HOW can tiny Taiwan, with 20 million people, negotiate on equal terms with a government that rules more than a billion? "Island China" occupies a space smaller than Florida; the mainland People's Republic of China (PRC) is as large as the United States. Fear that it would be overwhelmed, along with a deep dislike for Chinese communists, long held back the Taiwan government from any direct dealings with Beijing.
Both sides discarded their inhibitions and met recently in Singapore. Representatives from Taipei and Beijing disagree on many things, but they have agreed to meet on a regular basis.
To be sure, Taipei still refuses official contacts with Beijing. The Singapore meeting was ostensibly between two "private" organizations: the Straits Exchange Foundation in Taiwan and the Association of Relations Across the straits in mainland China.
The Republic of China (ROC) has proved its staying power. Chiang Kai-shek "lost" mainland China, but he and the Kuomintang made a new start in Taiwan. The foundations for rapid economic growth were laid in the 1960s and '70s and resulted in annual growth rates above 10 percent in the '70s and '80s. By the mid-1980s, Taiwan's horde of foreign currency approached $80 billion, the largest in the world on a per capita basis.
Taiwan in the '80s became not only an economic but a political model of development. Income differentials narrowed significantly, both in the countryside and in the city.
The wealthy became richer, but so did the rest of the population. In 1986 President Chiang Ching-kuo lifted martial law; opened the gates to investment and trade with the mainland; and permitted a genuine opposition party to compete with the Kuomintang and win seats in the legislature.
Mr. Chiang responded to three factors. First, Taiwan businessmen wanted to put their capital to work in the huge mainland market. They wanted to use the cheap labor available there and establish factories, including polluting ones, for which there was little room in Taiwan.
Second, older Chinese on Taiwan wanted to visit their relatives and birthplaces before it was too late. The place of sentiment cannot be overestimated in intra-Chinese developments.
Third, Taiwan's overall fitness exceeded China's. This made China the suitor, and it also helped Taiwan to consider dealing with Beijing, despite its small stature.
The rapprochement of island and mainland China is a welcome tendency in a world marked by parochial fanaticism. Chinese nationalists and communists have decided to talk and deal with each other pragmatically, putting aside old dogmas and well-founded distrust of each other. Both sides see that benefits must be mutual or the deal is off.
One may hope that Hong Kong's future is also settled on the basis of mutual advantage. For now, that is unclear. Dogma and national pride - and the defenseless condition of Hong Kong compared to Taiwan - tempt Beijing to hang tough.
But where will PRC-ROC relations be a decade hence? There are too many unknowns to predict, but here are five scenarios:
1. Return to confrontation. This seems unlikely, but could be triggered by a number of possible developments: Taiwan resents Beijing's handling of Hong Kong and breaks off private contacts. PRC mobilizes and threatens. Southern China breaks away from Beijing. Taipei develops an atomic bomb for insurance.
2. Independence for Taiwan. Confrontation cuts the incentives for further rapprochement. Taiwan's new opposition party gains control of the legislature and rams through a declaration of independence. Europe and the ex-Soviet republics expand their burgeoning commercial links with Taiwan into semi-official ties.
3. De facto "Two Chinas." Island and mainland China follow parallel evolution rather than convergence. Each goes its own way, unable or afraid to become more like the other side. Taiwan does not want to incur the costs of merger; the Chinese communists fear ideological pollution. Each side gives up pretense of one China.
4. Taiwan becomes an autonomous province of China. This is more likely if Beijing permits Hong Kong to develop autonomously and if a southern China trading area becomes more coherent and successful.
5. More of the same. ROC does not merge and does not become independent. Ties increase with PRC on all levels, but without any formal change in status. ROC gains entry into GATT and World Bank, but Beijing holds China's seat at the UN and other international organizations.
More of the same seems most likely for the near term, but Beijing and Taipei have taken many steps that stunned the world.
Within a decade we should know if they will move in duetto or solo.