One can only assume that Taiwanese President Chen Shui-bian and his scriptwriters were judged to have heeded the State Council's warning not to 'keep following their separatist agenda ... and, in the end, meet their own destruction by playing with fire'. At the time of going to press, 36 hours after Mr Chen's inauguration speech, Taiwan had not yet been destroyed. Mr Chen's address to a rain-soaked crowd on Thursday certainly sounded as if it had been written with a nod to the Taiwan Affairs Office statement released just a few days earlier. He specified that his 'constitutional re-engineering project' would avoid the sensitive issues of 'national sovereignty, territory and unification/independence'. He repeatedly referred to the Republic of China, rather than Taiwan. He made no mention of yi bian yi guo (one country on each side of the Taiwan Strait). And he said that both sides should 'guarantee there will be no unilateral change to the status quo in the Taiwan Strait'. That is hardly splittist talk. There are a few people in Beijing who should take a bow for this. Their cleverly crafted statement may have been a stern warning to Mr Chen in form, but in substance it was a plea for compromise. It gave him what he needed to pull his speech towards the middle ground by offering him carrots, rather than just a stick. There was the usual diatribe about the consequences of pursuing an independence agenda, prompting some to call it a sign that Beijing was 'really, really' getting fed up. But in the main body of the statement, seven hypothetical rewards were offered in return for embracing the one-China principle. To the amazement of many cross-strait affairs analysts, these included the suggestion of a mechanism for building trust between their militaries. Most remarkable was the last point: 'Properly addressing, through consultations, the issue of international living space of the Taiwan region commensurate with its status so as to share the dignity of the Chinese nation.' Coming the day before Taiwan lost its annual bid to join the World Health Organisation, it was clearly an attempt to make amends for last year's debacle. Then, in the midst of Sars, Beijing blocked the bid with an imperious sneer from an official: 'Who cares about your Taiwan?' It was the spark that ignited Mr Chen's re-election campaign. Washington did its part, too, by virtually editing Mr Chen's speech via astute back-door diplomacy. The big question is what comes next. It looks promising that a new status quo can be built on the foundations of the previous one, which was burned to the ground by US President George W. Bush in the first four years of his Taiwan Strait custodianship. Clear lines have again been drawn. On Taipei's side, there can be no moves towards changing the country's name (or flag), outline of its territory, or stance on independence or reunification. On Beijing's side, there can be no moves towards the use of force in settling the dispute - note how quickly the Bush administration said it would defend Taiwan after Beijing's statement on Sunday. True, there is still the constitutional reform process in Taiwan to worry about ahead of the 2008 Olympics. But as Mr Chen made clear on Thursday, the process will be governed by existing constitutional safeguards - that is, he will need a three-quarters majority in the legislature. The day that three out of four Taiwanese legislators agree on anything about the status quo will be the day their Beijing counterparts give Hong Kong universal suffrage. Far more of a wild card is the question of who is really running Taiwan policy in Beijing. Is it the president, or the head of the armed forces? The last time there was a crisis in the Taiwan Strait, those two offices were held by the same person. Not any more. Anthony Lawrance is the Post's special projects editor. He lived in Taipei from 1996-2002