Washington's arms deal with Taiwan threatens US-China relations

China's relations with Taiwan under review

Beijing has claimed sovereignty over self-ruled Taiwan since Mao Zedong's forces won the Chinese civil war in1949. China has threatened to attack if Taiwan - regarded as a renegade province by Beijing - tries to formalize its de facto independence. Despite recognizing Taiwan as part of China since 1979, the United States remains Taiwan's biggest ally and is obliged by the 1979 Taiwan Relations Act to sell the island weapons it needs to defend itself.

China has not ruled out military action against rebellious Taiwan

"The baseline is still that China will use force in case Taiwan claims independence," said Holslag. "Beijing sees the current pro-China administration in Taipei as a unique opportunity to draw the island into its orbit. But if both sides fail to reach consensus on the terms of closer economic cooperation or the political status of Taiwan, a next election might entirely alter the atmosphere and bring China and Taiwan back to the trenches."

"But indeed, America also continues to see the Taiwan Strait as its first line of defence. In many ways, support forTaiwan is a matter of demonstrating that the US is still a resident military power in Asia," Holslag added.

However, Gudrun Wacker believes that Taiwan is unlikely to come under any heightened threat from China over the US arms deal.

"So far, Beijing's criticism of the arms deal is only directed at the US, not to Taiwan," she said. "It is likely that both sides will continue their efforts to talk to each other."

"And of course, Taiwan and international actors like the United States and also the European Union are interested in such a solution as well," she added. "Due to the strong economic integration which has taken place over the last decades, no side can be interested in a military escalation of the situation. For China, military action will therefore be the last resort."

US deal could backfire for unpopular President Ma

China is already expected to punish Taiwan over the recent arms announcement by suspending economic exchanges, though it has yet to say exactly how cross-Strait cooperation will be affected.

Taiwan's Ma has made a dramatic u-turn with this latest US arms deal

The US deal may also undermine Taiwan's flagging President Ma Ying-jeou who came to power in 2008 on a platform of promoting detente with China. After unseating the island's previous pro-independence government, Ma agreed to historic trade and transit deals with China, opening direct flights and welcoming tourists.

But Ma's popularity has fallen in polls over the last six months due to his ineffectiveness in dealing with the aftermath of a deadly typhoon in August and other internal policy decisions.

"Taiwan is now more then ever torn apart by persistent suspicion of an eventual hostile takeover by mainland China and the political elite's charm offensive towards Beijing," said Holslag. "The current government prioritizes closer economic ties and political dialogue, but the majority of the Taiwanese people want to keep a distance and avoid becoming China's 23rd Province."

Ma's acceptance of the US weapons deal will be seen as a response to opponents in Taiwan who accuse him and his Nationalist Party (KMT) of getting too close to Beijing ahead of parliamentary by-elections in late February.

However, angering China will also put in jeopardy the essential trade deals Ma attempted to seal in fulfillment of his election promises

Experts believe that China won't cancel trade talks with Taiwan but minor exchanges might be delayed, cancelled or rescheduled with a proposed free-trade deal due to be negotiated early this year, which would drop tariffs in hundreds of sectors, possibly being pushed back as far as 2011.

Author: Nick Amies

Editor: Rob Mudge