Is Taiwan going to be a casualty of the"War on Terror?"

I posted this on Daily Kos, but it bears recording here as well.

Almost completely under the radar last week was Colin Powell's trip to China. Here is one local (Portland OR) opinion column on the subject.
Although it was reported in the press with the standard pablum "And nothing will get done before the election..." this trip is potentially a seismic shift in US policy and a huge ticking time bomb for Republican hopes in 2008.

What is interesting about Powell's trip, as the linked article points out, is that Powell said, "There is only one China. Taiwan is not independent. It does not enjoy sovereignty as a nation, and that remains our policy, our firm policy."

This ostensibly is a quid pro quo for getting China's help restraining North Korea's weapons program, and should be "Exhibit 1" as evidence that Bush's policies have made the US a weaker power. Previous statements on Taiwan were ambiguous as to the status of "which" China was the "one" China, and were ambiguous about whether Taiwanese "sovereignty" was also ambiguously defined as an issue to be worked out between the Taiwanese and the mainland.

Now, in China, I'm told the big, big worry is that Taiwan might declare independence in 2008, corresponding to the time that the Olympics are to be held in China. If this happens, (and Taiwan, like Israel has been shown to be a very independent "ally" of ours) China will have a dilemma: whether to retake the island by force when the spotlight is on it, or whether to let Taiwan go independent.

If Taiwan were to do this, and if China acted as it has always promised it would - to try to retake the island, then this would be a major blow to the US, and to the Republican party, as the US would be essentially helpless to do anything.