Even if the missiles don't get them, the money might

It should be a simple thing, coming home from abroad for the most important holiday of the year; no more than a matter of booking early to make sure of your plane seat. Not if you are one of the half-million strong Taiwanese business community in and around Shanghai, abroad is the People's Republic, and the holiday is the Chinese New Year. Instead of the hour and 20 minutes a direct flight to Taipei would take, you have to lumber circuitously through Hong Kong or Macau, a journey that can take as long as six hours.

Goods suffer the same obstructions as people. Intimate as is the economic embrace in which China and Taiwan are locked, the politics of the past - which do not allow of any contacts which send the wrong signals about sovereignty and legitimacy - keep getting in the way of the logistics. Nor is this just a matter of efficiency. The issue of what are called "direct links" is symbolic of the larger choices faced by Taiwan in its relations with China.

When the grandson of Chiang Kai-Shek argues for "a new mindset", it is an index of how far things in Taiwan have shifted, not just from the now almost archaeological era when the nationalists were consolidating themselves on the island and the communists were fulminating on the mainland, but even from just a few years ago when trade and investment were first blossoming.

That grandson, John Chang, a legislator from the Kuomintang party, has made it his personal business to try to set up charter flights between Shanghai and Taipei, clearly in the hope that these will lead to the early establishment of full direct links by air and sea. The argument that used to predominate on the Taiwanese side was that the political price which Beijing would demand for links - admissions or forms of words tending to support China's claim that Taiwan is merely a temporarily alienated province - was too high. That has not gone away, even though China keeps stressing its flexibility on this and other issues. But it has been overlaid by another argument, between those who say there can be no halfway house in Taiwan's integration into the greater China economy and those who do not want to put all Taiwan's eggs in one basket.

Chang is one of those who thinks that Taiwan could lose some of the advantages it gained from its early entry into the China market, and which its geographical position and special skills offer, if it does not get rid of remaining obstacles to economic activity. Others speak of a constellation of economies around the sun of Shanghai in which success will be determined both by the size of your presence in that city and by what you produce and research at home. A more cautious school, well represented in the government of President Chen Shui-bian of the Democratic Progressive party, wants to diversify by developing alternatives to China as a market and a field for investment, especially in south-east Asia.

There is, however, probably less real policy difference be tween the two schools than at first appears. Even the most enthusiastic integrationists are not opposed to diversification, and the diversifiers do not pretend that China is not the main event. The more interesting difference in Taiwan is one of mood. Some welcome the astonishing rise and rise of China with gleaming eyes, want Taiwan to take a leading part, and are sanguine about the possibility that it will end in some kind of crash. Others are more worried about what might happen if China does crash, and they also think a lot about what might be lost even if it doesn't.

Ultimately, the contrast is between those who see Taiwan's difference, its special qualities, mainly as an asset that will help get the country and its businessmen a larger and larger share of the China boom, and those who see Taiwan's difference as threatened by that boom. "Do you love Taiwan?" is the way the question is sometimes put - or answered, as it was this week by the wonderfully named Cross-Strait Marriage Harmony Association, which campaigns for a shorter naturalisation period for the mainland wives of Taiwanese men. "We Love Taiwan," they proclaimed at their press conference, "because we are daughters-in-law of Taiwan."

In some respects, Taiwan's situation is similar to that of any small country flanked by a much greater one. Canada and the United States spring to mind, which suggests that even a democratic China would weigh on the smaller society. But it is of course made much harder by the claims of the large country on the smaller one, and above all by the sharply opposed political cultures.

As China changes, however, so has the nature of this latter problem for Taiwan. The alliance of convenience which the Chinese Communist party is trying to develop with business - one which is very much open to businessmen from the wider Chinese world and the rest of east Asia - is problematic both economically and politically. At worst, business will prop up autocratic rule, while autocratic rule will corrode good business behaviour, a recipe for disaster over time.

The old divide in Taiwan had most ethnic Taiwanese on one side, most mainlanders on the other, the first tending toward independence, the latter seeing China as the great project, however much they hated those in power in Beijing. Now the business class, with a much softer attitude to Beijing, is in the vanguard of the second group. The first group can hardly repudiate business and its needs, for without economic success Taiwan might have neither survived nor become a democracy. Yet it senses dangers to Taiwan in the economic miracle as the People's Republic conceives it, as well as noting that the old military dangers - represented by the missile array China has built up on the coast facing Taiwan - have not gone away. In one way or another, China still threatens to suck Taiwan in.

This Taiwanese sense of vulnerability comes to the fore at election time. In the mayoral and council election campaigns for Taipei and Kaohsiung this week, Kuomintang candidates have been accused of being the sort of men who would sell Taiwan out to China. Even the Taipei municipality's decision to stick to the transliteration system for Chinese into English, preferred on the mainland, has been interpreted as showing Beijing sympathies. The Kuomintang counter-charge, in effect, has been that the Democratic Progressive party candidates are bad economic managers who are also likely to constrain Taiwan's economic opportunities on the mainland.

The two mayoral contests are important because they will probably set the tone for the next presidential election in 2004. Every political heavyweight on the island has intervened in both contests repeatedly, corruption accusations are flying, and the firecrackers are popping in the final rallies before the vote this weekend. Whatever the outcome, the campaign suggests that when people vote in the more important election in 2004, the big question will still be: "Do you love Taiwan?"