Since Chairman Mao's declaration of the People's Republic 50 years ago Beijing has always regarded the island of Taiwan as a renegade province.

As the Kuomintang forces of General Chiang Kai-shek retreated to the island, rival governments on both sides of the Taiwan Straits insisted on their claim to rightful sovereignty over all Chinese territory.

Over the years relations between the two governments have been frosty at best and on a number of occasions have threatened to boil over into all-out war.

Beijing insists that Taiwan cannot be allowed to achieve full independence and says it will use force if necessary to prevent it from doing so.

Communist threat

China says it will use force to prevent Taiwanese independence

In the immediate aftermath of the communist's seizure of power the nationalist Kuomintang regime held its position as the internationally-recognised government of China and retained its seat at the UN.

At a time of domino theories and the apparent threat of global communism, Washington saw Taiwan as a fortress that needed to be reinforced.

Bolstered by massive US military and financial support the island was able to hold its own in a series of clashes with mainland forces.

But by the late 1960s the power politics of the Cold War and the communist split between Beijing and Moscow meant the US saw Mao's People's Republic as a useful ally in its efforts to isolate the Soviet Union.

Secret negotiations led to President Richard Nixon's historic visit to Beijing in 1971.

These paved the way for Beijing's accession to China's seat at the UN - and ultimately for full diplomatic relations between China and the US.

'One China'

In line with Beijing's insistence on their being just "One China", Washington ended diplomatic relations with Taiwan in 1979 although it gave vague guarantees of Taiwanese security.

For years Beijing and Taipei maintained their own cold war - rarely even acknowledging the other's existence.

US naval power was deployed in 1996 to keep a lid on tensions

Talks on possible reunification eventually began in 1993, but they were broken off by China two years later, angry at Taiwan's apparent attempts to forge an independent international profile.

A private visit by Taiwanese President Lee Teng-hui's to the US in 1995 and the island's first democratic presidential elections the following year sparked a series of sabre-rattling Chinese military exercises close to Taiwan.

Washington became so alarmed that it sent two aircraft carrier battle groups to the Taiwan Straits. It was the largest American show of force in the region since the Vietnam War.

At the same time Washington praised Taiwan's 1995 elections as proof that western-style democracy could work in a Chinese society.

Such statements further infuriated Beijing.

Economic impetus

As China opened up under the reformist policies of Deng Xiaoping a steady rise in economic, cultural, family and business links have produced a subtle but potent impetus to closer formal ties.

President Lee Teng-hui: Taiwan's first democratically elected leader

Taiwan maintains a ban on direct investment in the mainland, but this has not stopped upwards of $13bn of Taiwanese money flowing into China via companies in Hong Kong.

Now that Hong Kong has returned to the arms of the motherland - and Macau is set to follow suit next year - Beijing's eyes are firmly focussed on Taiwan.

In the eyes of the Chinese leadership the renegade island is the last piece of the jigsaw that will complete a long cherished dream of Chinese unity.

Slowly both sides have shown a willingness to talk on practical issues that drive them together, particularly on economic and trade links.

Many Taiwanese have relations in Fujian, the closest mainland province, and speak the same dialect.

Fujian has done well from Taiwanese investment, but Beijing is keen to encourage investment elsewhere in the country to iron out a growing economic divide between coastal and inland provinces.

Historic handshake: both sides agree it is important to keep talking

Beijing wants Taiwan to accept reunification on much the same terms as Hong Kong - the so-called "one country, two systems" formula.

Taiwan, however, has said it will only consider unification if the mainland becomes more democratic.

Even then it points to the wide disparity in wealth between Taiwan - the epitome of the Asian economic miracle - and the still largely rural mainland that would cause immense problems in a unified state.

As a result Taiwan says Beijing must acknowledge the de facto reality of Taiwanese nationhood in conducting bilateral relations.

Decades of separation have generated an increasingly wide gulf between Taiwan and the mainland.