A recent decision by Taiwan to open trade relations with Eastern Europe reflects a new flexibility in the island's anticommunist policy as it comes to grips with increasing diplomatic isolation.
Almost a year after the trauma of the break in U.S. relations with Taiwan, the atmosphere is so relaxed here that formal abrogation of the U.S. defense treaty next week is likely to cause little tension.
The announcement in late November that Taiwan businessmen could now trade directly with the East European bloc, and indirectly through third parties with the Soviet Union, is considered a significant aspect of the new attitude.
Since the United States switched recognition to mainland China last Jan. 1, observers noted, the Taiwanese government has been less rigid in its relations with other countries as it seeks more trading partners.
Officials harp less on recovering the mainland and instead emphasize Taiwan as a model of development in the noncommunist world.
President Chiang Ching-kuo's government also has relaxed its controls on political dissidents at home. Taiwanese are now allowed to travel abroad as tourists.
Taipei's new airport is swarming with Nationalist Chinese returning with goods from shopping trips to Japan, Hong Kong and Singapore.
Most surprising, the opposition can now get away with blistering attacks on the government. The intensely nationalistic magazine Formosa and the more moderate Eighties have criticized the election laws, police power, suppression of human rights and economic policies. Trouble came only when Formosa allegedly fomented a riot and some staffers were arrested.
Such an activist press would have been unthinkable last year. At a party to celebrate the launching of Formosa, some months ago, die-hard anti-communist defectors from the mainland taunted the mostly native opposition -- which the magazine represents. To the surprise of the crowds, riot police used their shields to ward off the mainlanders.
The government's tolerance of the dissidents appears to back up its calls for unity among the various factions since its most important ally, the United States, severed diplomatic ties and announced its intention to abrogate the mutual defense treaty. The pact will be formally dissolved on Monday.
With the U.S. announcement almost a year ago, mobs attacked the U.S. Embassy.
But the pragmatic Taiwanese people have rolled up their sleeves and dug in to offset the diplomatic disadvantages that accompanied U.S. recognition of the Peking government.
The result is a success story that gives much confidence to foreign investors, diplomats and trade representatives.
A momentary flight of capital had taken place when Taiwan was voted out of the United Nations in 1971. This time, the economy is burgeoning.The nation of 17 million people enjoys the third-highest standard of living in Asia, after Japan and Singapore.
In the first 10 months of this year, foreign investment totaled $261 million as against $213 million in all of last year. U.S.-Taiwan trade has picked up from $7.3 billion last year to $10 billion this year.
"It is business as usual, call it by any name," says a Western diplomat whose status, like many others, has been changed to trade representative.
Embassies have been replaced by such obscure-sounding names as the American Institute in Taiwan, the Australia-Free China Society or the Chinese-Japanese Interchange. They perform the same functions as the embassies.
Taiwan's diplomatic ties have been reduced to 22 countries, including South Africa, South Korea, Saudi Arabia and several dictatorships in South America.
The island nation pursues aggressively what government officials call "more practical and substantive" trade and cultural relations with another 120 nations. While Taiwan smarted from what its leaders felt to be Washington's betrayal of a trusted friend, the U.S. and European protectionist tendencies have also contributed to a nascent interest in trade with the Communists.
Ministry of Foreign Affaris spokesman Charles King said the trade ties with Eastern Europe imply no ideological softening. "Our fundamental national policy -- that of being anticommunist -- remains," he declared.
What has changed is the atmosphere. The stirring 1950s rhetoric of John Foster Dulles and the late Generalissimo Chiang Kai-shek vowing to recover the mainland, no longer seems relevant.
Defense, however, remains uppermost in Taiwanese minds. This year it began assembling under license a squadron of Northrop F5F and F5E fighter planes. The defense development budget has been upped to $200 million.
Taiwan is designing its own tanks and guns and has already developed short-range missiles modelled on the Israeli Gabriel.
Premier Y. S. Sun recently told the parliament that production of military hardware had to be speeded up.
Few Taiwanese believe that China, short of amphibious craft, will take the island by force. Although China has not renounced the use of force, it is felt that the United States would not allow the loss of an important link in its own Pacific defense.