believe this is a matter for Chinese on both sides to resolve peacefully among themselves." Taiwan is likely to get more paranoid as Beijing ratchets up its pressure, and the U.S. must patiently re-explain to China that it will still "do whatever it takes to help Taiwan defend itself."

The effective response from Beijing would be to make whatever rhetorical fuss they feel is appropriate, but refrain from goading Taiwan into making good on its moves toward a referendum. After the conclusion of the 16th Communist Party Congress this fall and the 10th National People's Congress next March, Beijing should drop its insistence on the "one China" precondition and call Taipei's bluff. Its time for Beijing to sit down with Taipei and discuss a "future one China" just as President Chen offered to do in May 2000.

John J. Tkacik, Jr., is a research fellow at the Heritage Foundation in Washington, D.C. He is a retired officer in the U.S. foreign service who served in Beijing, Guangzhou, Hong Kong and Taipei.