The resounding defeat of Taiwan's ruling party in recent local elections means that China may soon be able to take Taiwan by a combination of enticement and threat. That could occur after Taiwan's March 2008 presidential elections, in the leadup to the Beijing Olympics.
The "peaceful return" of Taiwan, and the outpouring of Chinese nationalism that it fostered, would do much to strengthen the Chinese Communist Party's grip on power in the face of rising discontent. No doubt, Beijing comprehends how Hitler used the 1936 Berlin Olympics to entrench himself in power.
Thus China probably hopes to checkmate the United States. If China brings Taiwan back into the fold by "peaceful" means, America can do nothing. And China will be able to plant its foot more firmly on Japan's sea lanes.