More fun out of China. First, Reuters reports that Chinese dancers stole the ROC flag, claiming that Taiwan is not a nation.

“This incident made us really mad. They have never tried to steal our flags before,” said Antonio Chen, director general of the ministry’s West Asia department. “Usually (China) goes through diplomatic channels to protest against us.”

First, on July 4, the 10-person Chinese troupe removed Taiwan’s flag from the Israeli stage, Chen said. Later in the day, Taiwan’s 10-strong troupe carried the flags back on stage, he said.

The next day, the Chinese Embassy in Israel protested, saying Taiwan was not a nation. The organisers decided to ban all flags except the host’s, Chen said — but the China dancers displayed theirs again at a parade, prompting Taiwan to do the same.

Taiwan asked that its group be separated from the Chinese dancers at future annual events, Chen said.

A local newspaper then reports that the High Speed Rail, always hungry for money, is worried that Chinese investment may leak into its funding portfolio:

Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) could have difficulty getting its hands on a NT$15.8 billion (US$481.3 million) loan from US investment bank Lehman Brothers given government concerns that it may involve funds from China.

“We have followed the rules in applying for the loan … We can only wait for the government’s final decision,” THSRC spokesman Arthur Chiang (江金山) said in a telephone interview yesterday.

THSRC, the operator of the nation’s high speed rail, secured a NT$65.5 billion syndicated loan from Lehman Brothers and seven local banks, including Taipei Fubon Bank (台北富邦銀行), Taishin International Bank (台新銀行) and Fuhwa Commercial Bank (復華銀行), in May.

Of the total, Lehman Brothers will provide NT$15.8 billion, with THSRC using the right to develop five major stations — Taoyuan, Hsinchu, Taichung, Chiayi and Tainan — for 50 years as collateral for the loan.

As Lehman Brothers and IBM Corp had established a China Investment Fund with an initial capitalization of US$180 million last October, some Taiwanese officials have voiced concerns that the loan might involve Chinese funds, allowing China to control the right to develop THSRC stations, the Chinese-language China Times reported yesterday.

Chinese investments are banned in Taiwan.

Some Chinese investment here might be just the trick to give the economy a push, guys.

Next, the IHT reports that US intelligence is concerned about China’s growing belief it can localize a war over Taiwan:

A U.S. intelligence officer on Tuesday said China appeared to have too much confidence that it could manipulate the scale of a war with rival Taiwan.

Lonnie Henley, an East Asia specialist in the office of the Director of National Intelligence, said Chinese officials are increasingly studying the concept of “war control” to evaluate scenarios should fighting break out with Taiwan.

“Their confidence in their ability to modulate the intensity, scope, pace, etc., of the conflict is probably misplaced, and that is dangerous for all concerned,” Henley told an audience at the Carnegie Endowment for International Peace.

Finally, AP reports that Olympic officials from Taiwan are meeting their counterparts in Beijing to discuss everything except the torch:

A Taiwanese Olympic official will meet with Beijing counterparts next month to discuss procedures for the 2008 Beijing Summer Olympics, but the contentious route of the torch relay will not come up, a Taiwanese official said Monday.

Earlier, Taiwanese cable TV news station CTI reported that the torch’s route could be on the agenda during the meeting, which in addition to delegates from Taiwan and China, will also involve representatives from other members of the International Olympic Committee.

In April, Taiwan scuttled plans to be part of the elaborate torch relay that will cross five continents in the immediate run-up to the games. The move embarrassed Beijing officials, who announced the route only two hours before the Taiwanese backed out.

Speaking to The Associated Press, the Taiwanese Olympic official said the island would send a midlevel representative to the August meeting, which would concentrate on logistical arrangements for the summer games.

This article has a really interesting formulation of the “they split amid civil war” catechism:

The torch relay controversy highlighted the prickly relations between China and Taiwan, which split amid civil war more than five decades ago. China wants Taiwan to unify, but the democratic island has repeatedly refused.

Note that it works in something about Taiwan’s democracy, and doesn’t say “RE-unify.” That’s progress, baby, an excellent formulation that actually starts to approach reality. I had the chance to speak with an international news reporter on this topic last week, and he pointed out that it is hard to find a pithy way to describe the truth — that China and Taiwan didn’t split, since Taiwan was then part of Japan, and it was the KMT and the Chinese Communists who split. He also added that split, which can be transitive or intransitive, was an excellent verb. I admit the grammar angle hadn’t occurred to me.