Preparing for this possibility is a very important justification for the U.S. Navy's budget. There are few other world threats that justify a Navy of the scale currently in place. It is also an important justification for the Air Force's force structure.
Apparently, however, these tensions have defused greatly over the last few years.
There is now direct postal service, commercial air transport, and, most recently, shipping between China and Taiwan. Also, Taiwan businessmen are investing in China.
And, in early January the China News Agency announced that representatives of China and Taiwan were are expected to meet after the Chinese New Year holidays to hammer out the technical details of several agreements to be signed during the third round of high-level, cross-Taiwan Strait talks. According to Straits Exchange Foundation Chairman Chiang Pin-kung, the new set of agreements will address issues such as cooperation on financial supervision and regulation, prevention of double taxation, intellectual property rights protection, and cooperation on combating crime.
These "semi-official" talks have seen unprecedented agreements between China and Taiwan, certainly a means of "defusing" the previous, danger-fraught relations between the two.
It also appears that the Chinese military, which has expanded and grown more sophisticated over the last few years, may be focusing more on protecting Chinese access to foreign oil resources, and less on keeping open the option of invading Taiwan militarily. One of China's most recent military engagements was to add its Navy resources to the international group of ships firing shots in anger to protect shipping from Somali pirates. This shipping matters to China because much of its oil supply travels this route from Sudanese suppliers.
The surprise is not so much that this is happening, as that it is happening now. China has been liberalizing its economy, and curtailing the worst abuses of its authoritarian political system, ever since the end of the Cultural Revolution, the arrest of the "Gang of Four" and the death of Mao in 1976. Progress has come sometimes in spurts and paused at other times, but it has not stopped.
Unlike almost all of the rest of the world, China has not adopted wholesale either the Continental European political and legal model, or the Anglo-American political and legal model.
Instead, China has organically established its own legal system that differ from Western models right down to core concepts like "what is property," and has conducted almost all of the political liberalization that has taken place within a single political party, within the bounds of strict restrictions on the public expression of ideas.
There is much about the Chinese model which is undesirable. Its economic growth is fueled in part by artificially propping up the American dollar vis-a-vis the Chinese currency, producing trade deficits and creating an unsustainable situation. Its coal driven economy is a global environmental disaster. China makes wider use of the death penalty than any other country on Earth, and provides only weak protections for the accused in its criminal justice system. China still comes across as unpredictable, inscrutable and somewhat corrupt in its international trade dealings. Limits on expression impair the Chinese quality of life, mutes the ability of its political economy to secure progress, and can allow legitimate grievances to fester until they get out of control.
But, the Chinese model isn't necessarily fatally flawed either. China is more democratic now (with a little "d") than it was when it received the wake up call embodies in the Tiananmen protests. China has weathered the past thirty-two years without any further episodes of Stalin/Mao class repression, or a civil war (or even serious insurgency) in a country with many regions that hunger for independence.
The Chinese have chafed under harsh centralized policies like the "One Child policy," crude imposition of harsh criminal penalties and restrictions on free speech. But, China has been more open to change that nations following the Soviet model that ultimately collapsed, and has been less repressive the regimes those of Saudi Arabia, Sudan, the Taliban, Iran, Pol Pot's Cambodia, Kazakhstan, the Soviet Union, North Korea, the Nazi regimes, Cold War Albania, or its own regime under Mao. China has for the past generation avoided than perils of weak government found in most of Africa, the perils of anarchy found in Somalia, and the temptation to overextend itself on a military front exhibited by Imperialist Japan and the Nazi regimes. China has maintained civilian rule with less military influence than Turkey, most of Latin America, and a host of other emerging democracies which have been ruled from time to time by military juntas (including currently industrialized democratic countries like South Korea, Greece and Spain).
The re-establishment of Chinese supremacy in Hong Kong, in 1997, and in Macau, in 1999, produced a small step backward in each former Western colony's political economy. But, China has refrained from crushing the basically Western economic systems that have contributed to economic prosperity in these former colonies, in either place. These experiences appears to have calmed the worst case scenario fears of Taiwan about what might happen if it were more closely integrated politically with the mainland.
Neither the Chinese elite, nor the common people of China, are so isolated from the rest of the world that they cannot see the way that the winds of political and economic change are blowing. Official Chinese new reports are mind numbing for their indirectness, and official Chinese diplomatic P.R. is sometimes laughably inept. But, China is not indifferent to its international reputation.
The Chinese elite does not have a "free society" as a priority. But, it does want its people to be more prosperous materially, does want its people to be predominantly happy with their lot in life, and does want its country to earn international respect through extraordinary accomplishments from its Olympic performances to its space program to its reputation for respecting human rights.
The modern, developed world is still holding its breath when it comes to China. This nuclear power with growing military might is not governed according to the values or principals of the West, and could easily be drawn into a dangerous nationalist fury if provoked.
But, the possibility that the international community can calm the waters long enough for China's system to come into secure harmony with the rest of the world, and for its backward neighbor North Korea to collapse under its own inadequacies, before either country winds up in a bloody modern war, is looking more likely than ever.