It might be economically rational for Taiwan to be federated with mainland China but by the same token its $*#@^%! madness.

What price can you put on freedom and liberty.

If a federation is negociated it surely will have a large component dedicated to manufacturing. Labour costs in China are lower than Taiwan so it is inevitible that significant product development and manufacturing capability will be moved to the mainland.

If the Australian labour leaders think they have a problem today with low cost products coming from Taiwan - wait until federation.

We must unshackle our Aussie businesses to allow them to work smarter if we are to retain our current economic prosperity in the face of growing international competition

About ten years ago I went to Taipei on business, with only the world press as my guide to Taiwan's attitude towards the mainland. I was therefore quite surprised to find myself at dinner with three business colleagues, one of whom favoured re-connection with mainland China, one who was against it, and one who was saying "it depends....".

There was an election due shortly, so the dinner conversation was perhaps more politically oriented than it might otherwise have been, but two aspects of it stand out in my memory. The first was the calm and rational manner that these Taiwanese (admittedly a small sample from the professional classes) discussed the position - there was no "cry freedom" emotionalism, just a pragmatism about the range of possible outcomes.

The second standout memory came when I quizzed the pro-reunification member of the team about her attitude - which, I confessed to her, came as a bit of a surprise to a foreigner who had only press reports to guide him. Her bottom-line was simple - "we are after all, all Chinese".

Having only a few short years earlier witnessed first hand the re-unification of Germany, I knew what she meant. At some point, politics takes a distant second place.

George Gu's proposal is not new, I tried to interest the U.S. Embassy in Australia in it many years ago. But Gu's case for it is much better made, and the timing appears more propitious.
I personally prefer the concept recently proposed by Dr.Paul Monk (www.austhink.org), where Taiwan would have a similar relationship to China to the relationship Australia had with the United Kingdom. However this concept of affiliated, independent states may be too remote and tolerant for China to accept, even when it is couched in the term 'dominion'.
A better prospect might be a confederation comprised of China, Tibet, Taiwan, Hong Kong and Macao in which the powers of the central authority are carefully prescibed, and the members have considerable autonomy under them (similar to the European Community). This might be what George Gu has in mind, but the terminology used can be crucial.

>Above all, they are all Chinese, separated only by an unfinished business of a painful civil war.

This is nationalist nonsense. China and Taiwan are separated by the massacre of 30,000 Taiwanese by Chinese troops in 1947. This is where the independence movement comes from. If "they are all Chinese", how can Chinese kill so many of their "fellow" Chinese?

"Federation" is an abstract fantasy, and meaningless. The only solution to the cross-straits crisis is democracy in China. Only then will the mainland have a political system which could incorporate Taiwan without creating more instability than currently exists.

And step one is for the PRC to acknoweldge the 1947 2-28 Incident and its own 1989 6-4 massacres.