Leaders of China and Taiwan met but the way forward remains difficult with no precedent or parallel to look to.
The historic meeting between Chinese President Xi Jinping and the President of the Republic of China (also known as the "renegade province of Taiwan") Ma Ying-jeou in Singapore last Saturday offers an opportunity to reflect on the meaning of Taiwan and its significance in the sweep of history.
I first visited Taiwan almost half a century ago, in 1967. The main economic activity then seemed to be to serve as a base for American soldiers on rest and recuperation from the Vietnam War. Taipei was tawdry and poor. General Chiang Kai-shek was still dictator; martial law ruled. I travelled to the countryside and soon discovered why the Portuguese in the 16th century called it Ilha Formosa (beautiful island).
As a Japanese speaker (my ability in the language has become rather rusty since then), I could make my way around and communicate fairly easily as Taiwan had been made a Japanese colony following the first Sino-Japanese War (1894-1895).
By many accounts, the Japanese colonisation of Taiwan had been less brutal than in Korea, from where I had just come, and hence resentment was less hostile.
But Taiwan had had some traumatic times. Following Japan's unconditional surrender in September 1945, Taiwan was "restored" to Chinese suzerainty, placed under the harsh dictatorial control of Chiang's Kuomintang (KMT) army.
The Taiwanese people sought to rebel, with the result that on Feb 28, 1947, the KMT troops carried out a massacre in which an estimated 10,000 to 30,000 civilians were killed.
In October 1949, with the victory of Mao Zedong's People's Liberation Army (PLA), Chiang and senior officials and military members of the KMT fled to Taipei, where a government in exile was established.
The "refugees" brought with them what they had looted from Chinese monuments, which account for the immense cultural wealth of Taipei's National Palace Museum.
Washington, which had backed Chiang to the hilt and was outraged by the PLA's victory, insisted that the legitimate government in China was in Taipei, not Beijing, and that this should be recognised as such by all its allies.
Furthermore, China, as one of the five victorious Allied powers in World War II (along with the United States, the Soviet Union, Britain and France) had the right to a permanent seat on the United Nations Security Council.
But at American insistence, the seat was instead occupied by Taipei until 1971.
By way of anecdotal parenthesis, I might mention that I was living in Washington, DC, in 1964 - the year that then French President Charles de Gaulle defied the US and established full diplomatic relations with Beijing.
As a Frenchman, I can say it was quite unpleasant. We were vilified in much the same way as in 2003 when we opposed the American invasion of Iraq. Remember the name-calling, which included the phrase "French surrender monkeys".
There was also a move by some US congressmen to rename "French fries" as "freedom fries", and ditto for French toast!
On China and Iraq, we French were of course right on both occasions.
Then in 1972 came the total surprise visit of then US President Richard Nixon to Beijing and his meeting with Mao. The significance of that meeting is captured in Margaret MacMillan's outstanding book, Nixon And Mao: The Week That Changed The World.
In the meantime and in ensuing decades, Taiwan became one of the world's most dynamic societies. It was one of the four Asian newly industrialised economies, also known as the "Four Little Dragons", which included Hong Kong, Singapore and South Korea.
Beginning at the low end of manufacturing, in textiles, garments and other labour-intensive goods, the four rapidly moved up the value-added chain. They also have the distinction of being virtually the only societies formerly from the Third World to have succeeded in escaping the "middle-income trap" and becoming high-income societies.
Taiwan, in particular, became a technological powerhouse, in sectors ranging from electronics to information technology, to aquaculture.
Thanks to significant American aid, Taiwanese students in science, engineering and the social sciences were able to go in droves to study in prestigious American universities. In the 1980s, MIT was known not as Massachusetts Institute of Technology but Made-in-Taiwan.
While initially this constituted a massive brain drain, as on average out of 10 students going abroad only two returned, various economic and scientific policies, as well as democratisation, lured them back, creating in lieu of the brain drain a brain circulation.
ONE COUNTRY, TWO SYSTEMS
While many factors are responsible for the post-reform superlative economic ascent of China - though it still remains to be seen whether it will escape the middle-income trap - it is very difficult to imagine how it would have succeeded without the immense contributions of Taiwan. These include investments, technology transfer, management, finance and exports.
Foxconn is one of the better-known Taiwanese companies that have played a gigantic role in fostering Chinese growth, especially in exports, from which Beijing has been able to accumulate its massive piles of foreign exchange.
While economic ties are strong, creating a solid interdependence between the two economies, political ties have continued to be fraught. In 1995 and 1996, the "Taiwan Strait Crisis" occurred when China sent missiles into Taiwanese waters.
Beijing has always made it abundantly clear that Taiwan is an integral part of China and under no circumstances will its independence be contemplated. Matters are further complicated in that Taiwan has become a vibrant democracy. Among its political parties is the Democratic Progressive Party, which is likely to win the forthcoming elections and is committed to eventual independence.
How the political relationship will develop in the context of what Financial Times correspondent Mure Dickie has labelled "one of the most treacherous fault lines in international politics" remains to be seen.
There is no precedent or parallel that can be referred to in this highly complex situation. Initially, the "one country, two systems" concept was created for Taiwan; it has been instead applied to Hong Kong, though without anything remotely approaching a roaring success.
The Xi-Ma meeting in Singapore is no doubt a historic landmark, but the journey remains long and tortuous.
The writer is emeritus professor of international political economy at IMD, Lausanne, Switzerland, founder of The Evian Group and visiting professor at Hong Kong University as well as NIIT University in India.
This article was first published on Nov 10, 2015.
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