TAIPEI, Taiwan -- Taiwan President-elect Chen Shui-bian on Wednesday held out hope of buying state-of-the art U.S. destroyers in the future and warned that Chinese threats against the democratic island could backfire.

"Although the Aegis-equipped destroyers are not on the arms sales list this year, such sales are not canceled but deferred according to our understanding," Chen told a group of foreign reporters."I believe there is a strong possibility of a different decision in the future," said Chen, who swept to power in presidential elections last month.

The United States agreed on Monday to the sale of some military equipment to Taiwan but deferred a decision to sell four destroyers equipped with the Aegis battle system, which have a radar and computer array capable of tracking more than 100 targets on land, air and sea simultaneously.

Pentagon spokesman Ken Bacon, describing the arms package agreed to by the White House on Monday as "good, strong and fair," added, "If something wasn't in it this year, it could well be in it in some future year."

Taiwan's diplomatic rival China quickly slammed the U.S. decision, saying the arms deliveries emboldened the island's independence movement and damaged China-U.S relations.

The United States decides each year what weapons to sell to Taiwan. Under the Taiwan Relations Act of 1979, passed when Washington switched diplomatic recognition to Beijing from Taipei, the United States promised to provide the island with enough weapons to defend itself.

Chen, who said he would "overcome the hard with gentleness" in dealing with Beijing, nonetheless added that military threats by China against the island were a challenge to the United States, Japan and other Asian neighbors.

"Peace and stability in the Asia-Pacific region is not only in the interest of Taiwan, but also a common interest among the United States, Japan and other countries in the Asia-Pacific region," Chen said.

Chinese military threats and intimidation would be viewed as provocative by the international community, Chen said.

Chen, due to assume office on May 20, said Taiwan has not decided whether to join the U.S. anti-missile defence umbrella in Asia, or the proposed Theatre Missile Defence (TMD), and said it would be unnecessary if Beijing stopped deploying missiles.

"If China can prevent its missile deployment and military threats, there will be no TMD by the United States and even if we want to there would be no TMD to join," Chen said.

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Chen said Taiwan's military strategy was to maintain its superiority in the air and sea and to thwart any beach landing or naval blockade by China.

A recent Pentagon report revealed that China was building a major force of ballistic and cruise missiles near its coasts and could present an overwhelming military threat to Taiwan in five years.

Tension between Taiwan and China ran high after Chen, whose Democratic Progressive Party espouses a formal break from the mainland, won the presidential elections, ending more than five decades of Nationalist rule on the island.

Beijing has viewed Taiwan as a wayward province subject to eventual union with the mainland, by force if necessary, since the Nationalists lost a civil war to the Chinese Communists and fled into exile in 1949.

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