How can fresh conflict between China and Taiwan be avoided? The crisis in the Taiwan Straits in 1995-96, and fresh tensions in mid-1999, made clear that relations between China and Taiwan are not only about trade, investment and tourism, but also about war and peace. Taiwan's democratisation means that it will become increasingly difficult for the island's people to contemplate reunification with the mainland. China's reliance on nationalism ensures that Beijing will not tolerate independence. Finally, the prospects remain distant of a coherent US policy towards the dispute. Taiwan's progress towards a new identity and greater self-determination seems unstoppable, and a peaceful settlement to the dispute across the Straits cannot now be built on the basis of 'one-China'. While this is well understood in the US and other democracies, 'one China one-Taiwan' is diplomatically inconvenient, possibly even dangerous. In the absence of a major crisis in the Straits, there is no evidence that the outside world will acknowledge the new Taiwan, and recognise the right of its people to choose their future. However, unless all the parties concerned accept the existence of a new Taiwan, the dispute across the Straits will remain one of the most contentious and dangerous in East Asia.