SM LEE: A word of caution: There is a point beyond which no Chinese leader can survive if Taiwan is seen to be drifting away under his watch. What Chen Shui Bian did at his press conferences after he won on the 18th of March was positive. He put markers day by day delineating his position, holding out the hope of a change from the fixed position of Lee Teng Hui. But because he had raised expectations by the many kites he had flown, the total impact of his carefully crafted inaugural speech was less than if he had reserved some of the key points for his main speech. Still it was enough to hold the position for the time being. He left the door open for a future one-China and gave no grounds for any precipitate action. However it wasn't enough to make Beijing’s leaders shake off the belief they put to my prime minister in April, that this is the Lee Teng Hui era without Lee Teng Hui.

The mainland will comb through Chen’s speech and all his other remarks. As is their practice, there will be a review, probably during the annual gathering of leaders at Beidaihe, their seaside resort, this August. They will read the analyses and weigh their options. My guess is they will continue to "wait and see". After the U.S. presidential election has settled who will be the next president, they will re-consider their position. Of course, in the meantime, things will not stand still. It could get worse. On the other hand, it could move towards an easing of the situation, so that it is not made more difficult for both sides to get off their high horses and talk. It is better to talk than to trade statements in the press.

REVIEW: What damage does this aggressive, insistent stance on Taiwan do to China's image in the region in terms of the security of the rest of the countries in Asia?

SM LEE: Regional countries all support the one-China policy because they want to avoid what they fear is a costly and unnecessary conflict. They are concerned that the present stand-off makes China develop its amphibious and air forces to compel Taiwan to talk about reunification. Whether or not these forces are eventually used is another matter.

REVIEW: So, this would focus the minds of the Taiwanese?

SM LEE: Well, I did not understand their leader, Lee Teng Hui. So I kept away from the problem. For China, Taiwan was one of a dozen important problems. Lee Teng Hui’s achievement has been to make Taiwan China’s over-riding problem. Chen Shui Bian has unfortunately inherited this position.

REVIEW: He's a creature of it, actually. He came into office because of that.

SM LEE: Yes. As I said to him (Lee), look, if they don't disintegrate, at some point you will have to talk. If they do disintegrate, whatever you have agreed will become invalid. But he was determined to push as far away from China as possible and showed it. Beijing responded by circumscribing Taiwan internationally. Now it's a difficult situation.

The last thing any Taiwanese, even of mainlander descent, desires is to be ruled by China. What for? I was in Hong Kong recently, two and half years after the handover. They don't like to be China Chinese. Many call themselves Hong Kong people. But Taiwan’s international fate was forged at the Cairo conference in 1943 when Churchill and Roosevelt agreed with Chiang Kai Shek the return of Taiwan to China. If the U.S. can keep Taiwan separate from China indefinitely, the Taiwanese would be eternally grateful. But if Americans cannot, it’s cruel to let them believe that they can. Because as a result Taiwanese nationalists are set on the creation of a different national identity. This will make the eventual adjustment, whether in twenty or fifty years, that much more painful. They are indigenizing themselves, emphasising a separate and different identity, re-writing school textbooks to reverse 50 years of the Republic of China's Nationalist government’s sinicizing of Taiwan. That change was intended to over-write the preceding 50 years of Nipponization. I've been through the same process. I've sung the British national anthem, God Save the Queen; I've sung the "Kimigayo", the Japanese anthem; I sang the Malayan anthem; and I now sing my own anthem. It's a wrenching experience each time - your sense of self suffers. After he's grappled with this problem for some time, President Chen Shui Bian may come to a different conclusion from Lee Teng Hui. My "feel" of Chen is that he is more pragmatic.

Clearly, the US can choose to fight and probably can defend Taiwan for another ten to twenty years. But for how much longer? Are Americans prepared to pay the price that the mainland is ready to pay? So, all this will end up in tears. It's a cruel game to play with the Taiwanese. Their spirits will be crushed.

After Chen Shui Bian's election I discussed this subject with three sober Americans from different think tanks. One of them said if the Chinese use force, Americans would have to react. I replied, "Let us assume your superior technology knocks the Chinese military out. Is that the end of the story?" The other think tanker said, "That's the beginning of the story". He's thought it through. Then you've made an implacable enemy. A humiliated, bitter and xenophobic China will be determined to prove the Chinese people are neither cowards nor inferior. It will poison relations in the whole region. We will have an ugly, nasty Asia-Pacific.

REVIEW: So it is incumbent on Chen to stop this indigenizing?

SM LEE: Lee Teng Hui started this. I fear Chen won't be able to stop it so easily. Such movements have a momentum of their own. But Chen has got to convince the mainland that he is not de-sinicizing Taiwan and trying to erase its cultural and historic links with China. He should leave the door open for a future one-China.

This is not a profound analysis, but one which has been deliberately ignored by the western media. So how many people think in these terms in Taiwan? The top three to four percent? It will be a crushing blow when the whole thing has to go into reverse.

REVIEW: You also seem to be saying that those people who are

encouraging Taiwan should back off.

SM LEE: Do not hold out false hopes that could lead to miscalculation by Taiwan's leaders. Why not encourage the positive, a peaceful resolution of the problem. It will take time. A 50-year-old problem cannot be solved without a process taking many years. But if there is no hope of eventual reunification, and Taiwan keeps on indigenizing and drifting away, there will be a moment of truth. Jiang Zemin does not want to be blamed as the man who lost Taiwan. So for the present, he is willing to be flexible, to have Taiwan and the mainland both be parts of one China, and leave Taiwan to run its own show.

REVIEW: So then it's a question what China becomes.

SM LEE: That’s the crucial issue. I told Chiang Ching-kuo in mid-1980s: "Why are you stopping your Chinese from going over?" I made that same mistake until I visited China in 1976. I knew after that visit how stupid I was to rely on intelligence reports that Singaporeans would be subverted if they visit China. Any Singaporean visiting China would know that it's not for him. I said to Chiang, you've the opportunity to influence China's evolution. You've got professors who can go over and hold business management classes - they don't need translators for the lectures. Influence the next generation. They will change to fit into the world.

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