TWO questions have preoccupied Taiwan watchers as the 'political miracle' touted by President Lee Teng-hui is about to be consummated at the first-ever popular presidential elections next March. The first is: will the Chinese be able to disrupt - or stop - the elections? The second: if Mr Lee wins the elections, will he maintain what Beijing regards as an intransigent mainland policy? As optimists in Taipei see it, Beijing has shown signs of a thaw since the second series of missile manoeuvres in the East China Sea ended last week. Taiwan-affairs officials in China have reportedly indicated that Beijing is ready to 're-activate' President Jiang Zemin's eight-point peace offensive to Taiwan, which he unveiled last January. The initiative envisaged a tete-a-tete with Mr Lee. The vitriol heaped on the Taiwan president since his visit to New York in June convinced many analysts that Beijing had written off the Kuomintang (KMT) leader as a partner for re-unification talks. Beijing has also softened its stance towards the United States by freeing Chinese-American activist Harry Wu - and seeking a summit between Mr Jiang and President Bill Clinton in October. During talks with Chinese Foreign Ministry officials last week, US Undersecretary of State Peter Tarnoff reportedly promised Beijing that Washington would 'discourage' future visits to the US by senior Taiwan officials. There are hopes in Taipei that after Mr Clinton has given Mr Jiang similar assurances in Washington in October, Beijing might leave Taiwan alone, at least for a while. Sources familiar with Beijing's Taiwan policy, however, have seen no sign that Beijing has changed its short-term goal: to torpedo the candidacy of Mr Lee. The sources said the Chinese had taken umbrage over the fact that after the two missiles tests, Mr Lee had committed no acts of 'contrition' such as toning down his rhetoric about Taiwan's rightful place in the international arena. Instead, Taipei has sought protection from Beijing's wrath, by further 'internationalising' the Taiwan issue. Taiwan diplomats have been lobbying Asian-Pacific countries including the US, Japan and members of the Association of Southeast Asian Nations over the fact that Beijing's sabre rattling in the East China Sea constituted a threat to regional and international security. In a talk to a group of international academics attending the conference on 'Consolidating Third Wave Democracies', which ends in Taipei today, the president pledged to build up a 'great Taiwan' based on its democratic, non-Communist experiments. Mr Lee's supporters, as well as the opposition Democratic Progressive Party (DPP), fear that the Non-Mainstream Faction of the KMT - which favours reunification - might somehow persuade Beijing to up the ante against the president. The theory goes that the Non-Mainstreamers, who are rapidly losing influence in Taiwan, see a Beijing connection as their last chance of clawing back power. The political fortunes of the mainlander faction have also been dampened by the inability of its two leading candidates - KMT vice-chairman Lin Yang-Kang and Control Yuan chief Chen Li-an - to agree to join forces. In any case, both Mr Lin and Mr Chen trail Mr Lee by huge margins in popularity polls. Methods that Beijing may use to sabotage the elections are well-known: moving the missile test zones closer to Taiwan, and even seizing a couple of outlying, KMT-held islands. And Beijing's decision to mend fences with the US are seen as a ploy to prevent Washington from interfering with its machinations against the 'breakaway province'. 'Lee may have no choice but to declare a state of emergency and postpone the elections if massive panic occurs on the island,' a veteran politician in Taipei said. Parliamentary elections in late 1979 were called off amid the crisis precipitated by Washington breaking off diplomatic relations with Taipei. However, other analysts in Taipei believe that the Taiwan public will keep its cool in spite of the volley of mainland missiles - and confirm Mr Lee's status as the first directly elected chief executive of any Chinese society next March. Even the DPP has admitted that at a time of heightened confrontation with the mainland, the electorate tends to stick with whoever is at the helm. Even his detractors say Mr Lee can get at least 45 per cent of the votes - more than enough for victory. The big question next March is: will, as Beijing fears, Mr Lee toughen his mainland policy now that he is blessed with an island-wide mandate? Or will he make the necessary adjustments to ride out the period of uncertainty in post-Deng Xiaoping politics. According to a seasoned mainland-affairs specialist in Taipei, the president will likely sue for peace with Beijing by, for example, approving direct communications and trading links with the mainland. Mr Lee might also give the green light for cross-Strait visits by senior officials from both sides. 'In international conflicts, antagonists often do not reach common ground until they are on the brink of warfare,' he said. Other analysts, however, think that Mr Lee might be banking too much on American and Japanese support, - and was giving too much weight to the possibility that the Chinese Communist Party will be emasculated in the wake of the post-Deng power struggles. A longtime Lee watcher thinks that the Japanese-educated president is imbued with the stubbornness of a samurai swordsman. He said the native-Taiwanese president would take advantage of his hard-earned status as 'the father of Taiwan democracy' to craft further defences against the mainland's encroachments. The Lee expert said that, apart from expanding the army and flushing out mainlander-affiliated generals, the top politician would institutionalise the referendum as a tool for legitimising policies. 'The president will hold referendums for major domestic policies, structural changes in government, and ultimately, questions of nationhood,' he said. 'As a devout Christian and democrat, Lee is convinced that nobody, including the mainlanders, could touch him if he has the will of the people behind him.'