Beijing, which has in the past branded Lai as a "dangerous separatist", responded hours later saying that "Taiwan independence is a dead end".
In his inauguration speech, Lai directly addressed the threat of war following years of growing pressure from China to bring democratic Taiwan under mainland rule.
Lai said a "glorious era of Taiwan's democracy has arrived" and thanked citizens for "refusing to be swayed by external forces, for resolutely defending democracy".
"In face of the many threats and attempts of infiltration from China, we must demonstrate our resolution to defend our nation and we must also raise our defence awareness and strengthen our legal framework for national security," said Lai, 64.
Having previously described himself as a "pragmatic worker for Taiwan independence", Lai has moderated his rhetoric on the issue in recent years.
On Monday, he said his government would "neither yield nor provoke, and maintain the status quo" -- a balance that preserves Taiwan's sovereignty while not declaring formal independence.
"I also want to call on China to cease their political and military intimidation against Taiwan," Lai said.
He urged Beijing to "share with Taiwan the global responsibility of maintaining peace and stability in the Taiwan Strait... and ensure the world is free from the fear of war".
Lai has made repeated overtures to resume high-level communications with China, which Beijing severed in 2016 when his predecessor Tsai Ing-wen took power.
On Monday Lai said he hoped China would "choose dialogue over confrontation", and called for Beijing to restart tourism and allow Chinese students to study in Taiwan.
Hours after his speech, Beijing's foreign ministry called "Taiwan independence... a dead end."
"No matter under what guise or banner, the pursuit of Taiwan independence and secession is doomed to fail," said spokesman Wang Wenbin.
- US support -
Taiwan has been self-governed since 1949 when nationalists fled to the island following their defeat by communist forces in a civil war on mainland China.
For more than 70 years, China has considered Taiwan as part of its territory and has long threatened to use force to bring the island under its control.
The United States switched diplomatic recognition from Taiwan to China in 1979 but remains the island's most important partner and biggest arms supplier.
Lai is expected to further boost defence ties with Washington during his four-year term.
US Secretary of State Antony Blinken on Monday congratulated Lai, saying he was looking forward to Washington and Taipei deepening ties and maintaining "peace and stability across the Taiwan Strait".
As Lai took office, Chinese state media reported Beijing imposed sanctions on three US defence companies over their sales of weapons to Taipei, while social media platform Weibo blocked hashtags referencing the inauguration.
Chinese warplanes and naval vessels maintain a near-daily presence around the island, but in recent days there has not been a significant uptick in the numbers.
Lai and Vice President Hsiao Bi-khim -- Taiwan's former top envoy to Washington -- are both part of the Democratic Progressive Party (DPP), which has championed Taiwan's sovereignty.
China has dubbed them an "independence duo".
- 'Expand investment' -
With only 12 formal allies, Taipei lacks diplomatic recognition on the world stage.
Eight heads of state who recognise Taiwan attended Lai's inauguration ceremony.
More than 40 other countries, including the United States, Japan and Canada, also sent delegations.
Taiwan has its own government, military and currency, and the majority of the 23 million population see themselves as having a distinct Taiwanese identity, separate from the Chinese.
"I think it is better not to be too close to China or too far away from China -- it is better to maintain a neutral feeling," said Shen Yujen, 24, who is part-way through his four-month military service.
Domestically, Lai faces another challenge after his DPP lost its majority in the legislature in the January elections, meaning it will be hard for him to push through his policies.
Many Taiwanese are less worried about the threat of conflict than they are about soaring housing prices, rising costs of living, and stagnated wages.
Lai on Monday vowed to "expand investment in society" and ensure the island becomes a "force for global prosperity".
China warns after Lai inauguration that Taiwan independence is 'dead end'
Beijing (AFP) May 20, 2024 -
China warned on Monday that efforts towards independence for Taiwan were a "dead end" after the island swore in new President Lai Ching-te.
China considers Taiwan part of its territory and has long threatened to use force to bring the island under its control.
It has described Lai as a "dangerous separatist" for his past comments on Taiwan's independence -- rhetoric that he has moderated in recent years.
Asked about his inauguration Monday, foreign ministry spokesman Wang Wenbin warned: "Taiwan independence is a dead end."
"No matter under what guise or banner, the pursuit of Taiwan independence and secession is doomed to fail," he added.
As Lai took office, Beijing imposed sanctions on three US defence companies over their sales of weapons to Taipei.
Chinese social media site Weibo also blocked hashtags referencing the inauguration, preventing them from trending on the platform used by hundreds of millions in China.
Ahead of the inauguration, Beijing's Taiwan Affairs Office said that "Taiwan independence and peace in the strait is like water and fire".
Lai Ching-te: from coal miner's son to Taiwan president
Taipei (AFP) May 20, 2024 -
Rising from a humble coal-mining town to assume Taiwan's highest office on Monday, President Lai Ching-te now faces the challenge of navigating a widening rift with an increasingly assertive China while grappling with a fractious parliament at home.
The 64-year-old Harvard graduate swept to the presidency in January's elections on the promise he would defend Taiwan's democracy and resist Beijing's claims on the island.
In his inaugural speech Monday, Lai called on Taiwanese to "come together to safeguard our nation" against China's threats to bring the island under its control.
"We must demonstrate our resolution to defend our nation," he said, warning Taiwan "must not harbour any delusions" about Beijing's goal.
Lai has vowed to continue his predecessor Tsai Ing-wen's policies of building up Taiwan's military capabilities as a deterrence against a potential invasion from China.
But his outspokenness -- which he has moderated in recent years -- has drawn Beijing's ire.
China regards him as a "stubborn worker" for Taiwan's independence and a "saboteur of peace", warning that the veteran politician would be the cause of "war and decline" for the island.
- 'Duty' to democracy -
While Lai has made repeated overtures to resuming dialogue with China -- severed since 2016 -- he is likely to be rebuffed.
Beijing "will not respond positively to him any more than it did to Tsai", said Steve Tsang, director of London's SOAS China Institute.
"The real issue is how Lai will adjust his approach, once the open arm he is likely to extend to Beijing is met with a cold -- or worse -- response."
Unlike most of Taiwan's political elite, Lai rose from a humble background.
Born in 1959, Lai was raised by his mother alongside five other siblings in a rural hamlet in New Taipei City, after his coal miner father died when he was a toddler.
After he graduated from Harvard University in public health, he worked in a hospital in southern Taiwan before turning to politics in 1996 during the Third Taiwan Strait Crisis.
"My defining moment came as China's military adventurism... threatened our shores with live fire exercises and missiles," he wrote in an op-ed for The Wall Street Journal last year.
"I decided I had a duty to participate in Taiwan's democracy and help protect this fledgling experiment from those who wished it harm."
He served as a lawmaker, a mayor of the southern city of Tainan and a premier before he was tapped to be vice president to Tsai.
Lai and Tsai belong to the Democratic Progressive Party (DPP), which has championed Taiwan's sovereignty.
Under Tsai's two-term tenure, relations with China plummeted, with all high-level communications cut off.
Lai has stuck to Tsai's stance that Taiwan is "already independent", and does not need to formally declare itself separate from China.
But the loss of the DPP's majority in parliament in January's poll means Lai will struggle to push through his policies.
- 'A professional politician' -
During Lai's time as premier, he was more vocal than Tsai about independence, which some say has top partners like the United States -- Taiwan's main weapons provider -- concerned about how he will handle relations with China.
But political science professor Luo Chih-mei, from National Taipei University, said Lai was unlikely to make "complicated moves during a US election year".
Brookings Institution senior fellow Ryan Hass said Lai was not "a wild-eyed zealot with a one-track-minded focus on Taiwan independence".
"He is a professional politician who has organised his career around becoming Taiwan's president," Hass wrote in a report.
"Now that he has ascended to Taiwan's top elected position, he will want to win reelection."
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