The latest statement of the Chinese government about Taiwan - that it will resort to force if Taiwan indefinitely delays negotiations on reunification - is at best an unsettling move in the long controversy over the fate of that island. It adds to an already tense and uncertain atmosphere and raises anew questions about China’s real intentions. While many of these tensions are rooted in the past, the next phase in the evolution of the Taiwan issue will have a profound impact on security and stability in Asia.

Taiwan as an issue in Sino-American relations began with the Chinese civil war and the retreat of Chiang Kai-sheks forces from the mainland to Taiwan in 1949 amid domestic charges in the United States about who lost China. At that time, antagonism against the People’s Republic of China and support for Taiwan were two sides of a single coin.

Hard on the heels of this opening crisis came the Korean War and China’s intervention, extending the conflict and deepening the estrangement. This phase continued for two decades. It was accompanied by a military affiance between the United States and Taiwan, which we treated as the legitimate government of China, and included crises over the islands of Quemoy and Matsu and the planning of the first US ballistic missile defense system, the Sentinel- Safeguard system, against a putative Chinese missile threat.

The Taiwan issue entered a second phase in 1972, when the imperatives of the Cold War overwhelmed decades of bitter US-Beijing hostility and President Nixon made his historic trip to China. At that point the Taiwan issue had to be redefined in the context of a new bilateral relationship. That was artfully done in the Shanghai Communiqué. It is easy to miss the significance of this document, which consists largely of independent statements by each side sandwiched between bland beginning and ending joint statements. In it, the US side acknowledges that all Chinese on both sides of the Taiwan Strait maintain that there is one China and Taiwan is part of it. The US government does not challenge that position. It reaffirms its interest in a peaceful settlement by the Chinese themselves. With this statement, Washington and Beijing succeeded in putting the issue of Taiwan’s status on the back burner.

Two other Sino-American communiqués, together with the Shanghai document, make up the trilogy governing the transformed bilateral relationship. The first, issued in 1978, dealt with normalization of relations and specified that the Beijing regime is the sole government of China.

The second, agreed in 1982, dealt with US arms sales to Taiwan. In it, the United States affirmed that it has no intention of infringing on Chinese sovereignty and territorial integrity or interfering in China’s internal affairs or pursuing a policy of two Chinas or one China, one Taiwan. It further specified that US arms sales to Taiwan will not exceed, in qualitative or quantitative terms, the level of those supplied since the establishment of diplomatic relations, and they would gradually be reduced, leading to a final solution.

In between the second and third communiqués, the United States enacted the Taiwan Relations Act, further defining the new, trilateral relationship. It declared that normalization of US- Chinese relations rested on the expectation that the future of Taiwan will be determined by peaceful means and that efforts to determine its future by other than peaceful means would constitute a threat to the peace and security of the Western Pacific area and would be of grave concern to the United States. It also stated that the United States would supply Taiwan with defensive weapons.

All three members of this now triangular relationship prospered under the regime of the three communiqués and the Taiwan Relations Act despite occasional squabbles and continuing US arms sales beyond the terms of the 1982 communiqué. Taiwan has enjoyed double-digit growth while evolving from a military dictatorship to a democracy. China has experienced record prosperity, transforming its economy and the lives of ordinary Chinese, and is taking the first steps toward its own political evolution. The United States has benefited from the resulting regional stability and rapid increase in trade.

This second phase lasted essentially until the events of Tiananmen Square in 1989 brought the bilateral relationship once again into question. Adding to the impact of Tiananmen Square was the end of the Cold War, resulting in the disappearance of the anti-Soviet rationale for the bilateral relationship. In addition, time had affected other aspects of the situation. Taiwan was becoming a democracy, and the native Taiwanese majority did not necessarily share the views of the mainlanders about the relationship to the mainland. Indeed, the old Taiwanese dream of return to the mainland was itself fading as veterans of the civil war gave way to a new class of technocrats and business people. On the mainland, a growing sense of Chinese pride and nationalism filling the vacuum left by the fading appeal of communism was making Taiwan an increasingly sensitive and potent issue for Beijing’s leaders to manage.

Finally, the significance of the communiqués and the reasons for their importance was also fading from memory, especially in the US Congress. One very recent development has been the approaching feasibility of ballistic missile defense and its potential impact on the military issues surrounding Taiwan.

As a result of these factors, Taiwan has once again become a flash point between the United States and China. Two incidents in particular have inflamed emotions. The first began with the 1995 visit of Taiwan’s President Li Teng-hui to his alma mater, Cornell University, to give a speech. That visit, which violated understandings governing such activities by Taiwanese officials, was handled badly by the administration. The Chinese themselves overreacted crudely and heavy-handedly. The upshot was the Chinese firing missiles off Taiwan and a confrontation with two US aircraft carriers near the Taiwan Strait.

Tempers frayed. Above all, the Chinese became directly and painfully aware, reinforcing their analysis of the Gulf War, of their military inadequacies compared with the United States. More immediately, this event probably heightened both a Chinese sense of national resentment and Beijing’s interest in enhancing missile deployment along the Taiwan Strait and modernizing its military. It also rekindled US awareness of the fragility of the Taiwan bargain and the role Taiwan plays in mainland politics. The latest flap over China’s expanded threat to use force should be seen in this light.

The second incident was a statement in the summer of 1999 by President Li that subsequent discussions with the Beijing regime should take place on a special state-to-state basis. This pronouncement came perilously close to the Chinese red line that a declaration of independence by Taiwan would be intolerable and would force China to take military action.

Recent developments in the military sphere have also inflamed the atmosphere. There is active discussion in the United States of the possible deployment of ballistic missile defenses in Asia, perhaps to include Taiwan. And a bill called the Taiwan Security Enhancement Act, which would provide enhanced military aid and cooperation, has passed in the House of Representatives.

All of these developments are the stuff of crises. For the United States, the Taiwan issue remains a powerful interest not only in its own right but also for the future of US-Chinese relations, for the US position in Asia, and for peace, stability, and progress in the region. For the Chinese, the resolution of the Taiwan issue will mark either the end of 150 years of humiliation or yet a further humiliation. It is not likely that China could at this point conquer Taiwan, but it could devastate the island with missiles, mount a blockade, or take more subtle action that could largely destroy Taiwan’s economy. Any of these options would present the United States with an exquisitely difficult problem.

The independence scenario poses a cruel dilemma for the Chinese as well. The fundamental reason the Chinese will not renounce the use of force against Taiwan is the fear that if they did, Taiwan would announce its independence. But the threat of force is contrary to the Chinese goal of reunification, which can take place only if the Taiwanese find that prospect attractive. Threatening the use of force is hardly the way to win the hearts of the Taiwanese.

Taiwan’s presidential elections in March could open a new and more promising phase in the evolution of the Taiwan issue. While President Li Teng-hui himself seems willing to test the limits of Chinese forbearance for his own political purposes and his legacy, the three principal candidates to replace him, including Chen Shui-bian of the pro-independence Democratic Progressive Party, have been exceedingly cautious in their comments about cross-strait relations. Polls of public sentiment in Taiwan indicate little support for reunification but little as well for provoking a confrontation with mainland China.

What can the United States do? There are a number of steps which, taken together, might improve the atmosphere, facilitate progress, or at least reduce the chances of a military confrontation. First, inform Taiwan that the United States would support Taiwan in the event of an unprovoked attack but will not give the Taiwanese a blank check to drag us into a conflict by taking actions (such as a declaration of independence) that we know would provoke a Chinese attack. Second, urge the Chinese to renounce the use of force so long as Taiwan does not declare its independence. Third, ask Taiwan to renounce any intent to declare its independence. And fourth, get both sides to reaffirm their adherence to the principle of one China, with each side free to interpret that phrase as it wishes - that is, with no preconditions for negotiations.

Pursuing a strategy along these lines should improve stability, would reduce pressure on both sides for continuing an arms buildup, and perhaps induce the Chinese to look more favorably on the Taiwanese desire for greater international space. The resulting atmosphere could also be conducive to a search for innovative solutions, such as a confederal structure that might consist of some fairly vestigial (at least initially) entity above both the PRC and Taiwanese structures that would symbolize one China.

The possibility of progress is visible, but the possibility of catastrophe is at hand. It will take the best efforts of all parties to nourish the former and avoid the latter.