U.S. President George W. Bush said in Washington Tuesday that he opposed a Taiwan referendum which might lead the island towards independence, and his stance was appreciated by visiting Premier Wen Jiabao.

U.S. President George W. Bush listens as Premier Wen Jiabao (L) makes a point during remarks to the international press in the Oval Office of the White House, December 9, 2003. [Reuters]

The two leaders held a small group meeting in the White House first and then met reporters in the Oval office.

The US Government "opposes any unilateral decision'' by either sides of Taiwan Straits "to change the status quo, and the comments and actions made by the leader of Taiwan indicate that he way be willing to make decisions unilaterally to change the status quo, which we oppose,'' said President Bush.

He said the US Government holds a one-China policy based on the three communiques and the Taiwan Relations Act.

Wen, who flew into Washington on Monday night from New York, expressed his appreciation for Bush's commitment to the three China-US joint communiques and the one-China policy.

"In particular, we very much appreciate the position adopted by President Bush towards the latest moves and developments in Taiwan, that is, the attempt to resort to referenda of various kinds as an excuse to pursue Taiwan independence,'' said Wen.

He reiterated China's position of resorting to peaceful means to seek reunification as long as "there is a glimmer of hope.''

However, he said that the so-called "defensive referendum'' proposed by Taiwan authorities aims at separating Taiwan from China, which is totally intolerable.

Since Taiwan lawmakers passed a bill allowing referendum last month, which is seen by Beijing as a step towards independence, cross-Straits tensions have escalated.

On bilateral trade, Wen said the main problem between the two countries is the US trade deficit with China.

Premier Wen Jiabao shakes hands with U.S. President George W. Bush in the oval office of the White House, December 9, 2003. [Reuters]

He said China takes it seriously and has taken measures to solve this problem.

In the past 25 years since the two countries established diplomatic relations, bilateral trade has experience tremendous expansion, from a mere US$2.5 billion in 1979 to over US$100 billion today.

Wen said such an achievement is not easily made and the development of relations in these fields benefits both countries and peoples.

He said he will offer proposals in the later large group meeting with Bush on furthering bilateral economic and trade relations.

Bush thanked China for starting the six-party talks on nuclear issues on the Korean Peninsula.

"We will continue to work with China and other countries involved to resolve this issue peacefully,'' he said.

Before their meeting in the White House, Bush held a welcoming ceremony for Wen.

"Our co-operation in a wide range of areas such as counter-terrorism, the economy, trade and international and regional issues has effectively safeguarded our mutual interests and promoted peace, stability and prosperity in the Asia-Pacific region and the world at large,'' said Wen in his speech.

"The fundamental interests of our two peoples and the people around the world require that China and the United States step up co-operation, increase mutual trust and further push forward constructive and co-operative bilateral relations,'' Wen added.

He called on leaders from both countries to view and handle China-US relations from a historic perspective and with strategic foresight and courage.

"So long as the two sides continue to strictly abide by the principles set forth in the three Sino-US Joint Communiques and boost co-operation, our relations will keep moving forward steadily,'' said Wen.

The Chinese premier Tuesday also met Speaker of the House Dennis Hastert and attended a banquet hosted by Secretary of State Colin Powell.

Premier Wen shakes hands with US Secretary of State Colin Powell. [Xinhua]

Focusing on Taiwan

Speaking to reporters after a 40-minute meeting with Bush in the Oval Office, Wen said China "respects the desire of the people in Taiwan for democracy," but that some Taiwanese leaders were "only using democracy as an excuse" to move toward splitting Taiwan away from China, which the Beijing government "cannot tolerate."

Wen said China is determined to uphold its "one-China policy" and maintain "national unity," but also would not give up "our aspiration for peaceful reunification."

After a welcoming ceremony on the South Lawn featuring an honor guard and a 19-gun salute, Bush escorted Wen into the White House past rows of Chinese and US flags. The visit by the 61-year-old premier, who took office in March, marks the first official trip to the United States by a new generation of Chinese leaders.

In a speech before beginning talks with Wen, Bush hailed Chinese cooperation in meeting global threats, saying the two nations are "working together in the war on terror" and "fighting to defeat a ruthless enemy." He called the United States and China "partners in diplomacy working to meet the dangers of the 21st century."

Wen also cited Chinese cooperation in "counter-terrorism," among other issues, and said relations with the United States have "stood the test of time." But he added that the two countries now stand "at a crucial juncture" and said improvement in the relationship depends on continued U.S. adherence to the one-China policy, under which Beijing holds that Taiwan is an inseparable part of China and can never become independent.

For his part, Bush sought to persuade China to revalue its currency, the yuan. Bush told Wen he favors "market-determined exchange rates." The Chinese prime minister said the transition to such rates is "a complex process" and said U.S. and Chinese officials have agreed to discuss the issue next month in Beijing.

"Statement of a Shadow"

In comments before Bush made his statement, Taiwanese authorities vowed to go ahead with the referendum despite U.S. pressure to call it off. A Taiwan authorities spokesman dismissed a warning from a senior U.S. official who spoke to reporters earlier on condition of anonymity.

"I cannot respond to a statement of a shadow," said James Huang, a spokesman for Chen Shui-bian, the Taiwan leader, referring to the anonymous warning.

On Monday, a Bush administration official, speaking to reporters without attribution, bluntly warned Taiwan against holding the March referendum. "We don't want such a referendum," the official told reporters. "We're not clear what logical purpose it would serve."

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