Taiwan's opposition Nationalist Party scored a landslide victory in legislative elections last weekend. That boosts its chances of retaking the presidency in elections in March.
A Nationalist victory could lessen the possibility of conflict with mainland China, which claims sovereignty over Taiwan.
Speaking after the election, President Chen Shui-bian called it the worst defeat in his Democratic Progressive Party's 22-year history, and he resigned as party leader to take responsibility.
Taiwanese voters were clearly more concerned with their faltering economy and corruption within the ruling DPP than with Chen's efforts to achieve formal independence for the island.
Zhang Nianchi, a Taiwan expert at the Shanghai Academy of Social Sciences, said the outcome was revealing.
"The result of this election showed that voters don't want to follow the direction set by Chen Shui-bian," he said. "In this sense, the danger in cross-straits relations has decreased, and it should be good for peace and stability in the Asia-Pacific region."
The Nationalists have pledged to ease restrictions on travel and investment with the mainland. They now hold a two-thirds majority in the legislature, and their popular presidential candidate, Ma Ying-jeou, leads the DPP's Frank Hsieh in the polls.
But included in the March presidential elections is a controversial referendum on whether Taiwan should apply to join the United Nations as an entity that is separate from China.
Beijing considers this a step toward formal independence, but the Chinese have taken no action.
"If we had gotten excited or overreacted, it would have helped Chen," Zhang said. "It's a good thing we didn't."
Lin Chong-pin, a China expert at Tamkang University in Taiwan, said that Washington's warnings to Taipei have helped the Nationalists and undercut popular support for the referendum.
"Last year, U.S. officials publicly warned Taipei nine times, a historic high. The result was that support for maintaining the status quo increased sharply in opinion polls, while support for Taiwan's independence dramatically decreased," Lin said.
Concerns About China
Secretary of State Condoleezza Rice sent the most recent warning last month, saying that the referendum was provocative and would unnecessarily raise tensions in the Taiwan Strait.
But the US is also worried about China changing the status quo.
U.S. Navy Adm. Timothy Keating, head of the U.S. Pacific Command, said Tuesday that the U.S. is concerned about new weapons China is developing.
"We are concerned about development of long-range cruise and ballistic missiles," Keating said. "We're concerned about anti-satellite technology; we're concerned about area denial weapons, and we want to be very straightforward with our Chinese colleagues that increased transparency can yield greater trust."
Analysts said these weapons could be used to deny U.S. forces access to the seas around Taiwan in any conflict with China.