China-Taiwan relations : reining in at the brink of the precipice?

Abstract

China had always been an important player in the international system by virtue of its large territory, vast resources and huge population. This significance increased tremendously after the market reforms initiated by the late Paramount Leader Deng Xiaoping in 1978 placed China on a course of development that rapidly transformed its latent potential power into actual power. This was evident from China's annual double-digit economic growth, domestic political renewal, extensive international diplomatic efforts and a wide-ranging military modernisation programme. American investment bank Goldman Sachs projected that China's economy could overtake that of Germany's by 2007, Japan's by 2016 and the US' by 2041. OECD economic historian Angus Madison also projected that Chinese Purchasing Power Parity (PPP) could surpass the US' by 2015.2