Recent geo-economic and strategic trends have contributed to new inter
est in the Republic of China (ROC) on Taiwan as a regional power. Taiw
an has long been well-regarded for its economic success. Its central l
ocation makes it important: it is al the crossroads of any emerging Pa
cific economic community in East Asia. Now the ROC is also emerging as
a regional military power worthy of note. Rather than Peking (Beijing
) being in a position to dictate the terms of an ROC surrender, Taipei
seeks to be in a position where it can negotiate reunification with P
eking as an equal and yet fend off reunification pending the transform
ation of Chinese Communism. The ROC aims therefore to demonstrate a mi
litary capability to destroy an invading force before it reaches the R
OC territory. The ROC's air force and fleet modernization programs are
particularly impressive. Yet the last decade has seen clear signs of
flexibility toward Taiwan by the mainland, and vice versa. The two sid
es hold almost routine talks on a broad range of issues. Mainland Chin
a is Taiwan's fastest growing export market. Taiwan is also a major in
vestor in mainland China. Whether mainland China proves to be, with Ta
iwan's input, the only successful experiment in the transformation of
a Communist system remains to be seen. The people of Taiwan are optimi
stic. However, their insurance policy is the maintenance of a strong a
ir and naval defense capability.