Taiwan's two most powerful neighbors are currently locked in a historic battle. This is part of a complex political tussle between the two nations, and Beijing is also using the rising tide of anti-Japanese nationalist sentiment that it has generated to achieve domestic political goals.
Historically, Taiwanese are predominantly of Chinese decent, but at the same time, Taiwan benefited from modernization under the Japanese colonial regime, so its position in this conflict is somewhat embarrassing.
Taiwan has a close relationship with Japan, but at the same time has a deep sympathy for the suffering of the Chinese people at the hands of the Japanese, so Taiwan wants to avoid taking sides in this historical struggle. Taiwanese have also endured the experience of the White Terror perpetrated by the Chinese Nationalist Party (KMT), giving them common ground with the intelligensia in China.
http://www.taipeitimes.com/News/edit/archives/2005/04/21/2003251362