As flights took off from both sides of the Taiwan Straits for three weeks over the Lunar New Year of the Dog, hopes were high for a better year in cross-Straits ties.
But "president"Chen Shui-bian of Taiwan in fact delivered a surprisingly hard-line speech on New Year's Day, before proposing to scrap the 1998 unification guidelines and council with the Chinese mainland in his subsequent Chinese New Year's speech.
This was significant, as Chen installed his fifth administration and "premier" within six years just before the Lunar New Year, and after a disastrous year in politics for him in 2005.
More surprising was the apparent rebuke of Chen by Washington, when the State Department spokesman reiterated Washington's cross-Straits policy based on the one-China principle.
Washington termed Chen's latest Lunar New Year remarks as "inflammatory" and warned him not to upset the delicate relationships between Beijing, Washington and Taipei. For the first time, Washington also labelled Taiwan's attempts to participate in the United Nations and its related agencies (as was the recent case of Taipei trying to join the WHO) as a "unilateral change of its status quo."
Chen's new hard-line stance and Washington's rebuke both came in the aftermath of an electoral defeat of Chen's party, the Democratic Progressive Party (DPP), when it was severely thrashed at last December's county and municipal elections, in the face of a spectacular advance of the opposition Kuomintang (KMT) in these regional polls.
The morale of the ruling party is reported to have sunken to an all-time low, just as a "restructuring" KMT rises in political prominence, reportedly with 2,200 new members joining its ranks every month since Ma Ying-jeou took over its chairmanship, following an internal landslide victory.
Former "premier" Yu Shyi-kun was elected by DPP members to chair the party, but the DPP turnout was hardly a dismal 20 per cent of members, which confirmed the sagging morale of the ruling party.
At the same time, Chen's own electoral support was reported to have crumbled to a record 10 per cent low.
It is in this internal context that Chen could be naturally expected to harden his political line, as he enters his last two twilight years in office.
Chen is probably mulling over his own political legacy and would surely be tempted to revise the present "constitution" and call for a referendum to do so in moves that will definitely infuriate Beijing and send cross-Straits relations into a tailspin.
Washington's equally tough stance on Chen appears to be a preventive action against him for "crossing the red line" with Beijing, as US Deputy Secretary of State Robert Zoellick would probably have assured Beijing during a third round of strategic dialogue held recently.
In fact, some political observers have also advanced the theory that the recent departure of Douglas Paal, director of the American Institute in Taiwan (AIT), could have given Chen the opening to show his own displeasure with Washington for having controlled his political manoeuvres through Paal.
Some others saw Chen wanting to test Washington's limits, especially before the arrival of the new director in Taipei. This mutual "test of wills" will dictate cross-Straits ties in the next two years.
In fact, the US appears to have already noticed the pragmatic mainland philosophy on cross-Straits ties.
In a visit to Xiamen, Fujian Province, Hu praised Taiwan businessmen for their contributions to cross-Straits ties and assured them of the mainland's full support for their businesses Hu promised to open lucrative Beijing 2008 Olympic Games projects as well.
Beijing is poised to deliver three gifts (besides the extended chartered flights this year) to Taipei the two pandas, "unilateral opening" of the mainland to Taiwan-grown fruits and vegetables, and allowing mainland tourists to visit Taiwan, as is the case in Hong Kong, which has effectively helped bolster its economy.
Aside from economic initiatives, Beijing also stressed that it could work politically within the confines of the 1992 Consensus.
The independence lobby in Taiwan is therefore determined to raise its stakes in the next two years as this appears to be a make-or-break timeframe before it is confronted with a reunification ultimatum from the other side, should the KMT return to power in 2008.
The author is a business consultant and strategist, Council Secretary of the Singapore Institute for International Affairs.