China’s Taiwan policy has been one of coupling intimidation (the “stick” approach) with coercion (the “carrot” approach), a policy mix which, in the near term, is not likely to change, as is evidenced by the passage of the “Anti-Secession Law” in March, 2005. However, under Hu Jintao, the focus has been on pragmatism. The warm atmosphere that presently reigns in the Taiwan Strait area is unprecedented. Further talks are expected before the two cross-Strait leaders are slated to step down, simultaneously, in 2012. An era of reconciliation and negotiations has dawned. For the first time there is consensus regarding norms of interaction between the two sides. Cross-Strait relations have stabilized after years of tumult. More open, stable and predictable cross-Strait relations are in the interests of both sides. Difficulties surely lie ahead, but they will be dealt with in a different manner than what has been witnessed in the past.