TAIWAN is playing the uneasy and potentially dangerous role of pushy upstart to an ascendant China.
In less than a decade, this island economic powerhouse has moved from military dictatorship and diplomatic pariah-state to a fractious democracy and informal partner of governments officially linked to its rival, Communist China.
A cold-war ally of the US, Taiwan is demanding more overt support from its long-time patron and is challenging China's claim to what Beijing considers a renegade province. As China asserts itself in the region and bids for stature as a world power, Taiwan looms as a crucial test of Chinese ambitions and superpower rivalry in Asia, Western and Asian analysts say.
Taiwan ''is seen as an important litmus test of China policy in general.... Will [China] be a responsible power or an irresponsible power?'' asks Harry Harding, a China specialist at George Washington University in Washington, D.C. ''It is a very important factor in US-China relations and, if the situation were to deteriorate, it could become a major factor with other countries, too, particularly Japan.''
Few of Asia's many territorial disputes are so emotionally charged and carry such high stakes as the contest across the Taiwan Strait. Ever since victorious mainland Communists chased Gen. Chiang Kai-shek and his Nationalist forces to the small island in 1949, both governments have claimed to be heirs to a future reunited China. Officially still at war with the island, Beijing threatens to use force should Taiwan ever declare independence.
But Asia's waning cold war, Western rapprochement with Beijing, and economic transformation on the mainland have softened past rigidities. Taiwan is intertwined economically with the mainland and, through quasi-official organizations, talks directly to Beijing about fishing rights, transportation links, and other issues in what could be a prelude to future political negotiations.
Washington's balancing act
Official recognition of Beijing in 1979 and continuing military and informal diplomatic ties to Taipei have thrust Washington into a delicate balancing act across the Taiwan Strait. In Taiwan, the US is still widely considered the main military buffer against a coercive mainland, followed by Japan, which enjoys close ties to Taipei and could easily become a player in a USChina standoff.
Once China reabsorbs British-controlled Hong Kong in 1997, Taiwanese expect their island to move to the top of Beijing's agenda. But a reduced American military presence in Asia, isolationist sentiment in the United States, and Washington's accommodation of powerful Beijing have left many here wondering where Washington will side in a standoff.
''The Americans are not so foolish as to put themselves in the position to be arbiter,'' says a Western diplomat in Taipei. But ''they're not about to pack up their tents and go home after all these years.''
''The US doesn't want to have to choose between Taipei and Beijing,'' says Diane Ying, editor of the respected Commonwealth monthly in Taipei. ''The US doesn't want to have to send soldiers anywhere. I don't think the US has that kind of stomach anymore.''
To the worry of some US officials, Taipei's tampering with the cross-strait status quo is compelled by democratic changes initiated by the US. Since Chiang Ching-Kuo, son of modern Taiwan's founding father, Kai-shek, lifted martial law in 1987 and launched the passage from dictatorship to democracy, government opponents have often pushed to declare independence, and the empowered middle class has demanded international recognition of the island's economic clout and emerging national identity.
Still clinging to its dream of reunification with the mainland, the ruling Kuomintang, or Nationalist Party, nevertheless has been forced to acknowledge public sentiment and has taken steps toward political autonomy. Cash-rich Taipei is waging a highly symbolic campaign to win a seat in the United Nations and a more serious effort to enroll its powerful economy in the new World Trade Organization before China does.
A pragmatic president
Lee Teng-hui, Taiwan's highly popular president who has forsaken the Kuomintang's rigid insistence on reunification for pragmatism and flexibility, travels the world in search of a higher Taiwanese profile. A native Taiwanese, Mr. Lee last year met Southeast Asian leaders on golf courses and in resorts in what was dubbed ''vacation'' diplomacy and last month swung through the Middle East without the hoopla normally accorded heads of state.
''The government here is under a lot of pressure to work out our international relations and protect our interests,'' says Chi Su, an official of the Mainland Affairs Council, which handles official policy with China. ''We are not anyone else's province. We are our own.''
The initiative has alarmed and befuddled China and nudged President Clinton to upgrade Taiwan relations, albeit at a cost to his own quest for less-volatile mainland ties. Last December, in what was the second Cabinet-level visit to Taiwan in two years, US Transportation Secretary Federico Pena stopped in Taipei. A month later, an angry Beijing canceled Mr. Pena's scheduled visit to China.
Since the Republican election sweep last November in the US, Taiwan has enjoyed a better hearing in Washington from powerful anti-China congressmen seeking to make their own mark on Asian policy. While the Clinton administration frets over annoying Beijing, House Speaker Newt Gingrich, Senate Foreign Relations Committee Chairman Jesse Helms (R) of North Carolina, and other backers say a well-heeled and democratic friend like Taiwan deserves better.
In a first test, Mr. Clinton and Congress are at odds over allowing Lee, the Taiwanese leader, to visit the US officially for the first time in June and receive an honorary degree from his alma mater, Cornell University in New York. Granting a visa to Lee, who was denied permission to stop over in Hawaii a year ago, and who has been shut out of many international meetings, has been condemned by China.
More controversial and far-reaching are Republican proposals to revive US arms sales to Taiwan. During the height of the 1992 presidential campaign, former President Bush announced plans to sell up to 150 F-16 fighters to Taiwan to win the votes of Texas defense workers. Advocates of more weapons for Taiwan say such sales bolster the island's defenses and its 240,000-member Army against the almost 3 million Chinese armed forces.
Arms sales disturb balance
But critics say the US pays a price for its Taiwanese arms dealings. Contending such sales violate a USChina 1982 agreement banning arms sales to Taiwan, China has retaliated with less enthusiasm for observing nonproliferation weapons agreements, Western analysts say.
With China increasingly touchy about Taiwan and aggressively pursuing territorial claims in the South China Sea, more arms sales could feed new tensions and break the delicate cross-strait balance, diplomats warn.
''China doesn't have the capacity to occupy Taiwan. What China has is the capability to raise tensions,'' says a Western diplomat in Beijing, predicting US arms sales could toughen China's resolve on Taiwan and alter Japan's defense stance and the military balance in East Asia.
''How does a government like China's assess which weapons keep Taiwan free from coercion and which give Taiwan the ability to declare independence on its own?'' he continues. ''If you make a misstep, the consequences can be severe.''
China views its unpredictable neighbor with growing unease. Relations hit new lows last year after a boatload of Taiwanese tourists were murdered in March 1994, in an arson attack on a lake in Zhejiang Province and Taiwan shelled the Chinese coast in November, later apologizing.
Against the backdrop of uncertainty over succession to the ailing leader Deng Xiaoping and under pressure from a military emerging as a key powerbroker, China's fractious Communists fear appearing too soft on Taiwan and refuse Taipei's demands to renounce the use of force against the island.
''The general principle of 'One China' cannot be bartered. The fact that Taiwan is a province of China cannot be changed,'' senior military leader Liu Huaqing was quoted as saying by the Chinese press.
''It is nearly impossible for Beijing to recognize Chinese independence or rescind the position to use force. Using military means is the last resort if we are left with no other choices,'' says a Chinese analyst in Beijing.
Yet, as both sides of the Taiwan Strait have become economically interdependent in recent years, neither can afford to let relations slide. Taiwanese businessmen have been lured to the mainland by cheap land and labor. Beijing welcomes the investment and hopes economic integration will contain Taiwan's independence movement and foster a pan-Chinese identity.
Since 1989, Taiwan looks to China as its second-largest market after the US, has more than 25,000 businesses operating on the mainland, engages in indirect trade -- most of it through Hong Kong -- of more than $25 billion yearly, and accounts for mainland investment of up to $20 billion. More than 5 million Taiwanese have visited China in the last six years.
This year, the Chinese and Taiwanese leaders have traded conciliatory gestures. In a Chinese New Year speech aimed mainly at securing his tentative leadership status at home, Chinese President Jiang Zemin denounced foreign interference and Taiwanese calls for independence as barriers to ''peaceful reunification.'' But he also urged talks on protecting Taiwanese investment in China, unifying the two rivals, and a meeting between their top leaders.
Lee, his Taiwanese counterpart who endorses a cross-strait summit, but only on condition that Beijing renounce use of force, deftly straddles the mainland issue in Taiwan. The island leader discusses reunification but demands Beijing recognize a divided China. He also avoids provocative talk of independence while acting autonomously, and he pushes for a broader world role for Taiwan while reassuring Beijing as a fellow Chinese.
''Both sides are treading water,'' says James Robinson, a Taiwan political specialist at the University of West Florida in Pensacola. ''It seems as if everything is on hold until they can create a new framework for talking.''
Pending significant political developments on both sides of the strait, no major strides are expected this year, Western and Asian analysts say. China endures a political paralysis due to the failing health of Mr. Deng, the long-time political leader. Taiwan's first direct presidential election, which the popular Lee is likely to win, is scheduled for March 1996.
In the resulting limbo, the Chinese military is exerting key influence on China's relations with Asian neighbors. Earlier this year, China erected structures on the Spratly Islands and challenged the five other claimants to the possibly oil-rich atoll chain in the South China Sea. Also pressing territorial claims in the Spratlies are Vietnam, the Philippines, Malaysia, Brunei, and Taiwan, which recently sent patrol boats into the area.
Western analysts say there are already signals that military hard-liners are at odds over Taiwan policy, with civilian advisors urging greater Chinese caution and flexibility. After Deng, political observers say, the balance could either swing toward moderation and less dogmatic approaches to Taiwan or toward a militant nationalism manipulated by squabbling Communist politicians.
While its military is still modernizing, China has undertaken military exercises along its coast on the Taiwan Strait and is accumulating an arsenal. Recently, Beijing began receiving Russian Kilo-class submarines, which can lay mines and could bolster an economic blockade of the island.
The Spratlies incursion fits a worrying profile of China as ''a regime which tends to aggrandize and to recreate a view of itself as a nation that perhaps never existed,'' says Mr. Robinson. ''Countries in the region are recognizing that this is an increasingly aggressive player whose intentions are to be the second, if not the first, world power.''
In Taiwan, Hong Kong's upcoming transfer to Chinese control is viewed as a bellwether for the island. On the one hand, the integration of the Taiwan and Hong Kong economies with the southern mainland could shape the future with China and eventually lead to a loose Chinese federation or confederation. On the other, short of using military might against Taiwan, Beijing could co-opt Taiwanese businessmen and scare thousands into fleeing abroad in search of foreign passports, as has occurred in Hong Kong.
Fears of being under Chinese economic sway have prompted Taipei to move slowly in forging direct economic contact with Beijing, although the government has breathed easier during the last year as mainland investment fever in Taiwan has cooled and business interests shifted to Southeast Asia.
Separate, not independent
Politically, increasingly sophisticated Taiwanese voters are also gravitating to middle ground, charting a course for the time being of separateness, not independence. The voters' mood has forced the pro-independence opposition, the Democratic Progressive Party, to moderate its stance while the Kuomintang, struggling to survive public anger over party corruption, has quieted its reunification call as Taiwan readies to directly elect a president next year and take another major step toward autonomy.
''We are seeing an emerging convergence of the two. Both sides are moving to the middle,'' says Michael Kau, a political scientist at Brown University in Rhode Island, and head of a private Taipei think tank. ''If the [opposition] increases its influence, as it could in legislative elections later this year, the rhetoric of reunification will be further toned down.''
Those fading reunification prospects scare China, although what dramatically changed Taiwanese minds was not rhetoric but a human tragedy that represents a turning point in cross-strait relations. The murder of the 24 Taiwanese tourists in 1994 in eastern China, widely believed to have been committed by renegade Chinese soldiers, shocked many in Taiwan and underscored how impotent their island government was against the vast neighbor.
Confounding national outrage was the callousness of mainland officials toward the victims' families and Beijing's efforts to cover up the incident. Three men, who were not soldiers, were later convicted and executed for the crime.
''If the Chinese government doesn't give us answers, we will always remember this and feel pain toward China,'' says Chen Ching-tse, whose father was among the victims. ''As Taiwan deals with China in the future, it is important for us to remember this.''
AN ASIAN TIGER ROARS
The Republic of Taiwan has:
* The world's 19th-largest economy.
* The world's 13th-largest trading economy.
* Trade relations with more than 140 countries.
* A total foreign trade of $180 billion. (1994)
* The world's 25th-highest per capita income.
* About $100 billion in foreign-exchange reserves -- second only to Japan.
COUNTRIES THAT RECOGNIZE TAIWAN
Republic of Nauru
Kingdom of Tonga
Central African Republic
St. Vincent and the Grenadines
Source: Republic of China Yearbook, 1995