THE triangular face-off involving Taiwan, China, and the US - a holdover from the cold war - is clouding the peace in prosperous Asia.
Angered at what it sees as a challenge to its unity and control, Communist China is using missile tests and conducting ''live-fire'' military maneuvers to intimidate democratic Taiwan ahead of its March 23 presidential elections.
As senior leader Deng Xiaoping fades and market-style reforms replace Marxism, the Chinese leadership is invoking deep-seated nationalism to stay in power. Beijing claims sovereignty over Taiwan and views it as a renegade province. It worries that if Lee Teng-hui (now Taiwan's appointed president) wins the election, he will further the cause of independence for the island.
Economically powerful Taiwan sees itself as a de facto country deserving more international prestige and autonomy. But it respects the mainland's might and denies a desire to split formally with China.
Caught in the middle is the United States, a long-time Taiwanese ally with official diplomatic ties to China. Although Washington has tried to play down tensions, it is concerned about conflict in the region and this week dispatched two aircraft carriers to the narrow Taiwan Strait as a warning to China.
The confrontation between the two is rooted in an unfinished civil war suspended by China and Taiwan more than four decades ago and that still simmers today.
The ties that bind
TAIWAN has been intertwined with Chinese nationalism and aspirations of unity since the early 17th century. First named Ilha Formosa, or beautiful island, by Portuguese explorers, the island was colonized by Europeans and later taken over by China. In 1895, Japan overwhelmed China's imperial armies and won Taiwan. Japan held the island until its World War II defeat. The Nationalists under Gen. Chiang Kai-shek, who ruled China at the time, took over Taiwan and brutally suppressed ethnic Taiwanese leaders.
After the Communist's won China's civil war in 1949, the defeated Nationalists under Chiang and almost 2 million others fled to Taiwan. China unsuccessfully tried to retake two Taiwan-controlled offshore islands - Quemoy and Matsu - in 1958.
As China emerged from decades of political trauma and isolation in the early 1970s, Taiwan's international standing slipped. It lost its UN seat in 1971 and was expelled from the World Bank and International Monetary Fund in 1980.
For years, Taiwan barred contact and compromise with the Communists. Then, in the late 1970s, the cold war with the mainland thawed, and unofficial trade between the two started to grow.
In 1987, Taiwan lifted its ban on travel to China, opening the door for expanding economic ties. Today, it is an international economic power, the mainland's second-largest investor, and a major trade partner.
But China has watched Taiwan's moves toward democracy and international recognition with growing alarm. When Taiwanese President Lee Teng-hui made his landmark visit to the US last June, China worried the popular leader would steer Taiwan toward formal independence. Military pressure and intimidation have mounted since then.
Taiwan and the US
FOR 30 years, Taiwan was a cold war client-state of the US. The Korean War and China's backing of North Korea forged strong ties between Taipei and Washington and led to patrols by US warships in the Taiwan Strait.
For years, Taiwan enjoyed massive American economic and military assistance and was able to build its present powerhouse economy. But in 1979, the US broke with Taiwan and recognized Communist China.
Yet, even after breaking off relations, the US maintained strong unofficial ties with Taiwan. The US Congress passed the Taiwan Relations Act, which provided for continued economic and military relations with Taipei.
Under pressure from China in 1982, the US agreed to reduce arms sales to Taiwan and reaffirm its ''One China'' policy - that there is only one China, that Beijing is its government, and Taiwan is a part of it. But arms sales and American links to Taiwan continue.
Dictatorship to democracy
EVEN as the government officially backs reunification with the mainland, Taiwan is moving to take its own place in the world. For decades under Chiang, Taiwan was run as a brutal dictatorship controlled by mainland Nationalist politicians.
After Chiang's death, his son, Chiang Ching-kuo, launched Taiwan on the path to democratic reforms.
President Lee Teng-hui, who took over in 1988, has shepherded the political process through dramatic political change that will culminate in the first direct presidential election on March 23.
Mr. Lee, the first native Taiwanese to be head of state, has come to symbolize Taiwan's new aspirations. While he hasn't dropped the Nationalists' traditional support for reunification, he says that China must undertake democratic reforms first.
FACTS ON TAIWAN
Area: 13,900 square miles, a little larger than the state of Maryland; comprises one large and several much smaller islands.
Population: 21 million
Per capita gross national product: $12,640
Official language: Mandarin Chinese. But Taiwanese, a dialect based on the language of Fujian Province, is widely spoken.
1895: China cedes Taiwan to japan.
1945: At end of World War II, Taiwan is returned to China.
1949: Chinese civil war ends; Communists win. Defeated Nationalists under Chiang Kai-shek withdraw to Taiwan.
1958: China shells Taiwanese islands Quemoy and Matsu.
1971: Taiwan loses its seat in UN to the mainland People's Republic of China (PRC).
1971: Taiwan Relations Act signed. The US sets forth a vague commitment to defend Taiwan.
Feb. 1972: President Nixon visits mainland China.
Jan. 1979: US and PRC establish diplomatic relations; US ends official relations with Taiwan.
Sept. 1986: Taiwan's first opposition party, the Democratic Progressive Party, formed.
Oct. 1987: Taipei announces repeal of a 38-year ban on visits to the mainland.
Jan. 1988: Lee Teng-hui becomes Taiwan's first president born in Taiwan since Nationalists took power.
May 1990: Taiwan lifts martial law, in place since 1949.
1990: President Lee implicitly recognizes the PRC.
June 1995: US issues visa to President Lee for private visit to US, enraging China.
July 1995: China fires six missiles close to Taiwan.
March 1996: China holds war games off Taiwan to influence March 23 election.