Source: The Straits Times

Not too long ago, the nightmarish scenario of an armed conflict between mainland China and Taiwan captured the attention of East Asia. After winning his re-election to the presidency under controversial circumstances in March 2004, Taiwan's Chen Shui-bian began a high-stakes gamble to test China's bottom line. He not only escalated the rhetoric about making Taiwan a 'normal nation', but also backed up his words with a plan to hold an island-wide referendum on a new Constitution as a legal vehicle to solidify Taiwan's permanent separation from mainland China.

Two years later, things could hardly be more different. The spectre of a war across the Taiwan Strait has receded. In the much improved Sino-American relationship, the contentious Taiwan issue no longer dominates the agenda. In fact, Taiwan was largely an afterthought in recent high-level exchanges between Chinese and American leaders. Topping the discussions between Washington and Beijing today are more pressing global and regional security issues: curbing North Korea's nuclear ambition, pressuring Iran to give up its plans for uranium enrichment and, more importantly, searching for a new framework for US-China relations.

The reduction of tensions across the Taiwan Strait comes as welcome news to East Asia.

In the past year, a combination of developments has turned the tide against the pro-independence Democratic Progressive Party (DPP). The political fortunes of the DPP, which rose to power in 2000 by championing a new Taiwanese identity and recklessly challenged the fragile status quo in the Taiwan Strait, has been waning. Its leadership has lost credibility, both with a majority of Taiwan's voters and with Washington. Indeed, two years before he moves out of the presidential palace in Taipei, Mr Chen is struggling to stay relevant. Broadly speaking, three seismic changes since President Chen's re-election victory two years ago have greatly altered the short- to medium-term political landscape both in Taiwan and across the Taiwan Strait.

First, alarmed by Mr Chen's thinly disguised ploy to seek de jure independence through the passage of a new Constitution enacted by a plebiscite, Taiwan's voters decided to end the President's gambit by refusing to give the DPP a majority in the island's legislative chamber (a condition which would be necessary to give a new Constitution any realistic chance of passage) in the watershed election of December 2004. The DPP's electoral nemesis, the so-called pan-blue alliance, consisting of two opposition parties - the Kuomintang and the People First Party – that advocate a moderate approach to mainland China, managed to retain its slim legislative majority. This stunning rebuke by Taiwan's democratic process halted the momentum of the pro-independence movement almost overnight.

Constrained by an opposition-controlled legislature and rising public discontent with his poor governing record, President Chen lost his ability to set Taiwan's policy agenda and direction. Of course, things went from bad to worse at the end of last year when the DPP suffered a massive defeat in local elections.

Second, China's new leadership adjusted its Taiwan policy in two dramatic directions. On the one hand, Beijing's new leaders concluded that they must make their threat of military action credible. Consequently, the mainland accelerated military preparations for a conflict with Taiwan in light of Mr Chen's vow to pass a new Constitution. Chinese leaders also set in motion a legislative process to obtain pre-authorisation for the use of force - which culminated in the passage of an 'anti-secession law' in March last year.

On the other hand, China's President Hu Jintao coupled the threat of the use of force with a charm offensive, inviting the leaders of Taiwan's main opposition parties to visit the mainland and offering a package of economic benefits and goodwill gestures (a pair of pandas) to Taiwan. While wooing the Taiwanese opposition and business community, Beijing also intensified the isolation of Mr Chen, refusing to deal with him unless he accepts the 'one China' principle, which stipulates that the mainland and Taiwan both belong to the same China.

Caught offguard by Beijing's 'panda offensive', Mr Chen's government was unable to counter the mainland's new policy initiatives and could offer no reassuring message to a Taiwanese public that had grown increasingly weary of the DPP's divisive ethno-nationalist policies and was interested in returning the cross-strait relationship to a more stable footing.

Third, President George W. Bush, perhaps the most pro-Taiwan American president in history, re-adjusted his policy in late 2004. Although the Bush administration approved the largest arms package for sale to Taiwan in 2001 and substantially upgraded ties with Taiwan in the past five years, Washington was greatly alarmed by Mr Chen's apparent strategy of taking advantage of US support and seeking a dangerous confrontation with mainland China. Obviously, the United States has no interest in fighting for Taiwan's de jure independence even though it continues to deter China from seeking reunification through military means.

In addition, with its strategic attention focused on Iraq, the war on terrorism, Iran and North Korea, the Bush administration needs China's cooperation on a wide range of issues and wants to prevent a needless conflict between the mainland and Taiwan. Washington has also grown increasingly impatient with Mr Chen, who has surprised the Bush administration on numerous occasions with statements that were viewed as irresponsible, fickle and reckless. Consequently, Washington cooled its support for Taipei and became explicit in its opposition to the so-called 'unilateral change of the status quo', a veiled reference to Mr Chen's plans to alter Taiwan's constitutional and political status.

The cumulative effects of these developments significantly undermined Mr Chen's effectiveness and increased his frustrations. Struggling to regain the political initiative after the DPP's disastrous performance in last December's local polls, Mr Chen recently reshuffled his government. He appointed two heavyweight loyalists, Mr Su Tseng-chang and Ms Tsai Ing-wen, as Premier and Vice-Premier respectively. Both are viewed as hardliners on China policy.

Defying public expectations that, chastened by his party's electoral losses, he would adopt a more conciliatory tone towards the mainland, the Taiwanese President has apparently decided to escalate tensions with Beijing (and Washington) again. In the past month, Mr Chen has vowed to tighten cross-strait trade and investment, scrap the symbolic National Reunification Council, seek admission to the United Nations under the name 'Taiwan' (not the Republic of China) as well as enact a new Constitution through a plebiscite. All these steps, if carried out, would re-ignite tensions across the Taiwan Strait.

Mr Chen conceivably could benefit from the tensions because these acts would energise his base and allow him to dominate Taiwan's policy agenda again. It is too early to tell whether Mr Chen's gamble will pay off. So far, Beijing has reacted coolly to his latest provocations, relying instead on Washington to restrain Taipei. The Bush administration, surprised again by Mr Chen's pronouncements, has made its irritation public and criticised Taipei for trying to change the status quo. But in Taiwan, Mr Chen's confrontational stance has failed to rally the public. For the short term, his gambit has got him enough public attention to show his political relevance.

But given the enormous practical difficulties of turning his ambitious and risky plans into reality in the remaining two years of his much-weakened presidential term, even Mr Chen's most hardened supporters must concede that they have an uphill battle ahead.