updated 3/4/2008 1:40:45 AM ET 2008-03-04T06:40:45

China warned Tuesday that Taiwanese President Chen Shui-bian will "pay a dear price" if he continues with pro-independence plans.

The warning came from National People's Congress spokesman Jiang Enzhou at a news conference to announce the agenda for the NPC, which opens Wednesday.

Taiwan and China split amid civil war in 1949. Beijing considers the self-governing island Chinese territory and has threatened military attack if Taiwan tries to formalize its de facto independence.

Chen steps down soon after eight years as president. An election later this month to pick his successor will also include a referendum asking if Taiwan should try to join the United Nations under that name instead of using its formal name of the Republic of China.

China sees the referendum as a step toward formal independence.

"If the Chen Shui-bian authorities should stubbornly continue down the path, they will surely pay a dear price," Jiang said.

He did not explain, other than saying the situation across the Taiwan straight was "grim and complex."

China continues its huge military buildup opposite Taiwan, further pushing the balance of power between the two rivals toward the mainland's favor, the U.S. Defense Department said in its annual report on China's military.

Although the Taiwan Strait remains stable, China is adding more than 100 missiles a year to the estimated 1,000 it has targeting Taiwan. Hundreds of thousands of troops are based opposite the island, and hundreds of planes are ready to make good on China's threat to attack should Taiwan formalize its de-facto independence, the report said.

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