In his 2006 New Year's speech, President Chen Shui-bian addresses cross-Strait issues, domestic priorities, including constitutional reform, and discusses the issue of Taiwan identity. Chen highlights the emergence of a "Taiwan consciousness" on the island, and proclaims that "issues concerning national identity are an inescapable reality that must be confronted and addressed." He asserts that the sovereignty of "our country, Taiwan" is "vested in its 23 million people" and declares that "only the 23 million people of Taiwan have the right to decide Taiwan's future." He identifies China's growing military power as an "imminent and obvious threat" and urges the Legislative Yuan to pass the special military procurement budget to increase Taiwan's weapons purchases. Chen also warns of China's "three [legal, media, and psychological] war" strategy, calls China's "soft tactic" a "mere deception," and claims they both are designed to undermine Taiwan's "fighting will."
Chen also expresses concern over the Taiwan economy's reliance on the Chinese market. In the process, he reverses the previous formulation for Taiwan's economic engagement with the mainland —"active opening, effective management"— by asserting the need for "proactive management and effective liberalization" to mitigate the risks of cross-Strait economic ties.
Chen also asserts his intention to pursue six major reform priorities (previously mentioned in a speech on October 10, 2005): financial reform, tax reform, reform to change the preferential interest rates of 18 percent, media reform, investigation and reclamation of assets improperly acquired by political parties, and constitutional reform. Chen reaffirms he will seek to hold a referendum on "Taiwan's New Constitution" before the end of his term of office in 2008.