This chapter summarizes cross-Strait relations since the mid-1990s and examines the prospects and challenges for a resolution to cross-Strait tensions from the domestic and political, the economic, and the strategic dimensions. It argues that despite short-term improvements in cross-Strait relations, the countervailing dynamics that have emerged as a consequence of six decades of cross-Strait relations point to endemic antagonism. The economic and socio-political context of cross-Strait relations has undergone significant changes to bring into view the prospect of permanently removing the Taiwan Strait off the list of potential flashpoints in the Asia-Pacific. The probability of China and Taiwan overcoming the contrasting perceptions of their relationship and negotiating a peace agreement that would satisfy Beijing, Taipei and Washington, remains low. Contentious relations between China and Taiwan have remained an uncomfortable legacy of the unfinished Chinese Civil War of the 1940s.