While the United States and many European nations have recognized Kosovo’s declaration of independence from Serbia, China has indicated it will avoid any precedent that could be applied to Taiwan.

In fact, in 2005 China’s National People’s Congress passed an “anti secession law” which said: “Both the mainland and Taiwan belong to one China. China’s sovereignty and territorial integrity brook no division.” This anti secession law explicitly gives the Chinese government the authority to “employ non-peaceful means and other necessary measures” should Taiwan unilaterally declare its independence.

With Kosovo’s declaration, Taiwan is once again on the front burner as an international issue. The Taiwanese presidential election in March 2008 and the referendum on United Nations’ admission offer stark evidence that Taiwan’s ambiguous status will be given careful examination.

Much has changed in the China-Taiwan relationship in the last few decades. For one, China-Taiwan trade was at roughly $120 billion in 2007 up from $2 billion at the end of the 1980’s. More than half of Taiwan’s outbound investment goes to China putting Taiwan in the position of either number four or five in direct investor status on the mainland. Moreover, somewhere around 25 million Chinese are employed in Taiwanese businesses on the mainland leading to a level of integration that could not have been imagined a decade ago.

Surely this integration moderates, to some degree, China’s military buildup across the straits. But China’s adamant position vis-à-vis Taiwan overlooks the current reality.

Taiwan is an advanced economy that recently replaced Australia as the 16th most wealthy nation on the globe. It’s population of 23 million people is larger than three-quarters of the nations at the United Nations. It’s role in the design and manufacture of the I-Phone among other advanced consumer products is the envy of most Asian states. And since 1988, when martial law was suspended, it has had a vibrant democracy and vigorous competition between the Kuomintang (KMT) and the Democratic Progressive Party (DPP).

The idea that Taiwan is a “renegade province” – an expression often used by Chinese leaders – overlooks the evolution of this island nation. At the outset, when Chiang Kai Shek took six million adherents to Formosa, there was little doubt these people identified themselves as Chinese who at some point had a vision of returning to the mainland. Over time, however, this identification has changed.

Today, when asked the question of identity more than 70 percent said they are Taiwanese. Not only has Taiwanese nationalism effloresced, but the disparity between Taiwan’s per capita income of $28,000 and China’s at $1800 stands as a vivid reminder to Taiwanese that communist leadership in China is not what they want to embrace.

While the KMT is somewhat more accommodationist in its stance toward China than the DPP, it is not willing to modify the status-quo. What it does suggest is that tourism and cultural ties should be encouraged in order to promote further understanding with the vague suggestion that is the future (some distant future) the two states may be united.

By contrast, if one may call it a contrast rather than a nuanced position, the DPP embodies the nation’s newly discovered nationalist fervor. It argues that Taiwan has more to offer China than the reverse. Former President Chen engaged in rhetorical flourishes about independence that alarmed the White House and infuriated China. But these comments were more a reflection of de facto nationalism rather than de jure separation.

Taiwan’s stance is in fact an ambiguous one between independence and reunification. If independence were actually declared, it might serve as a casus belli for China. If reunification were to be a short term policy, any Taiwanese government advocating it would fall. Hence there is a delicate minuet between the two rival positions with neither in the ascendancy, despite an occasional minor tilt in one direction or the other.

There is a growing international perspective that time is on China’s side, but I see it differently. Fissures in the Chinese economy and a totalistic political system indicate that dictatorial party control and the free market are incompatible. Should China go through a form of democratization, the Taiwan question could easily be addressed. A democratic China might hold genuine gravitational pull for Taiwanese who despite nationalistic sentiment still retain transcendent ethnic ties to China. Or more likely, a democratic China would simply maintain close relations to Taiwan with the latter serving as a political model to be emulated. Perhaps under these circumstances a confederation could be entertained.

Therefore the key to the resolution of the so-called Taiwan Straits issue is patience on the part of Taiwan and a belief that at some point liberalization in China will open a host of opportunities. Continued...