Taiwan is one of democratic Asia's most impor­tant nations: It has a bigger population than Austra­lia, a larger GDP than Indonesia, and an advanced technology base second only to Japan's. Taiwan is America's eighth largest trading partner and sixth largest agricultural customer. For over a half cen­tury, Taiwan has been one of America's important defense and intelligence partners, first as a bulwark against the Sino-Soviet alliance and now as a part­ner monitoring China's expanding strategic pres­ence in the Pacific.

But this partnership is in peril as Taiwanese pol­iticians and voters sense--rightly or wrongly--that America's commitment to their democracy is wavering. In a vicious circle, an uncertain U.S. commitment undermines Taiwan's consensus on its own defense, which in turn annoys U.S. leaders and policymakers.

Washington must now contemplate how its position in Asia would change if Taiwan were to slip into China's sphere. If Washington intends to maintain America's historic strategy of keeping "Island Asia" out of the hands of "Mainland Asia," it must reassess its policies toward Taiwan and adopt a set of policies that enhances U.S. interests.

Taiwan: Part of China? The central policy ques­tion for Washington is whether to accept that Tai­wan is "part of China" as Beijing insists or to maintain--as President Ronald Reagan did in 1982--that the people of Taiwan will decide their future relationship with China. The U.S. position since the end of World War II has been that "as Tai­wan...[is] not covered by any existing international disposition, sovereignty over the area is an unset­tled question." In 1982, President Reagan reaf­firmed this position, and all subsequent U.S. Administrations have affirmed this stance. Yet in recent years, official Washington has averted its gaze whenever Beijing declared its right to retake Taiwan by force.

Taiwan's Strategic Value. Taiwan is a key (albeit unofficial) American defense and intelligence part­ner in the Pacific astride vital sea lanes. Taiwan's military has been America's second best cash cus­tomer (after Saudi Arabia) for defense equipment and services nearly every year for the past 15 years. However, the Pentagon must also face the reality that limiting Taiwan to a purely defensive posture vis-à-vis China is horrifically--and needlessly-- expensive. An effective strategy requires that Tai­wan have the deterrent offensive capacity to inflict serious pain on Chinese military targets.

Would it matter if, through benign neglect or otherwise, Washington acquiesced to Taiwan's absorption by China? China threatens war if Tai­wan does not submit, but would Beijing settle for Taiwan? If Beijing's threats of war were successful in breaking Washington's commitments in the Taiwan Strait, what would prevent China from declaring at some point that Japan's continued occupation of the Senkaku Islands means war?

Until Asia's democracies can rest assured that Beijing does not seek military preeminence in the region, U.S. strategists should resume their historic objective of keeping "Island Asia" out of the hands of "Mainland Asia."

Is Taiwan a threat to peace? Given China's myriad territorial claims on India, Japan, South Korea, and its other neighbors, one must ask whether China's war threats would end with Taiwan. Moreover, given China's reliance on international manufactur­ing supply chains, war is clearly no more in China's interests than it is in America's interests. Colin Pow­ell observed that "whether China chooses peace or coercion to resolve its differences with Taiwan will tell us a great deal about the kind of relationship China seeks not only with its neighbors, but with us." In this sense, Taiwan is a touchstone of Amer­ica's commitment to democracy in Asia.

Taiwan Defense Cooperation with China? In 2005, a top Taiwan politician and Chinese leader Hu Jintao issued a joint communiqué declaring that "military conflicts shall be effectively avoided so long as there is no possibility that Taiwan moves toward 'Taiwan independence.'" Today, some Tai­wan politicians call for a peace agreement with China whereby Taiwan would agree that it is part of an undefined "one China," and they suggest that the U.S. wants this as well. Still others hold that Taiwan does not need to defend itself from China.

With Taiwan's defenses becoming obsolete while China's military modernization accelerates, Tai­wan's military can no longer rely on its technologi­cal edge to defeat a Chinese attack. Taiwan's 2007 defense budget faces a mid-January deadline for passage in the opposition-dominated legislature and still faces the prospect of major program cuts. Nonetheless, Taiwan politicians who advocate a defense accommodation with China certainly must see that it would supplant any security relationship with the United States or other Asian democracies.

What the United States Should Do. If the "glo­bal expansion of democracy" is indeed a pillar of American foreign policy in Asia, the U.S. should:

Counter Beijing's relentless campaign to iso­late Taiwan by strengthening U.S.-Taiwan trade ties with a U.S.-Taiwan free trade agree­ment and by encouraging other democracies to include Taiwan in international health, trans­port, nonproliferation, counterterrorist, and humanitarian relief efforts.

Lend moral support to Taiwan's democracy. Admit publicly that America has a stake in the survival of Taiwan as a democracy regardless of China's territorial claims.

Bolster Taiwan's offensive military capacities. The Pentagon should admit that Taiwan's strat­egy, based purely on defensive systems, is expensive and lacks the deterrence of a second-strike, counterforce capability.

Conclusion. America's strategic position in Asia is approaching a tipping point vis-à-vis China. Some believe that America's only interest in Taiwan is to ensure peaceful resolution of the Taiwan issue--a policy in which process trumps outcome. In 1945, President Harry Truman declared a "strong, united and democratic China" to be one of "the most vital interests of the United States." Two out of three is not good enough. Until China is democratic, the most vital U.S. interest must be to maintain America's strategic posture in the Western Pacific, and Taiwan is essential to that strategy.

--John J. Tkacik, Jr., is Senior Research Fellow in China, Taiwan, and Mongolia Policy in the Asian Studies Center at The Heritage Foundation.