Ten years ago there was tremendous concern in Taiwan about what would happen if and when the United States broke formal diplomatic relations with the government here and officially recognized the People's Republic of China. Some people worried that the Communists would be storming the beaches the next day.

But when President Jimmy Carter finally established formal ties with Peking in 1979, a step that had been anticipated ever since President Richard Nixon visited China in early 1972, nothing really changed here. The American Embassy closed down, but an unofficial organization called the American Institute in Taiwan, staffed by diplomats on leave from the State Department, took its place, albeit in different quarters.It seems clear to this reporter, who lived in Taiwan for nearly three years during the 1970s, that Taiwan and its people are much better off now than they were a decade ago. The uncertainty over what could happen as a result of de-recognition, and the anxiety it bred, have been replaced by a sense of confidence stemming from Taiwan's tremendous economic growth and its emergence as a major player in world trade. Although Taiwan has diplomatic relations with only 23 countries, the most important being Saudi Arabia, South Africa and South Korea, it has substantive trade relations - defined as $1 million or more in annual trade - with 124 countries.

Japan broke relations with Taiwan in 1972 and immediately set up an unofficial organization to represent its interests here, but European nations were reluctant to set up any kind of offices here. After seeing how smoothly the United States handled the transition, they realized they could do it, too, without jeopardizing their relations with Peking. Today, there are 14 European trade offices here. And France has named a former ambassador to head its trade office here.

Taiwan would prefer to have formal diplomatic relations with the United States and other countries, and Vice Minister Wang Chien-Shien of the Ministry of Economic Affairs points out the absence of such ties does create problems. For example, he says that most western European nations deny Taiwan tariff privileges under the General System of Preferences, while granting such rights to South Korea.

Also, government officials and businessmen from Taiwan have problems getting visas to some countries; occasionally, they may have to wait up to two months. Some countries refuse to allow ships flying the flag of the Republic of China, as Taiwan officially calls itself, to enter their ports.

Vice Minister John H. Chang of the Ministry of Foreign Affairs points out that the absence of diplomatic relations prevents direct contacts between top government officials. He also notes that it hinders Taiwan's participation in international organization.

Despite these problems, Taiwan has coped remarkably well. It ranks as the 15th largest trading nation in the world, with exports last year totaling $30.7 billion and imports $20.1 billion. Its official per capita income last year stood at $3,100, but one prominent business executive here estimates that it would actually be closer to $5,000 if the underground economy were factored in.

Even in its economic relations with other countries, the problems caused by the lack of diplomatic relations seem to be diminishing. Mr. Wang of the Ministry of Economic Affairs points out that some countries realize they will lose trade opportunities themselves by discriminating against Taiwan and its businessmen. He notes that a recent study by the University of Pennsylvania forecast that Taiwan would have both the highest export and import growth rates in the world for the period from 1984 to 1990.

In terms of domestic politics, the government is also showing more self- confidence. Last month it announced plans to abolish martial law, which has been in effect since the late 1940s, and to permit the formation of opposition political parties. While the minister of interior has been quoted in the press as saying the new parties would not be allowed until after local elections scheduled for early December, the new Democratic Progressive Party has gone ahead and held a party convention, elected a chairman and executive committee and announced a slate of candidates. Several prominent opposition leaders arrested seven years ago are still in jail on charges of sedition, but there is speculation they may be released soon. And the overall freedom of political expression today is far greater than it was 10 years ago.

Still, Taiwan seems fated to live with uncertainty. In the 1970s, people wondered what would happen after China replaced Taiwan in the United Nations. Then, they wondered what would happen after President Chiang Kai-shek died. Next, they worried about what would happen after the United States withdrew its political recognition. In all three cases, things basically went on as usual. Now they wonder what will happen when the ailing, 76-year-old President Chiang Ching-kuo, Chiang Kai-shek's son, passes from the scene. The consensus, however, is that there would be a smooth succession with Vice President Lee Teng-hui taking the reins of power if President Chiang should pass away before his term expires in 1990. The hope, however,is that President Chiang will

serve out his term, thus making a smooth transition much easier.

While the succession issue does cast some clouds on the horizon, Taiwan's overall future appears much more secure today than it did a decade ago.

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