Tuesday, July 20, 1999 Published at 15:35 GMT 16:35 UK
Understanding Taiwan's tactics
Taiwan soldiers: Ready for action
By BBC Regional Analyst Sanya Bunnag
The official Chinese media say China's armed forces have been put on high alert since President Lee Teng-hui of Taiwan announced last week that Taiwan's ties with the mainland should be treated on a state-to-state basis.
President Lee, meanwhile, has said that he is not seeking independence for Taiwan but has insisted it is time for Beijing to recognise the island as a separate state on an equal footing.
The latest dispute comes after what had appeared to be a warming of relations in recent months, and looks like a replay of the crisis in 1995-96.
Then, President Lee's visit to the United States resulted in China staging war games and firing missiles over the Taiwan Strait and the US sending warships to the region.
Beijing's relations with Taipei had improved since that stand-off.
This autumn, Taiwan is due to receive the senior Chinese negotiator with Taipei, Wang Daohan. The visit could now be in jeopardy, although significantly China has not yet cancelled the trip.
So why has Taiwan challenged the status quo which has allowed it to exist as a de facto independent state for nearly five decades?
Analysts say that it is probably a combination of domestic, bilateral and international politics.
On the domestic front, presidential elections are due next March. President Lee may want to show to the Taiwanese people that the ruling Kuomintang party will not shy away from discussing the thorny issue of independence.
The pro-independence opposition has said that the issue will be the top priority if it wins the elections.
And opinion polls show that its nominated candidate, Chen Shui-bian, could defeat Vice-President Lian Chan, who is expected to be nominated for the presidency by the Kuomintang.
President Lee's statement could also be seen as a diplomatic manoeuvre to put the ball in Beijing's court.
If Beijing allows Wang Daohan's visit to go ahead, it could be interpreted as a recognition of the sovereign status of the island.
But if the trip is cancelled, Taiwan can accuse China of obstructing cross-straits dialogue.
On the international front, President Lee's remarks could be seen as directed towards the US.
Relations between Beijing and Washington have been under strain, particularly since Nato's accidental bombing of the Chinese embassy in Belgrade.
However, the US has indicated that it wants to heal the rift. And there have been suggestions by some US officials that Taiwan should enter into substantive negotiations with China.
Taipei is anxious to resist such pressure, because it fears such negotiations could effectively force it into unification talks.
Taipei would prefer to negotiate on such issues as illegal immigrants and crime first, before turning attention to the larger points.
President Lee must have known that Beijing would react with its usual fury to any suggestion of statehood for Taiwan.
By raising the stakes at this sensitive time, he may have hoped that the US would be left with no option but to side with Taiwan against a belligerent Beijing.
So far, though, Washington has been at pains to play down the war of words. Only time will tell whether President Lee will win this political game of poker.