The conflict of national identities has surfaced as the most salient issue in Taiwan’s politics since the country became a full-fledged democracy in the late 1980’s. The studies on nationalism in Taiwan have also been mushrooming in the recent years. Many previous studies have found a steady trend of identity change in the past decade among the general populace: the rise of Taiwanese identity with the decline of Chinese identity. Using the data collected in a panel study of interview surveys conducted in 1998 and 2000, this paper however finds the high volatility of national identity among the general public. Significant portions in all three major nationalist groups, namely the Taiwanese nationalists, the Chinese nationalists, and the pragmatists, had changed their identities in the period of two years. This paper also weighs the effects of material interests and affection as two contrary factors on the change of national identity. While the former, coming from the economic inducement of China, drags people away from the position of Taiwan independence, the latter, based on the cultural-ethnic identity with Taiwan, consolidates this position. This paper finds that in the particular period when the surveys were conducted, the consolidating effect of the ethnic-cultural identity on Taiwanese national identity seemed surpassing the straying effect of rational calculation of material interests.