From the perspective of the Chinese Communist Party, Taiwan and Hong Kong are integral parts of the Chinese state. While Hong Kong has enjoyed extensive autonomy as a Special Administrative Region within the PRC since retrocession in 1997, Taiwan maintains that it is a sovereign state, the legal successor to the Republic of China founded in 1912, a name it retains to this day. In contrast to the People's Republic of China, the legislature in Taiwan has been freely elected since 1992 and the president since 1996, and the island republic is regarded worldwide as a model of democracy in Asia. Hong Kong's autonomous system, which guarantees an independent judiciary and multi-party, albeit limited, free elections, is also dramatically different from the political order in the PRC. Thus, it is not only Taiwan, but also Hong Kong, which openly challenge the PRC. This has created a constellation of potential conflicts which carry a significant risk of escalation. This lecture outlines recent political dynamics in Taiwan and Hong Kong and develops a perspective on the possibilities for maintaining a peaceful balance between the independence of these entities on the one hand and the sovereignty of the PRC on the other.