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Three of the factors which have disrupted dialogue in the recent past now show some sign of change. First, there is the rigid application of the 'One China' formula, adhered to by the government in Taipei. It is wholly unlikely that this formula will be significantly altered during the lifetime of President Chiang Ching-kuo. It is also unlikely that President Chiang's heirs will wish to scrap this formula, even if its application is modified. The Ministry of Foreign Affairs in Taipei, however, recognises that many foreigners find it difficult to understand why Taiwan is so adamant in its rejection of a "Two flags" policy; and they now give visitors a copy of an article by the Director of their Institute of International Relations, which recognises that their application of the 'One China' policy has caused "the bewilder- ment of many in the West."
There have, however, been a number of signs that an element of relaxation is creeping in. Taipei has increased its subscription to the Asia Development Bank, even though Peking has become a member. Trade between Taiwan and the Mainland, via Hong Kong, seems to be increasing. Hong Kong businessmen seem to be positively encouraged to pay multiple visits to both Taiwan and the Mainland. While I was in Taiwan, the boys' and girls' volleyball teams representing 'Chinese Taipei' were playing Mainland Chinese teams in the Asian Junior Volleyball Championship in Bangkok. The defeats, as well as the victories, of their own athletes, were widely reported. The confidence brought by economic success seems to be leading to a more relaxed application of the traditional 'One China' policy.
The second factor which militates against closer Anglo-Taiwanese relations is our official view that Mainland China is vastly more important as an international power,
and as a potential market, than Taiwan. Of course it is clear that on the inter-
national diplomatic scene, Mainland China is a great power and Taiwan is not. But
even on the military front, there is room for some qualification. At various times
in the past twenty years, we have expended much energy in trying to sell Harrier
aircraft to Peking. There is never any likelihood that this sale could go through,
because the Chinese armed forces do not have enough mechanics with sufficient skill
to keep complex vertical take-off aircraft in working order. There is no doubt at
all, however, that the Taiwanese air force could cope with the technical demands made
by the Harrier, if they were allowed to buy them. At the same time, in some defence
fields, Taiwan's qualitative edge may well be increasing.