Extremists on both sides, assisted by overwrought media coverage, wanted to build the incident into a major Chinese-U.S. confrontation. It should be a reminder, however, of the real issues on which the relationship could founder, the economic and strategic ones. They will continue to generate a barrage of sometimes blood-curdling invective from Beijing. But that is more the result of China's frustrations at its lack of leverage than a real threat. There is little that China can do by way of forced resolution of the Taiwan issue for at least a decade.
Economic issues are more immediately dangerous.
A breakdown here would also have huge repercussions for the global trading and financial systems and thus can be considered a major U.S. security issue. One the face of things, a breakdown may seem a remote prospect. China's entry into World Trade Organization is assumed to be a done deal. As underlined by a recent World Economic Forum meeting here, U.S. corporations are continuing to invest heavily in China's future, and from the Chinese side the momentum of reform is being sustained. China's progress seems to justify those in the United States who argued that opening the vast U.S. market in the early stages of China's reform, long before entry into WTO became a possibility, has paid off.