China yesterday dismissed Taiwan's attempt to "clarify" President Lee Teng-hui's call for "special state-to-state" ties with Beijing, saying it had broken pledges to uphold a one-China policy.
China's Association for Relations Across the Taiwan Straits said a letter and statement by the head of its Taiwan counterpart was "a grave violation of our 1992 agreement to uphold mutual recognition of the one-China principle and we reject it".
Taiwan's chief China affairs envoy, Mr Koo Chen-fu, had said earlier that the island remained committed to democratic union with China and that planned autumn talks should go ahead to keep communication lines open.
Beijing, which has viewed Taiwan as an insubordinate province since the late 1940s civil war, opposes all assertions of sovereignty by the island's government.
Mr Koo repeated official statements that a new designation for contacts ("state-to-state") was necessary because China had used the old "one China" formula to whittle away the Taiwan government's existence internationally.
He appealed to Beijing not to let the sovereignty dispute wreck plans for a "historic" meeting between himself and Mr Wang Daohan, chairman of Beijing's Taiwan affairs agency, fixed tentatively for September or October.
Meanwhile, China and the US reached agreement yesterday on compensation for casualties in NATO's bombing of the Chinese embassy in Belgrade, the official Xinhua news agency said.
"The United States will pay $4.5 million to the Chinese government, which will divide the money among the relatives of the three journalists killed and the injured during the bombing," the agency quoted foreign ministry officials as saying. The announcement came as a US State Department legal adviser finished a second round of talks with Chinese officials on compensation for the bombing.
Five US missiles hit the embassy on May 7th during the 79-day NATO bombing campaign of Yugoslavia, killing three Chinese civilians and injuring 20 others.
Both the US and NATO called the embassy bombing a "tragic error" caused by outdated maps and errors that went unchecked. China refused to accept this explanation and described the bombing as a premeditated attempt at "containing China".