For more than a decade, unexpected developments in Taiwan's rapidly evolving democracy have driven cross-strait relations, surprising Washington and horrifying Beijing. Last year saw a return to this pattern after Beijing temporarily seized the initiative by passing its Anti-Secession Law in 2005. Taiwanese President Chen Shui-bian is likely to take another step towards formal independence this year by proposing a new constitution. Although it will never be passed by the opposition-controlled legislature, Beijing is deeply troubled by the implications of the constitution. And it is right to be worried. Taiwan's political evolution has been rapid, unpredictable and volatile. Ideas such as referendums have moved quickly from the pro-independence fringe into reality. After years of political deadlock, Taiwanese voters are convinced that their system is broken. They tried to fix it by forcing through the passage of a constitutional amendment in 2005 to halve the size of the legislature at the end of this year. This radical change could create the conditions for a new constitution in a few years. If the reform does not end Taiwan's political feuding, fed-up voters may decide that the patient needs even stronger constitutional medicine. In the short term, though, this reform is ushering in a 'warring states' period that will consume Taiwanese politics for the next year. The island's legislators are fighting for their political lives. Meanwhile, the 'emperor' - Mr Chen - is trying to save himself from the scandals that are threatening to bring down his house even as the princelings in his Democratic Progressive Party fight to succeed him. It doesn't take a sage to predict that, in these circumstances, no new, major cross-strait policy initiatives will be forthcoming from Taipei this year. The aftershocks of the Anti-Secession Law - which established mainland China's right to use military force against Taiwan - continued to rumble through cross-strait relations last year. Mr Chen responded to this ill-advised legislation by effectively abolishing the National Unification Commission. The commission was merely a symbolic relic of Taiwan's pretensions to govern the mainland as the Republic of China; yet its termination formally ended the last policy commitment to being part of China. In his New Year address, Mr Chen disclosed further retaliation. Taipei had delayed for two years before finally, last year, allowing Taiwanese computer chip manufacturers to make more advanced chips on the mainland. The delay was to punish Beijing for the law, he said. Having regained the initiative in cross-strait relations last year, Taipei will continue handing out tiny doses of liberalisation. It has announced plans to allow mainland tourists to change small amounts of yuan directly into the local currency, and is expected to substantially increase the number of mainland tourists. Perhaps counter-intuitively, the only real hope for a breakthrough this year lies with Beijing. If it accepts the reality that Taiwan's future is largely in the hands of the island's 23 million people, it could start trying to persuade Taiwanese that they share a common future. An excellent start would be to end immediately Taiwan's diplomatic isolation and exclusion from world organisations. All this policy does is humiliate ordinary Taiwanese citizens when they travel abroad, and spark outrage at home. Unfortunately, rather than radically rethinking its approach to Taiwan, Beijing's collective leadership will probably prefer to wait for Kuomintang chairman Ma Ying-jeou - Taiwan's last credible nationalist politician - to win the presidency next year. But it may be waiting in vain: although he is the clear frontrunner, Mr Ma may not win. Even if he does, he may not turn out to be the pliable patriot Beijing is expecting. Mr Ma has already signalled that he is beginning to distance himself from Beijing. He began the year by announcing that he was relegating to the back burner a KMT-Beijing reconciliation achieved by former KMT chairman Lien Chan. Instead, the KMT will give a higher priority to co-operating with the DPP on a bipartisan approach to Beijing. A visit to the mainland this year by Mr Ma also seems politically untenable after the DPP's unexpectedly strong showing in mayoral elections last month. The KMT's weak performance made the supposedly invincible Mr Ma look vulnerable on the Taiwanese identity issue. A folksy Taiwanese saying sums up voter sentiment about the DPP: 'They may be ugly babies, but they are our babies.' Beijing has eagerly re-embraced its Confucian heritage in recent years. It would do well to rediscover the mystical, Taoist side of that heritage and apply it to cross-strait relations. By stepping back to move forward - a classic bureaucratic ploy called yitui weijin - Beijing may still have the power to transform Taiwan by winning over its people. Michael Fahey is a Taiwan-based writer and commentator