investment or managerial talent. Nonetheless, it is true that the resolution of the Taiwan issue would contribute to the prestige and perceived national power of Beijing. Third, there was very little the U .S. dbluld do to influence the outcome of the Hong Kong settlement. The only practical U.S. policy was to encourage London and Beijing in their negotiations and to support the Agreement once it became apparent that it was the best possible under the circu m stances. However, the U.S. could play a major role in Taiwan's reunification. official U.S. policy is noninvolvement, except to express an interest in the peaceful resolution of the issue. But the fact that the U.S. is critically important to Taiwan's pro s perity and security and fundamental to China's modernization makes being evenhanded difficult for the United States. The tightrope the U.S. walks in arms sales to both the ROC and PRC is a case in point. Fourth, expectations about the future of Hong Kong a re heavily laden with subjective factors. opinions as to the trustworthiness of the communists, theoretical concerns about having two economic systems operating in one country, the durability of Deng Xiaoping's reforms on the mainland, and the ability of even well-meaning Chinese government
officials to keep from meddling in Hong Kong's freewheeling style predetermine to a great extent whether one believes the future of Hong Kong will be bright or bleak. Similarly, conclusions about the possibility of a Just settlement between Beijing and Ta i pei and whether the U.S. can play a constructive role in reunification are heavily influenced by subjective considerations., Complicating factors are the highly personalized style of leadership both on the mainland and in Taiwan, the intense sixty-year ri v alry between the Kuomintang and the communists, and the failure of U.S. efforts to play a mediator's role between the two parties in 1945 to 1950. 1 Fifth, in the negotiations the PRC was very firm on principles, but relatively pragmatic on details. Howev e r, since the agreement was signed, Beijing has been increasingly active in Hong Kong affairs both economically and politically. In the case of Taiwan, Beijing says that it is firm on the principle of national unification but flexible on the means to achie v e that objective. The fact that the'PRC finds it difficult to remain out of Hong Kong affairs, however, is a troubling reminder that the communists may indeed interfere in Taiwan affairs--despite Beijing's assurances to the contrary. The experience of Tib et is not reassuring in this regard.
And sixth, the Hong Kong settlement has.added to the pressure on Taipei. The ROC must decide how to relate to Hong Kong after 1997 and how to respond to the "one country, two systems" formula as a possible model for its own future relationship with the mainland. If nothing else, the settlement has reminded Taipei and the rest of the world that the historical question of China's reunification is a dynamic one; not an issue cast forever in concrete. The Hong Kong Agreemen t also is a sword that cuts both ways. If the settlement pressures Taipei on reunification, it puts Beijing on the spot to prove its words by deeds. And it is far more difficult for the PRC to ensure that Hong Kong remains prosperous than for the ROC to re s ist reunification proposals. The possibility still exists that Taiwan could become independent, but the circumstances under which that could occur are becoming increasingly limited because of diminishing international support. Beijing, however, must conti n uously remind itself that the failure of Hong Kong might well be one of those circumstances. My conclusion is that the Hong Kong settlement does not provide a workable model for Taiwan's reunification wiih the mainland. Without question, this is an histor i c period in China's modernization, and unification will have to be addressed as part of that process. Thus, if not a model for Taiwan's reunificationF the Hong Kong settlement is at least an important "test case" for PRC sincerity. The failure of the