How do you imagine China would react to this?
Besides what we've changed about Taiwan it's pretty much the policy that we've had before and of course they aren't happy about them. With Taiwan I doubt they are very happy either but of course they won't do anything about it. We have just recognized the country as independent, we haven't recognized them as China. They have always made threats about retaking Taiwan but in today's climate they probably never will.
What I can tell you is that they will take it far better, and it won't affect us as much, as what many, including I think you (correct me if I'm wrong) wanted me to do which was put some sanctions, if not complete sanctions against China. That would make relations between our countries really bad besides wreck our economy since we are so closely tied. As well as that I don't believe we should boycott the olympics or the opening ceremonies because it's an athletic event, not political.
Just FTR, it's not necessarily that I wanted sanctions on China, but that I wanted consistency with the application of sanctions. It seems the reason sanctions were not placed on China was that it would hurt ourselves, but nonetheless we saw fit to put sanctions on countries with much lesser human rights violations, simply because that wouldn't hurt us so much.
(I also think there's no telling what China would do if such declarations about Tibet and Taiwan were made in RL, particularly recognising Taiwanese independence. I don't think there's any telling how China would react, but I would expect something very dramatic.)
