In Taiwan, an ongoing nation-building process is threatening peace and stability in the Taiwan strait and in the wider Asia-Pacific region. Under the impact of Chinese irredentism and the mobilisation successes of Taiwanese nationalism, a Taiwanese ethnic nation now seems on the rise. This nation claims to represent a historically grown community of fate (Schicksalsgemeinschaft) and an authentic Taiwanese culture. At the same time, it rejects the “one China” principle and the idea of a unitary Chinese state.

The pro-unification parties of the “pan-blue camp” are structurally handicapped in this situation because they have to adhere to Taiwan’s sovereignty claim if they want to stand a realistic chance of winning a national election again. Meanwhile, the “pan-green camp” pursues a vigorous nationalist agenda and engages in the cultural and national reconstruction of Taiwan as a non-Chinese nation.

In this situation, only a flexible interpretation of the “one China” principle by the Chinese government which guarantees Taiwan substantial internal and external sovereignty, and hence goes beyond the conceptual limits of the Hong Kong model of “one country, two systems”, may resolve the current cross-strait impasse. Integration seems to be the only permanent way of settling the conflict between the two sides of the Taiwan strait. This presupposes the mutual recognition of two sovereign entities and partners striving for the realisation of economic and political integration as a win–win game. Under current circumstances, however, only the US military forces can maintain a precarious peace in the Taiwan strait.