TAIPEI: China won a significant diplomatic victory when President George W. Bush used Prime Minister Wen Jiabao's recent visit to Washington to rebuke President Chen Shui-bian of Taiwan publicly for allegedly disturbing the cross-Strait status quo. But Beijing's struggle for the hearts and minds of "compatriots" on Taiwan was set back further.

It is as yet a moot point whether Chen's espousal of the Taiwan people's right to hold referendums on their future will secure his re-election in March. According to opinion polls, an initial gain in his popularity was reversed after Bush's admonishment. With one third of voters reported still undecided, the race is evenly balanced between him and the Kuomintang candidate he beat in 2000, Lien Chan.

However, the very debate about holding referendums and changing the constitution has had the effect of shifting the center of gravity of Taiwan politics away from support for reunification. The Kuomintang opposition was forced to agree to a modified version of the referendum proposal. It has also watered down its commitment to one China and the desirability of eventual reunification.

Every diplomatic rebuff that Beijing delivers strengthens the appeal of the two-state theory among Taiwan's people. Prospects for early direct links across the Taiwan Strait have again receded.

As the election campaign loomed, it was thought that the mainland had learned its lesson and would not indulge in the saber-rattling that annoyed rather than frightened the electorate and helped Chen's campaign in 2000. Beijing could not resist rising to the bait of Chen's constitution and referendum proposals, however. They might have been ignored on the grounds that they were too vague to worry about. It was clear that Chen had no intention of asking for a vote on independence. But while Beijing's knee-jerk outrage worked on Bush, it had the opposite effect on Taiwan.

China is too used to repeating the mantra about Taiwan being an inalienable part of China. It cannot appreciate that the people of Taiwan are proud of their democracy and thus expect the right to make their own decisions. Nor will it admit that Taiwan's history is so different. Large-scale settlement from the mainland only began in the 17th century and the original Malayo-Polynesian inhabitants remained a majority till the 19th century. Taiwan also enjoyed 50 years of progress under Japanese rule. Unless willing to face these facts, Beijing will continue to treat Taiwan as England once treated Ireland. The "compatriots" will be viewed here as bullies .

All this helps explains the paradox of the past 15 years. Taiwan's economic links with the mainland have grown from almost nothing to the point where today 40 percent of the island's trade is with China. The mainland, in turn, relies on Taiwan for large part of its foreign investment and know-how, especially in electronics. Yet despite social liberalization and economic progress on the mainland, at the political level the two have moved further apart.

Chen is trying to take advantage of the fact that a prosperous Taiwan may put self-esteem before its pocketbook. Until he implicitly raised the issue of self-determination it had been widely assumed that Chen, with a lackluster reputation for economic management, would lose out to a reunited opposition. The Kuomintang was confident of its administrative and business prowess and its claims that the better cross-Strait ties it could forge would bolster the economy.

But that may not be strong enough to appeal to voters resentful of mainland posturing. Anyway, luckily for Chen, the economy and stock market have been lifted by global demand and a massively undervalued currency.

Whether Chen wins or loses, politics has proved yet again that Taiwan's identity is a hardy plant that has grown every time it has been challenged. Washington as well as Beijing should take note of the facts that democracy is creating in Taiwan.