Jilted Taiwan's grim revenge.

President Nelson Mandela pressed the button and held his breath. If he was hoping to get off lightly after ditching the Republic of China, as Taiwan prefers to be known, as a diplomatic partner, friend and ally, in favour of mainland China, he was quickly disillusioned by the furore that ensued. And the cost is being counted in billions of dollars. TOM NEVIN reports on the implication of Taiwan's retribution.

It has been only a few months since Mr Mandela publicly assured Taiwan s Vice-Premier, Mr Hsu Li-teh, on an official visit to South Africa, that the South African Government had no intention of cutting its diplomatic ties with the Chinese island republic. "To do so," he said, "would be immoral." TOM NEVIN reports on the implication of Taiwan's retribution.

Yet cut them, he did. It was a move that caught South Africa's diplomatic community, particularly the Taiwanese, completely by surprise. "The announcement was totally unexpected," said a distressed Taiwanese Consul-General, Mr Tai Feng. The diplomat had met with Mr Mandela two days before the fateful pronouncement was delivered but no mention had been made then of the fact that his country would be given a 13 month notice period in which to shut down its Pretoria Embassy.

The time South Africa has given Taiwan to pack its bags and go home - they must be gone by 31 December 1997 - is unusually long and is seen as a placatory measure to soften the blow. But it had little effect on Taiwan's anger and sense of injustice and betrayal. Retribution was swift and hugely costly to South Africa.

In the nearly three years of South Africa's majority rule, while the country was sorting out its thinking on foreign affairs, it appeared that it would adopt a "two Chinas" policy. And that was comforting for Taiwan as it seemed that a return on its investment was assured.

Taiwan was open handed when the ANC was contesting the 1994 non-racial elections - it gave the ANC R10m as opposed to mainland China's R2m - and was generous to a fault in funding South Africa's subsequent reconstruction and development programme. It urged the Taiwanese business community to get involved in South African projects. Only recently, it agreed to bank-roll a R13.8bn petrochemical project in the economically depressed Eastern Cape province.

Taiwan should have known better than to hope that South Africa could sustain friendly ties with both Chinas. There could never be any prospect of South Africa establishing formal links with mainland China while Taiwan had a Pretoria diplomatic address. And perhaps, Taiwan should have seen the blow coming since President Mandela had been dropping broad hints.

"The People's Republic of China has got the biggest population in the world, an economy with a growth rate of 12% and is permanently represented on the UN Security Council," he told a Johannesburg press briefing recently. If Taipeh had been keeping an eye on the trade figures, it would have noted that since 1991, around R22.5bn worth of trade has been conducted between South Africa and mainland China and Hong Kong and some R20bn with Taiwan.

Despite the political howls of protest, it in unlikely that Taiwan's trading performance with South Africa will be much changed because of the reduced diplomatic status, nor will it greatly affect the day-to-day business of the 620 Taiwanese companies that have invested R1.8bn in South Africa and employ more than 40,000 people in their enterprises.

But where South Africa will feel the financial pain most is in Taiwan's multi-billion rand development assistance spread over a wide range of social and institutional projects. So far, Taiwan has halted 17 cooperation projects with South Africa worth R20bn. It has also recalled its Ambassador and suspended South African Airways twice weekly flights between Johannesburg and Taipeh.

Money, politics or ideology?

"We give SAA two months to prepare to stop the flights," announced Taiwanese Foreign Minister Mr Chang Hsiauyen, adding that flights could resume once, "we have achieved a satisfactory framework for our future ties."

What prompted the decision to ditch Taiwan in favour of the People's Republic? Was it money, politics or ideology? That depends on who you listen to but it was most probably a measure of each.

Leader of the Nationalist Party opposition, Mr F W de Klerk, suggested that it was further evidence of the influence the South African Communist party (SACP) has on Government policy (the South African Government is an alliance of the ANC, the SACP and Cosatu, the labour movement).

There is also speculation that Beijing held Mr Mandela's foot to the fire, warning of the dire consequences that could ensue following Hong Kong's handover in July this year, specifically the questions of landing rights and South Africa's position in that primary international banking and trading centre. Without diplomatic representation in Beijing, none of that is possible.

And then there's the money. China will spend nearly R5 trillion over the next ten years on infrastructure projects alone. And South Africa wants a slice of that financial action.

And finally, why now? Why did Mr Mandela pick this particular moment to perform a task that was clearly the most difficult of his tenure as President? All he would say, somewhat testily, to reporters pressing for an answer after the announcement was "because it was the most appropriate time".

However, it is generally agreed that Mr Mandela wants to leave a clean desk for his successor. When he stands down in 1999 he doesn't want his heir, probably Mr Thabo Mbeki, to inherit problems as prickly as Taiwan. They're best dealt with immediately and their consequences healed by time, between now and then.