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Tourists visit the Ci Lake, in Kinmen, Taiwan, a large lake next to the sea facing Xiamen, China, on Sept. 23.ANNABELLE CHIH/Getty Images

The musty bomb shelter buried five metres below his family’s ancestral shrine is a bleak reminder for Andy Wang of how his home, on the front line between Taiwan and China, was for many years a fierce battleground between two governments.

Mr. Wang, 36, lives on Kinmen Island, one of Taiwan’s outlying possessions that also lies less than 10 kilometres from the mainland. It may be governed from Taipei, 200 kilometres away, but China looms large in the minds of its 60,000 residents.

People in Kinmen are eager for an unwinding of COVID-19 travel restrictions so throngs of mainland tourists can return. They talk of seeking peace with Beijing, which regards Taiwan as a renegade province and has reserved the right to annex it by force if necessary. And they hope any attack by China focuses on the main island of Taiwan and leaves them unscathed.

“There are many ways to solve the problem. War is not the only way,” said Mr. Wang, who works in film production. He’s in favour of some kind of political and economic union with China.

“Maybe we can build a commonwealth like the European Union where Taiwan is still an independent country.”

Kinmen is one of the offshore islands that the defeated Nationalist forces occupied and held as they retreated to Taiwan after losing the civil war to Mao Zedong’s Communist Party in 1949.

The relics of war litter Kinmen, which was the target of 475,000 Chinese artillery shells in 1958 alone during the Second Taiwan Strait Crisis. Between 1958 and 1979, Beijing rained down about one million shells on Kinman, though in the later years these contained propaganda leaflets.

Rusting spike barricades erected to thwart amphibious landings still ring Kinmen’s beaches. An abandoned tank lies half buried in sand. A massive broadcasting speaker, tall as a building, once blasted anti-Communist propaganda at the mainland. Now, outfitted with coloured lights, it plays soft music.

Mr. Wang, like many on Kinmen (pronounced Jeenman in Mandarin), is hoping, and betting, that he and his relatives won’t have to hide in a bomb shelter again.

Many on Kinmen point to China’s escalatory military drills in August, when People’s Liberation Army warships encircled Taiwan’s main island, as a sign that they aren’t at risk. The live-fire exercises, including firing ballistic missiles over northern Taiwan, was sparked by U.S. Speaker Nancy Pelosi’s visit to Taipei – an event that has ramped up tensions between Washington and Beijing.

“I think there is a high possibility of war,” Mr. Wang said. “But the Chinese government is targeting Taiwan’s main island rather than Kinmen.”

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The family bomb shelter was last used in the 1960s. Today it holds quite a few spiders and a bottle of rice liquor that Mr. Wang’s aunt was delighted to discover after opening the shelter for a visiting journalist.

Someone on Kinmen has found a use for all the Chinese artillery shells that poured down over more than 30 years. Blacksmith Wu Tseng-dong, 65, carves them up with a blowtorch and then forges knives that have become a hit with mainland tourists.

Until COVID-19 hit, hundreds of thousands such visitors would visit Kinmen each year, many of them making a beeline for Mr. Wu’s stores. He does business under the name “Maestro Wu.”

Travellers from cities such as Xiamen, across the water, liked the symbolism of repurposing an artifact of war, he said.

“They feel it is quite historical and symbolizes peace between Taiwan and China,” Mr. Wu said. Now, those sales are gone. “It’s really bad.”

Tourism helped Kinmen replace the business lost when Taiwan’s military drew down its presence on the island. The number of soldiers has dropped from 80,000 a few decades ago to several thousand today.

But Taipei is now adding more military assets again: It began construction in 2019 of forward deployment bases in Kinmen for elite special forces soldiers. It’s also reportedly stationing its new Bee Eye mobile radar systems to Kinmen to monitor drones and spy aircraft.

Kinmen County Councillor Tung Sen Po can see the city skyline of Xiamen, which has a population of four million, from his rooftop. He said before 1949, Kinmen was like a suburb of Xiamen – he offers the example of Brooklyn and Manhattan – but said this relationship was severed instantly when a new border was created at the end of China’s civil war.

“The war never stopped. It just took different forms,” Mr. Tung said. The councillor compared Kinmen to other Cold War border points, from the now-dismantled Berlin Wall to the demilitarized zone separating North Korea and South Korea.

“I think we’re in a second Cold War today between China and the United States.”

Mr. Tung said Kinmen’s economy has taken a hit since COVID-19 stopped travel to and from Xiamen, where thousands of his city’s residents own property. Some Kinmen shops that sold cosmetics to mainland tourists have shut down; restaurants and car rental agencies are hurting.

He said Kinmen has no choice but to restore good relations, direct trade and tourism with Xiamen: “It has to be built on a peaceful relations,” he said.

Zheng Qing-Li, 86, was a soldier on Kinmen during the Second Taiwan Strait Crisis. His most vivid memory from 1958 is when his family’s house was hit by artillery shells four times, and he and his brother were forced to tunnel out from the collapsed building so his mother and grandmother could escape the rubble. They fashioned a temporary shelter and foraged sweet potatoes from nearby fields until the shelling died down.

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He blames Ms. Pelosi for the trouble in August, accusing her of stirring up trouble to burnish her legacy.

“She’s retiring soon, and the visit was for herself,” said Mr. Zheng, who doesn’t blame Beijing for firing ballistic missiles over Taiwan. “They did it to show America they are capable.”

Mr. Wu, meanwhile, has hired extra staff in the hopes that business will pick up, and he said he could even make knives from remnants of ballistic missiles if the opportunity arose.

“As long as it’s made of steel,” he said.