Strait talking on Taiwan

Hardliners in Washington, Beijing and Taipei continue to warn of an explosive military confrontation between China and the US as Taiwan's short-fuse presidential election draws close. But growing evidence suggests hawks on both sides are purposefully exaggerating the risks. Rather than threatening war, China is increasingly relying on non-military means to bring its "renegade province" to heel.

Pentagon officials regularly ring alarm bells over the Taiwan Strait. Thomas Fingar, a senior intelligence official, told Congress this month "the danger of that (Taiwan) spinning out of control is real". After terrorism, China posed the biggest potential threat, he said.

China's deployment of over 1,000 short-range missiles opposite Taiwan and its rapidly expanding submarine fleet handily illustrate an overall military build-up that planners fear will soon challenge US dominance in the Asia-Pacific region. For its part, the People's Liberation Army Daily newspaper called for further big and "urgent" increases in China's $45bn (£22.8bn) military budget.

Cynics may suggest military establishments on both sides are using Taiwan to justify budgetary demands and weapons programmes. A more concrete reason for concern is the tense stand-off in Taiwan where the Democratic Progressive party (DPP) of the retiring, pro-independence president, Chen Shui-bian is facing political oblivion at the hands of the pro-China Nationalist party, Kuomintang (KMT).

Nerves are fraying. Lin Chen-wei, a senior adviser to Chen's national security council, said China's president, Hu Jintao, recently visited missile bases and instructed the Second Artillery "to be ready at any time to take military action against Taiwan". For his part, Suchi, a KMT campaign manager, claimed the DPP might be planning to stage a mock military incident in the Taiwan Strait to scare voters.

Attention grabbing though they are, both sides' doom-and-gloom scenarios ignore strategic and economic realities, diplomats and academics say.

One is the unprecedented level of diplomatic cooperation between the US and China attained since Hu replaced Jiang Zemin at the helm in Beijing. Bilateral political and military exchanges are now at the highest level ever since the Chinese revolution. While they often disagree, the two countries are discussing international issues such as North Korea, Sudan, terrorism and Iran in a way that only a few years ago would have been nigh impossible.

A decline to 19% in the number of Taiwanese who support de jure independence meanwhile reflects strengthening economic, social and cultural links. Taiwanese businesses have over $100bn invested in the mainland. Both presidential candidates promised at the weekend to develop direct-air links with China and promote trade and people-to-people ties.

Lin Chong-pin, president of the International and Cross-Straits Foundation in Taiwan, argues that the real, often unnoticed trend in Taiwan-China relations is not towards military conflict but towards ever closer cooperation, fostered principally by Hu's switch towards non-military methods of "recovering" the island. In short, he says, China has renounced counter-productive threats of force and discovered "soft power".

"A number of [Chinese] policies have remained consistent," Lin said. These included the Straits missile build-up, efforts to deny Taiwan "international living space" by curbing its diplomatic and institutional ties, and insistence on the "one China principle".

But at the same time Hu had scrapped Jiang's unification timetable, de-emphasised military solutions, soft-pedalled "anti-secession" measures, encouraged political and economic contacts with the KMT and business groups, and "actively reached out to scholars, journalists and artists" in Taiwan.

In an internal high-level party meeting in August last year, Lin said Hu told the People's Liberation Army that its "major task" remained war with Taiwan. But he warned war would entail several major negative consequences: it would potentially ruin the 2008 Beijing Olympic Games, disrupt China's foreign relations, damage its international reputation, reduce external investment, impair its economic development and modernisation programmes - and cause a lot of casualties.

Even once the Games finish in August, Hu's other reasons for pursuing a non-military solution will still hold good. And while the Chinese president remained determined to bring Taiwan back into the fold, he had perfected another "soft power" method of applying - and defusing - pressure, Lin said. When Taiwan's behaviour caused concern these days, Beijing simply complained to Washington. US arm-twisting usually did the rest.

US post-ideological thinking appears similarly pragmatic. With so much else on its plate in the Middle East and Afghanistan, and with its reliance on China's financial and diplomatic goodwill growing, the last thing the Bush administration wants is a flare-up in the Taiwan Strait.

More than in the past, and even as the hawks mouth and fume, China, the US, and most Taiwanese are finding common ground for peace. In the longer term, barring major crises or miscalculations, a Hong Kong-style autonomy compromise beckons.

Simon Tisdall