By Ralph A. Cossa

Now what? Now that Taiwan has elected Chen Shui-bian of the Democratic Progressive Party (DPP) as its next President, despite heavy-handed Chinese efforts to discourage such an outcome, what does Beijing do next?

The official answer coming from the mainland's leadership is "we must wait and see." But, when asked what they are waiting for or what they hope to see, Chinese officials seem unclear. Beyond futile hopes that Chen will

somehow endorse a "one China" policy that accords with Beijing's definition - and the prospects of this happening are slim to none - people in Beijing seem at a loss for words. It's too bad this speechless condition did not strike them sooner. Even the most ardent Taiwan critics privately acknowledge that the overabundance of very harsh words by President Jiang Zemin and Premier Zhu Rongji in the days immediately before the election now makes it much more difficult to seek or find common ground with the soon to be installed DPP government.

This is not to argue, as some now imply, that Beijing's rhetoric contributed to a Chen victory. My guess is that for every vote of defiance Beijing's posturing generated for Chen, there was likely one (or more) counterbalancing nervous vote for Lien Chan or James Soong, especially given the Kuomintang (KMT) campaign slogan echoing (in even less subtle tones) Beijing's message that "a vote for Chen was a vote for war." KMT corruption, not Beijing's banter, brought down the ruling party candidate Lien Chan. The KMT's smear campaign against former KMT official and independent candidate James Soong managed to tar Lien Chan with the same brush.

Ironically, had the party that brought democracy to Taiwan been more democratic in its process of selecting Lee Teng-hui's successor, it would likely still be in power. The belief that Lee Teng-hui was more intent on keeping James Soong from gaining power than he was in ensuring that the KMT retain power lies at the heart of the protests that have forced Lee to resign as KMT President even before his term as Taiwan's first democratically-elected president ends on May 20th. Soong finished a close second to Chen (39% to 36%) and well ahead of Lien Chan (23%) in the presidential race.

Meanwhile, Chinese officials still argue - and I believe this is more than just "spin" - that Beijing saw the need, regardless of who ultimately won, to lay down its marker against "independence" actions in advance of the election. As it became more and more apparent that Chen might win - Nobel laureate Lee Yuan-tseh's March 10th endorsement of Chen is pointed to as the turning point by many PRC analysts - the sense of urgency in delivering this message increased. The good news is that, since the election, Beijing has refrained from making matters worse. "We have no choice, we must learn to deal with Chen Shui-bian" has been a common refrain during my discussions with Chinese officials and security analysts, who also acknowledge that "even Chen is an improvement over Lee Teng-hui."

But, almost every person I talked to in Beijing was pessimistic about the future; some were remarkably candid in their doubts that their own leadership could develop a coordinated, coherent policy to deal with Taipei more effectively. "Wait and see" seems directed as much at the Beijing government as it is at the newly-elected one in Taipei.

One thing is clear, future progress in cross-Strait relations will require a new formula. Leaders in Beijing are now being forced to confront the reality that almost everyone in Taiwan has long recognized. Namely, that "one country, two systems" - the formula used to incorporate Hong Kong and Macau back into the mainland - will never work for Taiwan. What's needed is a new construct that permits Beijing's "one China" policy and Taipei's quest for equal or "special state-to-state" relations to coexist. This is difficult, but by no means impossible.

Chen has been very cautious in his pronouncements on cross-Strait policy. If, as DPP officials have hinted, he successfully removes the clause in the DPP party platform that advocates the establishment of a "Republic of Taiwan," this must be seen as a significant olive branch. He also promised not to seek a revision of Taiwan's constitution or an independence referendum, two significant DPP policy reversals. In another important conciliatory gesture, Chen has also intimated that he is willing to talk about "one China." "As long as we are treated as equals," Chen has pledged, "there is nothing we cannot discuss." This dovetails nicely with Beijing's expressed view that "as long as a one China is acknowledged, all things are possible." (Even Beijing's incendiary February 2000 "White Paper" on Taiwan showed flexibility regarding Taiwan's "equal status" concerns.) In truth, Beijing has long been willing to go back to the good old days when both sides agreed to disagree on what "one China" meant; they just want to keep this fig leaf in place.

At this point, Beijing must understand that Chen has limited flexibility in dealing with cross-Strait issues, and that he also has higher, more urgent priorities (like figuring out how to govern). Nonetheless, there are a few additional steps Chen can take to send positive signals to Beijing. He can ask the highly respected Taiwan elder statesman Koo Chen-fu to stay on as head of the Straits Exchange Foundation (SEF) in charge of cross-Strait dialogue with the mainland's Association for Relations Across the Taiwan Strait (ARATS). Chen's invitation to ARATS Chairman Wang Daohan to attend his inauguration will no doubt be rejected. But Chen could still propose an early meeting between Koo and Wang, perhaps in some neutral location such as Hong Kong or Singapore, to "discuss conflicting interpretations of a one China." This would provide further evidence that Chen has not rejected "one China" as a basis for discussion, even if he cannot accept China's interpretation of this principle.

President-elect Chen could also call for a comprehensive review of Taiwan's defense needs, including a realistic assessment of current and likely future threats, and stress that any decision regarding Taiwan participation in theater missile defense (TMD) will be contingent on this review. He could also urge the U.S. Congress to withhold action on the Taiwan Security Enhancement Act (TSEA) pending completion of this study (while calling off Taiwan's lobbyists who continue to vigorously push for its passage). This would defuse several potentially explosive issues. It would also remind Beijing that a renewal of threatening gestures will have consequences.

Beijing's wait and see attitude is a step in the right direction. The key to future reconciliation, however, rests in the PRC leadership's ability to recognize and then positively respond to the positive gestures that are already emanating from Taipei. Chen appears intent on developing his own brand of "sunshine policy" toward Beijing. How successful this will be will depend, in the final analysis, on whether Beijing recognizes and at least silently applauds Taipei's conciliatory gestures or whether it decides, more in keeping with past practices, to shoot at the doves carrying Chen Shui-bian's olive branches. Hopefully, Beijing will decide wisely.

Ralph A. Cossa is Executive Director of Pacific Forum CSIS.