This article discusses Taiwan President Chen Shui-bian's China policy and the impact this has on the cross-strait relationship. Chen is unlikely to deviate from the pro-independence stand of the Democratic and Progressive Party (DPP). For the short-term, Beijing has good reason not to use force, but resorts to both well-calculated pressure (on the DPP) and concessions (to the opposition), in the hope that this may eventually weaken the DPP This "neiwai jiaokun" (internal trouble and external pressure) may emasculate Chen's will and ability to push for independence. Even a declaration of independence by Taiwan, if without U.S. support, will be manageable to Beijing, which has been psychologically, politically, and militarily prepared for such a contingency. The declaration can only pose a threat if it is used by a major foreign power for other objectives. Therefore, the Chinese reading of U.S. strategic intentions is crucial in deciding what action China will take on Taiwan. [ABSTRACT FROM AUTHOR]