Appearing to accommodate Taiwan may moderate the attitudes of the new administration and Congress to China. Mr. Chen's government is obstructed by an opposition-dominated legislature and hampered by inexperience and disunity within its ranks. Its weakness is to Beijing's advantage. Despite steady growth and a massive trade surplus, a sense of economic vulnerability has emerged in Taiwan. The stock market has been hurt by the end of the technology boom and by fear of a U.S. downturn.
Opportunities appear better in China than in America or at home.
The influence of former President Lee Teng-hui has faded. Leadership of the Kuomintang, and other opposition parties, is again dominated by people of mainland origin. Beijing thus has more room to exploit political divisions within Taiwan. Given this background, Beijing can afford to drop threats and talk sweetly while using its economic muscle. Taiwan business leaders sympathetic to Mr. Chen and with investments on the mainland have come under pressure to lean on his government.