updated 6/22/2009 4:44:31 PM ET 2009-06-22T20:44:31

The United States dedicated the grounds for a new representative office in Taiwan on Monday, making a visible commitment to the island at a time its rapidly improving ties with longtime foe China are diminishing U.S. influence.

Construction of the new $170 million American Institute in Taiwan — the de facto embassy since Washington switched recognition to Beijing 30 years ago — is meant to underscore continuing U.S. interest in what was once a key ally, but has since become something of a strategic afterthought. The highest profile Taiwanese official on hand was the National Security Council head, Su Chi, the main architect of Taiwan's ambitious China opening.

In his 13 months in office Taiwanese President Ma Ying-jeou has moved decisively to upgrade economic and political ties with China, lessening tensions across the Taiwan Strait and mending a split that dates to the Chinese civil war 60 years ago.

That has raised questions if the U.S. isn't being left behind in an area where it had a vital stake during the Cold War.

"Washington is preoccupied with the economic recession and peace keeping work in Afghanistan and Iraq as well as nuclear challenges from Iran and North Korea," the English-language Taipei Times said in a recent commentary, citing Taiwan Thinktank official Lai I-chung.

"The U.S. is likely to pay little attention to the Taiwan Strait and therefore regards 'no news as good news' when it comes to cross-strait affairs."

In the 1950s and '60s the U.S. based thousands of American troops on Taiwan and is still bound by law to aid the island's defense. But Washington is ever more reliant on Beijing's help to address everything from the global economic crisis to the North Korean nuclear threat.

Relations with China evolve
"We don't know if China is going to become an aggrieved, nationalistic power or whether it's going to move toward liberalism," said international relations specialist and Taiwan partisan Arthur Waldron of the University of Pennsylvania. "Whichever way it goes is going to have a huge impact both in Taiwan and the U.S."

Speaking at Monday's dedication, American Institute in Taiwan director Stephen Young emphasized the common values between the U.S. and Taiwan, while ignoring the delicate question of Taiwan's China ties and its meaning for the U.S.

Close Taiwan-American ties "are embodied in ... our shared embrace of democracy and the free market," he said.

Since taking power last May, Ma has jettisoned the more China-wary policies of his predecessors and instead moved the economies ever closer together and mooted the possibility of a peace treaty between the sides.

Officially, Washington says that improving relations between Taiwan and China are a plus for the U.S., decreasing the chances American forces would be dragged into a conflict.

"This era of cross-strait stability is very favorable to U.S. interests," said veteran U.S. diplomat Ray Burghardt, Young's U.S.-based boss.

The threat of conflict remains. What kind of power China will be is still uncertain, making rapprochement risky for Taiwan. Washington cannot afford to disengage: a failure to support Taiwan in a crisis could send the wrong signal to allies South Korea and Japan about U.S. steadfastness.

"The rise of China only intensifies regional anxiety," said Taiwan scholar Shelley Rigger of North Carolina's Davidson College. "So for the U.S. to withdraw its commitment would be incredibly destabilizing."

Arms sales in the works
A big test of the Obama administration's commitment will be if it continues with robust arms sales to Taiwan, including a pending deal for 66 relatively advanced F-16 jet fighters. A final decision on that deal could come late this year.

Taiwan supporters like Waldron believe Washington must ignore Chinese objections and proceed with arms sales that maintain the strategic balance between Taiwan and the mainland.

Waldron also warns of bigger strategic risks for the U.S. should Taipei and Beijing grow so close that China gains a significant military foothold on the island as part of some future political settlement.

"Because of Taiwan's location, if China were able to use it as a base, it would be able to project a far greater threat in the region than it does now," he said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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