The move is considered as a part of an effort to ease tension caused by Chen's earlier speech which mentioned "one country on each side."

The anti-submarine exercise, scheduled for August 15 to the east coast of the island, was to feature F-16 jet fighters and "success" warships.

According to Chinese Times, the cancellation of the exercise is also out of the need of surveillance and "guard" against People's Liberation Army, the mainland army.

Chen Shui-bian tried Tuesday to soften his position saying that his speech had been oversimplified by the media. "Equal sovereignty" would have been a more appropriate way to sum up his speech, he said.

In a speech on Saturday, Chen said that holding a referendum on Taiwan independence was a "basic human right" and in reality there was "one country on each side" of the Taiwan Straits.

(China Daily August 7, 2002)