TAIPEI, Taiwan, March 17 -- China's new anti-secession law has produced a sudden rise in tension across the Taiwan Strait, leaving Taipei in a combative mood and putting an indefinite hold on practical improvements such as direct airline flights to mainland China.
President Chen Shui-bian, an ardent champion of independence for this self-governing island, has led his countrymen in venting anger at the legislation, calling it a "guillotine" over Taiwan's head. But he has been careful to limit his response to rhetoric, avoiding steps that China would regard as provocative and that could cost Taiwan what it has gained in international sympathy since the law was passed in Beijing on Monday.

Pro-independence demonstrators in Taipei burned a Chinese flag outside parliament on Monday, after China announced its new anti-secession law.
(Jerome Favre -- AP)
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"We are trying to be the responsible side in this dispute," said Hsiao Bikhim, a legislator and foreign policy specialist in Chen's Democratic Progressive Party.
Nevertheless, the Chinese legislation, with its threat to use "non-peaceful means" to prevent Taiwan's formal independence, has, for the foreseeable future, poisoned what had been an improving atmosphere and canceled out a string of conciliatory gestures from both sides that had raised hopes for progress in the long and bitter standoff.
"If a little goodwill here is responded to by a slap in the face, then that's it for a while," Hsiao said.
The main outcome, officials from several political currents said, was the likelihood of a long delay for several proposals aimed at improving people's lives, even in the absence of political agreement over Taiwan's status. In a statement Wednesday, Chen called such proposals "petty" and suggested that for the time being, he was not interested in pursuing them.
The proposals included Beijing's call for negotiations to set up more direct charter flights to ease visits between mainland and Taiwanese families, to arrange direct cargo flights to aid Taiwanese businesses with facilities on both sides of the 100-mile strait and to loosen controls on Taiwanese fruit and vegetable exports to China.
In the statement, described by his office as "solemn," Chen decried the law's threat of force to prevent formal independence and called it an insult to Taiwan's democratic system. The island's future, he insisted, would not be decided by Beijing, but by the 23 million people of Taiwan. He urged his followers to make their feelings known by turning out March 26 for a million-person parade being organized by his party.
Chen also said the new law had "caused severe impacts on cross-strait relations, which were showing signs of improvement."
But analysts from Chen's party and opposing groups noted that the president avoided mentioning previously announced plans to inch Taiwan symbolically down the road toward independence. These goals, which he advocated during December's legislative election campaign, included changing the names of state-owned enterprises to emphasize "Taiwan" instead of "Republic of China" and holding a referendum touching on the island's status.
Premier Frank Hsieh suggested during an exchange with legislators Tuesday morning that China's new law could justify such a referendum. But by mid-afternoon, the government retracted his statement, an embarrassing reversal that served to emphasize Chen's caution.
"That showed where the bottom line is," said C. Joanna Lei, a legislator from the opposition Nationalist Party.
Lei said even Chen's rhetorical reaction amounted to overkill since the Chinese legislation only codified a long-existing policy. The president would do better to focus on parts of the law that called for practical steps to improve ties and reduce tensions, she said, in hopes of returning to the positive atmosphere of early this year.
"If we look at relations with China, nothing fundamental has changed," she said.
Beijing's aim in the proposals for more flights and agricultural imports was to engender goodwill toward China among Taiwanese who might otherwise support Chen, Taiwan specialists in Beijing said. But the new law appears to have overwhelmed that tactic, at least for now. An opinion survey this week showed that more than half the Taiwanese people believe the legislation strengthened support for Chen's pro-independence stand.
By hardening the atmosphere, the legislation has also increased chances for approval in Taiwan's parliament of a long-delayed purchase of U.S. weapons systems, a deal proposed by Chen's government and urged by the Bush administration, according to legislators.
The deal, amounting to $18.2 billion, was turned down in parliament last year on grounds that it was too expensive and perhaps inappropriate to Taiwan's needs. It was to include 12 P-3C Orion submarine-hunting aircraft, eight diesel-electric submarines and six PAC-3 (Patriot Advanced Capability-3) missile batteries. Much to the irritation of Washington, the discussion of its price and suitability also became part of the Dec. 11 legislative election campaign.
Faced with roughly the same political array in the new legislature, Chen's government announced Wednesday that it had reduced the cost of the package to $15.8 billion.
Party leaders scheduled a meeting for Friday to consider the new package.