Taiwan Without the Taiwanese?

It can get pretty scary when your sworn enemy develops the means to fry you and your pets but leave intact your apartment, Playstation and car. But Taiwan needn't be overly concerned about Beijing's announcement Thursday that it has built a neutron bomb -- economic realities militate against Beijing taking any military action against Taipei, let alone nuking the island. Although China's neutron announcment formed part of a report prepared in response to U.S. allegations of nuclear espionage, its timing was intended to rattle a saber in response to President Lee Teng-huis plan to pursue "state to state" relations with Beijing, which has long warned that it will take military action to prevent Taiwain declaring independence.

Still, the neutron bomb revelation is unlikely to set the Taiwanese quaking. "China is in danger of becoming a paper tiger," says TIME U.N. correspondent William Dowell. "Although they're making all these veiled threats, they can ill afford the economic consequences of taking any kind of military action against Taiwan, which would cut their ties to the outside world and deny them essential investment and trade." President Lee's comments may be part of an attempt to strengthen Taiwan's negotiating position at a point when Beijing's relationship with Washington is in a rough patch. "Taiwan is concerned about avoiding a situation where Taiwan's interests are sacrificed by Washington to avoid jeopardizing expanding business relations with Beijing," says Dowell. And right now it doesn't take much to drive a wedge between the U.S. and the Middle Kingdom.