A number of diplomatic and political factors influence the U.S.-Taiwan-PRC relationship. I am going to talk about four:

1. The upcoming change of leadership in the PRC;

2. China's international acceptance or perception as an increasingly credible great power and international competitor.

3. The blossoming of Taiwanese domestic democratic politics and self-identity; and

4. U.S. domestic politics.

But before I get into those, let me start with one general principle to which I subscribe. I subscribe to the notion that today there is no single organizing principle guiding U.S.-China relations.

Unlike during the Cold War, where containing Communism and balancing the power and influence of the Soviet Union guided the Sino-American relationship, the current U.S.-China protocol for handling bilateral issues is being written at every turn, especially as China evolves. Despite this fact, I think that bilateral relations are stable diplomatically.

But back to the factors.

First, the upcoming change of leadership in the PRC will be a factor in the future of U.S.-Sino relations.

Likely presidential successor Hu Jintao's lack of international experience makes the Chinese diplomatic agenda a bit uncharted. Though Hu can be expected to have Jiang Zemin looking over his shoulder, government policies in spite of the change in leadership are likely to remain consistent with the recent past regarding the U.S.

Beijing's policy toward Taipei is likely to remain consistent as well. I would characterize China's Taiwan policy as a comprehensive, but possibly more nuanced and sophisticated, approach of achieving unification on Beijing's terms while wielding an ever-increasingly big stick-that is, the People's Liberation Army (PLA)-and making use of economic leverage based on increasing Taiwanese investment on the Mainland.

This brand of Taiwan policy will continue as long as Jiang and other senior leaders remain on the scene. Indeed, cross-Strait politics based upon economic realities may ensure continuity even post-Jiang, just as internal Chinese economic realities may force the fourth generation leaders to concentrate on the economy and not on Taiwan.

Second, China's international acceptance or perception as an increasingly credible great power and international competitor could well lead to potential threats to U.S. interests, the interests of friends and allies, and peace and stability in the region.

A rise in Chinese nationalism, aggressiveness, or assertiveness toward the U.S., Japan, Taiwan, or Southeast Asia will not contribute to constructive relationships and could undermine stability in the region. This could certainly play out in the South China Sea, as well as vis-à-vis Taiwan or Japan.

In addition, North Korea-heretofore an area for possible cooperation between Washington and Beijing-could become a more nettlesome issue in the bilateral relationship if Kim Jong-il actually does move closer to Japan, or if prospects for reunification on the peninsula improve and the future of peninsula politics comes into question.

Moreover, Chinese perceptions of encirclement or even containment will affect the Sino-U.S. relationship and China's international behavior. Beijing will actively try to "outflank" or at least compete diplomatically for relationships vis-à-vis the United States with its neighbors, especially Russia, Central Asia, Pakistan, India, Japan, Korea-and even Taiwan in the long term-to assure China's ascendance and Beijing's perception of its proper place on the world stage.

The War on Terror has brought closer U.S. diplomatic relations with many of the countries of Asia. China's confidence in its political influence and allure as a rising power has likely been shaken to a certain extent as countries compete to bask in the glow of American might.

China is probably only confident of its influence over continental Southeast Asia, and worries about the growth of American influence in maritime Southeast Asia, South Asia, and current American basing arrangements in Central Asia.

The third factor is a collective of the blossoming of Taiwanese domestic democratic politics, a push for a unique "Taiwanese" identity and the independence sentiment in Taiwan. These factors will undoubtedly affect the future of bilateral and trilateral relations.

Taiwan is a fully fledged democracy and the Democratic Progressive Party (DPP) will continue to be a key political player, as evidenced by recent elections. Whether the DPP continues to hold the presidency after 2004 is a matter of conjecture, but regardless, it is expected that Taiwanese government policies will increasingly reflect the views of the populace.

The growth of a sense of a unique Taiwanese self-identity will affect policymaking and relations with Washington and Beijing. It appears that the time when "Chinese on both sides of the Taiwan Strait say there is but one China of which Taiwan is a part" has already passed. This sentiment will likely affect future events across the Strait.

Taipei will continue to pursue greater diplomatic recognition and participation in international organizations and perhaps even flirt with a formal declaration of independence. But this is more likely to be compelled by PRC behavior toward Taiwan than by some Taiwanese government act of provocation, since most Taiwanese-by my estimation-quite wisely see continuation of the status quo as in their best interest.

U.S. domestic politics, especially in the U.S. Congress, among national security elites and in the business community, will continue to play a strong role in the formulation of U.S. policy and the trilateral relationship.

These important and influential groups will insist that U.S. policy support their perception of American interests on issues ranging from trade to human rights to security and defense policy. This could send mixed messages to both Beijing and Taipei and lead to misperception and miscalculation across the Strait.

Diplomatic Trends and Developments

Let me say a few words about the diplomatic trends and developments that will influence the future of these relationships

The first trend is increased Taiwanese international political isolation, growing democratization, and an increasing sense of self-identity.

If Taipei continues to lose formal diplomatic relations-for example the recent loss of the Pacific island of Nauru-or if the PRC continues to exert pressure to prevent even limited participation in international organizations by Taiwan, there could be a political reaction by the Taiwanese government that is counterproductive to cross-Strait relations-or even U.S.-Taiwan relations for that matter.

After more than a dozen years of free elections, including popular choice of the head of state, democracy, freedom, and rule of law are now ingrained in Taiwan's political culture. These values are here to stay.

Taiwanese policies could cause friction with the Mainland, and even with the United States, as Taiwanese increasingly decide what is in Taiwan's interest-and not that of others-and Taipei pursues a more independent foreign policy based on Taiwan's perception of its own national interest.

Taiwanese movement towards a distinct Taiwanese identity over time could lead to an overwhelming insistence upon de jure independence. At the moment, this is contained by the knowledge that this would provoke a crisis-and probably a military crisis at that-with China. I think this is very frightening to most Taiwanese. But heavy-handed PRC behavior could push Taiwan in that direction.

The second trend is China's increasing international political and diplomatic clout. This is an undeniable dynamic that will drive and shape future relations and events with Taiwan, the U.S., and the region.

Clearly, China's increasing influence can play a positive-or negative-role in the trilateral relationship. If China plays by international standards and norms of conduct and contributes positively to peace, stability, and prosperity, this is obviously good.

But if China puts undue pressure on the regional political system in a quest to further isolate Taiwan or pressure unification, the use of coercive diplomacy could be destabilizing.

Chinese saber rattling or a propensity for the use of force against Taiwan may increase as China perceives that it need not pay due regard to the concerns of others as a result of its increasing national power, especially military power.

Let me say a word about developments. I am only going to talk about one but it is quite current, I think. I see Chinese support-or non-support-for U.S. or coalition actions against Iraq and the war on terror as an important development for the bilateral relationship:

Chinese support-direct, implied, or tacit-for the U.S. in the U.N. Security Council and afterwards in military action in Iraq, if that becomes necessary, could be an important litmus test for the Sino-U.S. relationship.

Chinese failure to support the U.S. on Iraqi disarmament-extending to the principles of non- or counterproliferation and counterterrorism-or the use of force, if required, could lead to a chilly period in U.S.-Sino relations.

The Chinese may try to extract some sort of concession from the United States as a quid pro quo for its vote or abstention in the U.N. Security Council on Iraq. I would suggest that support for the United States in the war on terrorism, perhaps including Iraq, will be a requirement for constructive and productive relations with the U.S.

Alternative Scenarios

Let me say a few words about alternative scenarios of foreign policy or diplomatic behavior arising from these trends and developments. First, China could attempt to make political or diplomatic arrangements exclusive of the U.S., such as a serious, substantive diplomatic rapprochement or partnerships with Russia, Japan, South Korea, and ASEAN, or reinvigorate the Shanghai Cooperation Organization (SCO) to counter growing U.S. influence in the region.

Second, Beijing could take a hard line on U.S.-Taiwan-China relations, forging a confrontational atmosphere, imposing sanctions, or coercing countries that still recognize Taipei.

Third, Taiwan could feel increasingly isolated diplomatically and decide to go its own way and declare independence.

Fourth, China could ask for some sort of diplomatic quid pro quo for support in the war on terror and/or Iraq in order to influence U.S.-Taiwan policy-for example, the PRC could demand the U.S. adhere strictly to the 1982 communiqué and reduce arms sales in exchange for China's support.

My guess is that none of these are likely to happen in the short term due to the value that both Taipei and Beijing place on relations with Washington. Nevertheless, we must continue to watch them, considering these trends and the new security environment.

Elements of a Successful China-Taiwan Policy

As the last part of this exercise, let me talk a little about policy. I believe that current U.S.-China-Taiwan policy best supports American interests and is capable of addressing the potential vagaries in the cross-Strait and the trilateral relationship. Long-standing U.S. policy is flexible and durable enough to manage the challenges that we face and withstand the trends we are seeing.

These are the elements I see as aspects of a successful China-Taiwan policy:

A One China policy in the context of the three communiqués. Adherence to the Taiwan Relations Act, especially maintaining the military balance across the Strait through arms sales, military services, and training. Respecting Reagan's 1982 Six Assurances Not setting a date for the ending of arms sales to Taiwan; Not consulting with China on arms sales; Not playing a mediation role between the PRC and Taiwan; Not revising the Taiwan Relations Act; Not changing the U.S. position on the sovereignty of Taiwan; and Not exerting pressure on Taipei to enter into negotiations with Beijing.

In addition, declaratory policy should be that there should be no unilateral change in the status quo by either party. There should be no use of force by either side. Washington should maintain robust diplomatic relations with Taipei, because Taiwanese actions affect American interests. We should encourage dialogue across the Strait. There should be no U.S. government support for Taiwanese independence. There should be the expectation that Taiwan will act responsibly. Further, we should assist in finding opportunities for greater international representation for the Taiwanese people. And finally, we should encourage political liberalization on the Mainland.

Conclusion

In conclusion, the United States has a very strong interest in the security of Taiwan's democracy and in having a constructive relationship with China.

We are seeing dynamics on both sides of the Strait that seemed inconceivable a little more than 10 years ago. It is going to take a steady hand on the helm of State-which we thankfully have-to navigate these increasingly challenging waters.

But I believe as long as policymakers look to the past with a weather eye to the future, peace and stability in the U.S.-China-Taiwan relationship is possible.

--Peter Brookes is Senior Research Fellow for Homeland Defense and National Security in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. He spoke at a panel on "Taiwan and U.S. Policy: Toward Stability or Crisis," hosted by Senator Joseph R. Biden, Chairman of the Senate Foreign Relations Committee, at the Russell Senate Office Building on October 9, 2002. The panel was organized by the Carnegie Endowment for International Peace, the Asia/Pacific Research Center of Stanford University, the National Committee on United States-China Relations, and the Center for Strategic and International Studies.