China has denounced Taiwan President Chen Shui-bian's inaugural speech as a cloaked address on independence and said Beijing will spare no cost if he continues down the road to statehood.
In his address on May 20th, Mr Chen ruled out any immediate steps towards independence and called for better ties with Beijing in a bid to placate China and key ally the United States.
"Although in his speech, he made no reference to the words 'one country on each side', the content of the whole speech was completely about Taiwan's status as an independent country," Taiwan Affairs Office spokesman Zhang Mingqing told a news conference today.
"The root of tensions in the Taiwan Strait has not been eliminated. The peril affecting peace and stability in the Asia-Pacific region still exists," he said.
"If Chen Shui-bian dares to challenge the people of the world, we will safeguard our sovereignty and territorial integrity at any cost," he said when asked if China would be willing to risk the Olympics over Taiwan.
But the United States last week welcomed Mr Chen's speech as "responsible and constructive" for avoiding an immediate showdown with China and added it created an opportunity for the two rivals to resume dialogue.
China, which regards Taiwan as a renegade province that must be returned to the fold - by force if necessary - told Washington not to be deceived by the speech.
"For such a faithless man, we do not care what he (Mr Chen] says. The key is what he does, which road he would choose," Mr Zhang said. "He is riding near the edge of the cliff, and there is no sign that he is going to rein in his horse."