China has two strategic crosses to bear:

  1. Many people across many gov't and private organizations want the 2008 Olympic games to come off without a hitch
  2. Falling fertility rates (One-child Policy) from the late 70's on mean that each piece of the military's cannon fodder has a high probability of being someone's only child.

Cross #1 means China doesn't want any internal disturbances like economic strife or dislocations of people. Avoiding economic risk means China won't change its exchange rate policy from a managed currency to an unmanaged floating currency. This maintenance of status quo should extend from the mundane like taxation to the precarious like restrictions on where people can work. The latter restriction also helps ameliorate the flow of people off farms into cities, one of the major dislocations of people China is managing. The other likely dislocation of people would be northern North Koreans leaving Korea for northern China were North Korea's government to collapse for whatever reason. I expect more meaningless table talk between China, the Koreas, Japan, and the US.

Cross #2 indicates that China will not attack another country unless the military has popular support. Otherwise I would expect mass desertions. Given this, I expect China to be militarily inactive unless attacked.

These two strategic crosses provide an opening for Taiwan. As China develops, it will eventually envelop Taiwan by dominating its exports/imports. Taiwan currently does not know how future governments of China will look (neither do I, witness the radical changes from Mao to Deng). Taiwan may take advantage of the current strategic opening to declare complete political independence.