On May 20, Chen Shui-bian took office as "president" of Taiwan for the second term amid unsolved mysteries and objections. From now on, Taiwan is moving into very dangerous waters.

Chen vowed not only to continue his policy of indigenization and desinofication, but also to revise the constitution to attain de facto independence for Taiwan.

His trust account with the mainland authorities has been hugely overdrawn, and whatever Chen said in his own defence at the swearing-in ceremony will be fully discounted.

Beijing will keep a watchful eye on the results of the election of the Legislative Yuan at the end of this year. It is quite likely that the now demoralized Pan-Blue camp, which is more conservative down the independence road, will lose its majority. Should that happen, both the legislature and the executive will then be in the hands of Chen's Democratic Progressive Party (DPP).

The four years ahead till 2008 will be of escalating tension, with the possibility of war in the background, depending on what moves Chen may take.

The year 2008 has special significance for the mainland as well as Hong Kong. This is the year when Beijing will host the Olympic Games. In 2007, Hong Kong will elect a new chief executive, and in 2008, a new session of Legislative Council. If we put it all together, it would not be difficult to see why the central government has been so anxious to put a hold on Hong Kong's move towards universal suffrage in 2007/08. The Taiwan element is prominently in the picture.

Just imagine a scenario of the new popularly-elected chief executive of the Hong Kong sending a note of congratulation to the "president" of Taiwan on its new constitution of independence. Far fetched? Not at all, as many of our democratic politicians are on very good terms with the DPP. And Emily Lau has said on record that she respects the wishes of Taiwanese people and will not object to Taiwan independence.

Having to handle the Olympic Games and Taiwan's move towards independence at the same time, Beijing has too much on its plate, and there is no room for Hong Kong issues.

Come to think of it, the move towards de facto independence in Taiwan is not that different from the clamour for complete autonomy in Hong Kong.

Whilst the Taiwan separatists want to proceed with desinofication and not become a part of China, Hong Kong democrats want to resist cultural influence from the mainland, and Hong Kong from becoming another Chinese city.

The fact is that both Hong Kong and Taiwan have been cut off from the motherland for too long, and some people find it difficult to become part of a big family. This feeling is there, and it is real. We have to face up to it and try the utmost to defuse it peacefully.

In Hong Kong, some tend to look down on mainland immigrants calling them Ah Charn, mainlanders and Putonghua-people. But officially, the SAR government provides equal opportunities for all, and Hong Kong is a hospitable metropolis for everybody.

In Taiwan, the separatists want to marginalize the so-called "people from other provinces", who are those that joined the Kuomintang in their retreat from the mainland 55 years ago and their descendants. With indigenization now going full throttle, these people will soon become second-class citizens in Taiwan.

In Chen's first term, we have witnessed an exodus of capital and various talents to the mainland, swelling the number of Taiwanese in the mainland to around one million, some 4 per cent of the Taiwan population. With the spectre of war on the horizon and internal discriminatory policies, this trend is expected to accelerate.

A recent poll in Taiwan indicated that many people want to leave, and the second most popular destination is the mainland, after the US. It is quite likely that we are going to witness a depopulation of Taiwan in the next four years. Needless to say, the Taiwan economy is going to be weakened further.

We have a parallel experience in the transitional period, especially after 1989, when a wave of middle class residents who did not buy the idea of "One Country, Two Systems" deserting Hong Kong.

Fortunately, subsequent developments here proved them wrong, and many returned in the 90s with their money.

But Taiwan may not have such fortune as four years is just too short for the leavers to turn around. With or without war, in the end the whole island, with its remaining inhabitants, will pay a hefty price for the madness of the separatist movement.

With inhabitants all the poorer in 2008 and something like 10 per cent of the population living and working happily on the other side of the Taiwan Straits, perhaps our compatriots on the island will sober up and say no to the ridiculous proposition of independence.

(HK Edition 05/24/2004 page10)