On 10 October, Taiwan's National Day, President Chen Shui-bian laid out a framework for resuming cross-Strait talks which had been suspended since 1999 when former Taiwanese President, Lee Teng Hui referred to cross-Strait relations as "state-to-state" relations. In his speech Chen referred to "transfer of power and personnel reshuffling" in the mainland and hoped that the new leadership would be amenable to creating opportunities for dialogue.

Taipei has taken note of the restatement of Chinese foreign policy under the "strategy of peaceful rise". China's new leader, Hu Jintao, is believed to be actively promoting this policy. While Hu will definitely not dilute China's stand on Taiwan, the new strategy provides opportunities to both sides to follow less confrontationist policies and thus concentrate on areas of cooperation. In an important statement of 17 May 2004, before Chen's inauguration, Hu's government offered to hold "equal-footed consultations" with Taiwan to "jointly build a framework for conduct of peaceful cross strait relations." Beijing also extended the offer of consultations on "the issue of international living space of the Taiwan region commensurate with its status." By Beijing's standards, this was a generous offer acknowledging Taiwan's ambition to represent its 23 million people and their economic and cultural interests as diverse from that of the mainland.

Chen's National day speech is seen as a response to the proposals made by Beijing in May. Chen proposed the resumption of dialogue with the mainland under the "1992 consensus." The "1992 consensus" refers to a meeting between Taipei and Beijing that laid the groundwork for instituting a dialogue process. The 1992 Hong Kong meeting produced a verbal agreement between the two sides on the "One China principle" while accepting that both held differing interpretations of the principle. Chen qualified that this option was "not necessarily perfect, but acceptable" and advocated it as "preparation for a step forward in the resumption of dialogue and consultation."

Invoking of the "1992 consensus" to resume the dialogue process has not gone down well with either his critics, at home or in Beijing. The major criticism is that a return to the ambiguity of 1992 is not a step forward in cross-Strait relations. An across-the-board criticism from the opposition parties in Taiwan held that Chen's proposals are not original and merely reiterate Beijing's 17th May statement. With the elections to the Taiwanese legislature barely a month away, opposition leaders in Taiwan have attacked Chen's speech as an election gimmick. Chinese Nationalist Party (KMT) Chairman, Lien Chan, accused Chen of attempting "to paper over the dire cross-Strait situation." The People First Party (PFP) calls for a "Taiwan Peace Law" which would envisage a comprehensive discussion with the mainland on nine issues ranging from opening China's market to Taiwan's agricultural products to a 50-year truce across the Strait. The Taiwan Solidarity Union (TSU) has accused Chen of making concessions that weaken Taiwan's position and of harboring unrealistic expectations from Beijing.

China perceives Chen Shui-bian as interested in pushing the agenda for an independent Taiwan. Chen's proposals have not changed this perception and Beijing has dismissed his reference to the 1992 consensus as "wordplay" and a "grave provocation to peace and stability across the Taiwan Strait." Beijing insists that Chen continues to indulge in splitting Taiwan from the Mainland. Beijing has taken exception to Chen's declaration that "the Republic of China (ROC) is Taiwan, and Taiwan is ROC" which excludes the mainland. This, in Beijing's view, is in opposition to the One China principle and any proposals made without commitment to this principle are unacceptable. The only favorable response to Chen's speech has come from the US that called Chen's speech "constructive" and hoped for "creative ideas for reducing tension and resuming the cross-strait dialogue."

By returning to the "1992 consensus", Chen hopes that the two sides can agree to disagree on the issue of political sovereignty and focus on areas in which they can cooperate. This includes practical issues like charter passenger and cargo flights to and from the mainland. At a more ambitious level, Chen hopes that resumption of dialogue under the "1992 consensus" will create opportunities to discuss arms control with the mainland and conclude a code of conduct for cross-Strait relations. Chen's assumption is that if in 1992 the two sides could agree to an ambiguous definition of the One China principle and hold a dialogue, the same framework can revive talks now. However, given Taiwan's contentious political atmosphere and Beijing's deep suspicion of Chen's intentions, his proposals are not likely to make any major impact on reducing tension in the Taiwan Strait.