TAIPEI, Oct 18 (Reuters) Taiwan opposition lawmakers have voted to slash the budget to produce cruise missiles that could strike Chinese targets such as Shanghai, effectively freezing the programme which had aimed to begin mass production next year.
Lawmakers from the Nationalist Party feared approval of the missile's production budget would needlessly antagonise rival China, which views the island as a rebel province to be unified with the mainland -- by force if necessary.
''I am afraid it would send wrong signals to all concerned, particularly when Chen Shui-bian's administration is recklessly pushing towards the red line,'' Su Chi, a senior Nationalist Party member of the parliament's National Defence Committee, told Reuters.
President Chen, head of the independence-leaning Democratic Progressive Party, has angered both Beijing and main ally Washington by pushing ahead with plans to hold a referendum on Taiwan's entry into the United Nations alongside presidential elections next March.
The United States has said the referendum could be a precursor to a formal declaration of independence, which China has said could lead to war.
China has claimed sovereignty over self-ruled Taiwan since the end of the Chinese civil war in 1949.
The defence ministry had planned to produce 245 Hsiung Feng IIEs, a homegrown missile system, and requested 34.6 billion Taiwan dollar (1.06 billion dollar) over eight years in the classified portion of the ministry's budget, said Su.
The ministry had sought 3.8 billion Taiwan dollar for 2008, said Su.
Lawmakers instead cut the budget by one-third, froze another one-third and passed the remainder, said Su.
The missiles are believed to have a range of 600 km, putting locations such as Hong Kong and Shanghai in range, countering in part the threat from the around 1,000 missiles Taiwan says China has targeted at the island.
A final decision on the budget still requires review by a session of parliament, where the opposition holds a slim majority.
Reuters AE DB1044