Taiwan

/tuy"wahn"/, n. Wade-Giles, Pinyin.

a Chinese island separated from the SE coast of China by Taiwan Strait: a possession of Japan 1895-1945; restored to China 1945; seat of the Republic of China since 1949. Cap.: Taipei. Also called Formosa.

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Taiwan

Introduction Taiwan -
Background: In 1895, military defeat forced China to cede Taiwan to Japan, however it reverted to Chinese control after World War II. Following the Communist victory on the mainland in 1949, 2 million Nationalists fled to Taiwan and established a government using the 1947 constitution drawn up for all of China. Over the next five decades, the ruling authorities gradually democratized and incorporated the native population within its governing structure. This culminated in 2000, when Taiwan underwent its first peaceful transfer of power from the Nationalist to the Democratic Progressive Party. Throughout this period, the island has prospered to become one of East Asia's economic "Tigers." The dominant political issues continue to be the relationship between Taiwan and China - specifically the question of eventual unification - as well as domestic political and economic reform. Geography Taiwan
Location: Eastern Asia, islands bordering the East China Sea, Philippine Sea, South China Sea, and Taiwan Strait, north of the Philippines, off the southeastern coast of China
Geographic coordinates: 23 30 N, 121 00 E
Map references: Southeast Asia
Area: total: 35,980 sq km note: includes the Pescadores, Matsu, and Quemoy water: 3,720 sq km land: 32,260 sq km
Area - comparative: slightly smaller than Maryland and Delaware combined
Land boundaries: 0 km
Coastline: 1,566.3 km
Maritime claims: exclusive economic zone: 200 NM territorial sea: 12 NM
Climate: tropical; marine; rainy season during southwest monsoon (June to August); cloudiness is persistent and extensive all year
Terrain: eastern two-thirds mostly rugged mountains; flat to gently rolling plains in west
Elevation extremes: lowest point: South China Sea 0 m highest point: Yu Shan 3,997 m
Natural resources: small deposits of coal, natural gas, limestone, marble, and asbestos
Land use: arable land: 24% permanent crops: 1% other: 75%
Irrigated land: NA sq km
Natural hazards: earthquakes and typhoons Environment - current issues: air pollution; water pollution from industrial emissions, raw sewage; contamination of drinking water supplies; trade in endangered species; low-level radioactive waste disposal Environment - international party to: none of the selected
agreements: agreements because of Taiwan's international status signed, but not ratified: none of the selected agreements because of Taiwan's international status
Geography - note: strategic location adjacent to both the Taiwan Strait and the Luzon Strait People Taiwan -
Population: 22,548,009 (July 2002 est.)
Age structure: 0-14 years: 21% (male 2,464,290; female 2,268,627) 15-64 years: 70% (male 8,010,014; female 7,774,296) 65 years and over: 9% (male 1,053,975; female 976,807) (2002 est.)
Population growth rate: 0.78% (2002 est.)
Birth rate: 14.21 births/1,000 population (2002 est.)
Death rate: 6.08 deaths/1,000 population (2002 est.)
Net migration rate: -0.3 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.08 male(s)/female under 15 years: 1.09 male(s)/female 15-64 years: 1.03 male(s)/female 65 years and over: 1.08 male(s)/ female total population: 1.05 male(s)/ female (2002 est.)
Infant mortality rate: 6.8 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 76.74 years female: 79.71 years (2002 est.) male: 73.99 years
Total fertility rate: 1.76 children born/woman (2002 est.) HIV/AIDS - people living with HIV/ NA
AIDS:
HIV/AIDS - deaths: NA
Nationality: noun: Chinese (singular and plural) adjective: Chinese
Ethnic groups: Taiwanese (including Hakka) 84%, mainland Chinese 14%, aborigine 2%
Religions: mixture of Buddhist, Confucian, and Taoist 93%, Christian 4.5%, other 2.5%
Languages: Mandarin Chinese (official), Taiwanese (Min), Hakka dialects
Literacy: definition: age 15 and over can read and write total population: 86% (1980 est.) male: 93% (1980 est.) female: 79% (1980 est.) note: literacy for the total population has reportedly increased to 94% (1998 est.) Government Taiwan -
Country name: conventional long form: none conventional short form: Taiwan local short form: T'ai-wan local long form: none former: Formosa
Government type: multiparty democratic regime headed by popularly elected president and unicameral legislature
Capital: Taipei Administrative divisions: the central administrative divisions include the provinces of Fu-chien (some 20 offshore islands of Fujian Province including Quemoy and Matsu) and Taiwan (the island of Taiwan and the Pescadores islands); Taiwan is further subdivided into 16 counties (hsien, singular and plural), 5 municipalities* (shih, singular and plural), and 2 special municipalities** (chuan-shih, singular and plural); Chang-hua, Chia-i, Chia-i*, Chi-lung*, Hsin- chu, Hsin-chu*, Hua-lien, I-lan, Kao-hsiung, Kao-hsiung**, Miao-li, Nan-t'ou, P'eng-hu, P'ing-tung, T'ai-chung, T'ai-chung*, T'ai-nan, T'ai-nan*, T'ai-pei, T'ai-pei**, T'ai-tung, T'ao-yuan, and Yun-lin; the provincial capital is at Chung- hsing-hsin-ts'un note: Taiwan uses the Wade-Giles system for romanization
National holiday: Republic Day (Anniversary of the Chinese Revolution), 10 October (1911)
Constitution: 1 January 1947, amended in 1992, 1994, 1997, and 1999
Legal system: based on civil law system; accepts compulsory ICJ jurisdiction, with reservations
Suffrage: 20 years of age; universal
Executive branch: chief of state: President Shui-bian CHEN (since 20 May 2000) and Vice President Annette Hsiu-lien LU (since 20 May 2000) election results: Shui-bian CHEN elected president; percent of vote - Shui-bian CHEN (DPP) 39.3%, James SOONG (independent) 36.84%, LIEN Chan (KMT) 23.1%, HSU Hsin-liang (independent) 0.63%, LEE Ao (CNP) 0.13% elections: president and vice president elected on the same ticket by popular vote for four-year terms; election last held 18 March 2000 (next to be held NA March 2004); premier appointed by the president; vice premiers appointed by the president on the recommendation of the premier head of government: Premier (President of the Executive Yuan) Shyi-kun YU (since 1 February 2002) and Vice Premier (Vice President of the Executive Yuan) Hsin-yi LIN (since 1 February 2002) cabinet: Executive Yuan appointed by the president
Legislative branch: unicameral Legislative Yuan (225 seats - 168 elected by popular vote, 41 elected on the basis of the proportion of islandwide votes received by participating political parties, eight elected from overseas Chinese constituencies on the basis of the proportion of islandwide votes received by participating political parties, eight elected by popular vote among the aboriginal populations; members serve three- year terms) and unicameral National Assembly (300 seat nonstanding body; delegates nominated by parties and elected by proportional representation within three months of a Legislative Yuan call to amend the Constitution, impeach the president, or change national borders) elections: Legislative Yuan - last held 8 December 2001 (next to be held NA December 2004); note - the National Assembly is a nonstanding body and is called into session election results: Legislative Yuan - percent of vote by party - DPP 39%, KMT 30%, PFP 20%, TSU 6%, independents and other parties 5%; seats by party - DPP 87, KMT 68, PFP 46, TSU 13, independents and other parties 11
Judicial branch: Judicial Yuan (justices appointed by the president with consent of the National Assembly; note - beginning in 2003, justices will be appointed by the president with consent of the Legislative Yuan) Political parties and leaders: Democratic Progressive Party or DPP [Frank Chang-ting HSIEH, chairman]; Kuomintang or KMT (Nationalist Party) [LIEN Chan, chairman]; People First Party or PFP [James Chu-yu SOONG, chairman]; Taiwan Solidarity Union or TSU [Chu-wen HUANG, chairman]; other minor parties Political pressure groups and Taiwan independence movement,
leaders: various business and environmental groups note: debate on Taiwan independence has become acceptable within the mainstream of domestic politics on Taiwan; political liberalization and the increased representation of opposition parties in Taiwan's legislature have opened public debate on the island's national identity; a broad popular consensus has developed that Taiwan currently enjoys de facto independence and - whatever the ultimate outcome regarding reunification or independence - that Taiwan's people must have the deciding voice; advocates of Taiwan independence oppose the stand that the island will eventually unify with mainland China; goals of the Taiwan independence movement include establishing a sovereign nation on Taiwan and entering the UN; other organizations supporting Taiwan independence include the World United Formosans for Independence and the Organization for Taiwan Nation Building International organization APEC, AsDB, BCIE, ICC, ICFTU, IFRCS,
participation: IOC, WCL, WTrO Diplomatic representation in the US: none; unofficial commercial and cultural relations with the people of the US are maintained through an unofficial instrumentality, the Taipei Economic and Cultural Representative Office (TECRO) in the US with headquarters in Taipei and field offices in Washington and 12 other US cities Diplomatic representation from the none; unofficial commercial and
US: cultural relations with the people on Taiwan are maintained through an unofficial instrumentality - the American Institute in Taiwan (AIT) - which has offices in the US and Taiwan; US office located at 1700 N. Moore St., Suite 1700, Arlington, VA 22209-1996, telephone: [1] [phone], FAX: [1] [phone]); Taiwan offices located at #7 Lane 134, Hsin Yi Road, Section 3, Taipei, Taiwan, telephone: [886] (2) 2709-2000, FAX: [886] (2) 2702-7675; #2 Chung Cheng 3rd Road, 5th Floor, Kaohsiung, Taiwan, telephone: [886] (7) 224-0154 through 0157, FAX: [886] (7) 223-8237; and the American Trade Center, Room 3208 International Trade Building, Taipei World Trade Center, 333 Keelung Road Section 1, Taipei, Taiwan 10548, telephone: [886] (2) 2720-1550, FAX: [886] (2) 2757-7162
Flag description: red with a dark blue rectangle in the upper hoist-side corner bearing a white sun with 12 triangular rays Economy Taiwan
Economy - overview: Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In keeping with this trend, some large government-owned banks and industrial firms are being privatized. Real growth in GDP has averaged about 8% during the past three decades. Exports have provided the primary impetus for industrialization. The trade surplus is substantial, and foreign reserves are the world's third largest. Agriculture contributes 2% to GDP, down from 35% in 1952. Traditional labor-intensive industries are steadily being moved offshore and replaced with more capital- and technology-intensive industries. Taiwan has become a major investor in China, Thailand, Indonesia, the Philippines, Malaysia, and Vietnam; 50,000 Taiwanese businesses are established in China. Because of its conservative financial approach and its entrepreneurial strengths, Taiwan suffered little compared with many of its neighbors from the Asian financial crisis in 1998-99. The global economic downturn, however, combined with poor policy coordination by the new administration and increasing bad debts in the banking system, pushed Taiwan into recession in 2001, the first whole year of negative growth since 1947. Unemployment also reached a level not seen since the 1970s oil crisis.
GDP: purchasing power parity - $386 billion (2001 est.)
GDP - real growth rate: -2.2% (2001 est.)
GDP - per capita: purchasing power parity - $17,200 (2001 est.) GDP - composition by sector: agriculture: 2% industry: 32% services: 66% (2000 est.) Population below poverty line: 1% (2000 est.) Household income or consumption by lowest 10%: NA%
percentage share: highest 10%: NA% Distribution of family income - Gini 32.6 (2000)
index: Inflation rate (consumer prices): 0.5% (2001 est.)
Labor force: 9.8 million (2001 est.) Labor force - by occupation: services 56%, industry 36%, agriculture 8% (2001 est.)
Unemployment rate: 4.5% (2001 est.)
Budget: revenues: $36 billion expenditures: $36.1 billion, including capital expenditures of $NA (2002 est.)
Industries: electronics, petroleum refining, chemicals, textiles, iron and steel, machinery, cement, food processing Industrial production growth rate: -5% (2001 est.) Electricity - production: 149.78 billion kWh (2000) Electricity - production by source: fossil fuel: 69.48% hydro: 5.82% other: 0% (2000) nuclear: 24.7% Electricity - consumption: 139.295 billion kWh (2000)
Electricity - exports: 0 kWh (2000)
Electricity - imports: 0 kWh (2000)
Agriculture - products: rice, corn, vegetables, fruit, tea; pigs, poultry, beef, milk; fish
Exports: $122 billion (f.o.b., 2001)
Exports - commodities: machinery and electrical equipment 55%, metals, textiles, plastics, chemicals
Exports - partners: US 23.5%, Hong Kong 21.1%, Europe 16%, ASEAN 12.2%, Japan 11.2% (2000)
Imports: $109 billion (f.o.b., 2001)
Imports - commodities: machinery and electrical equipment 50%, minerals, precision instruments
Imports - partners: Japan 27.5%, US 17.9%, Europe 13.6%, South Korea 6.4% (2000)
Debt - external: $40 billion (2000)
Currency: new Taiwan dollar (TWD)
Currency code: TWD
Exchange rates: new Taiwan dollars per US dollar - 34.494 (yearend 2001), 33.082 (yearend 2000), 31.395 (yearend 1999), 32.216 (1998), 32.052 (1997), 27.5 (1996)
Fiscal year: 1 July - 30 June (up to FY98/99); 1 July 1999 - 31 December 2000 for FY00; calendar year (after FY00) Communications Taiwan - Telephones - main lines in use: 12.49 million (September 2000) Telephones - mobile cellular: 16 million (September 2000)
Telephone system: general assessment: provides telecommunications service for every business and private need domestic: thoroughly modern; completely digitalized international: satellite earth stations - 2 Intelsat (1 Pacific Ocean and 1 Indian Ocean); submarine cables to Japan (Okinawa), Philippines, Guam, Singapore, Hong Kong, Indonesia, Australia, Middle East, and Western Europe (1999) Radio broadcast stations: AM 218, FM 333, shortwave 50 (1999)
Radios: 16 million (1994) Television broadcast stations: 29 (plus two repeaters) (1997)
Televisions: 8.8 million (1998)
Internet country code: .tw Internet Service Providers (ISPs): 8 (2000)
Internet users: 11.6 million (2001) Transportation Taiwan -
Railways: total: 1,108 km narrow gauge: 1,108 km 1.067-m gauge (519 km electrified) note: in addition to the above routes in common carrier service, there are several thousand kilometers of 1.067-m gauge routes that are dedicated to industrial use (2001)
Highways: total: 34,901 km paved: 31,271 km (including 538 km of expressways) unpaved: 3,630 km (1998 est.)
Waterways: NA
Pipelines: petroleum products 3,400 km; natural gas 1,800 km (1999)
Ports and harbors: Chi-lung (Keelung), Hua-lien, Kao- hsiung, Su-ao, T'ai-chung
Merchant marine: total: 152 ships (1,000 GRT or over) totaling 4,262,451 GRT/6,596,950 DWT note: includes some foreign-owned ships registered here as a flag of convenience: Hong Kong 3, Japan 1 (2002 est.) ships by type: bulk 40, cargo 28, combination bulk 3, container 53, petroleum tanker 17, refrigerated cargo 9, roll on/roll off 2
Airports: 39 (2001) Airports - with paved runways: total: 36 over 3,047 m: 8 2,438 to 3,047 m: 9 914 to 1,523 m: 8 under 914 m: 3 (2001) 1,524 to 2,437 m: 8 Airports - with unpaved runways: total: 3 1,524 to 2,437 m: 1 under 914 m: 2 (2001)
Heliports: 3 (2001) Military Taiwan -
Military branches: Army, Navy (including Marine Corps), Air Force, Coast Guard Administration, Armed Forces Reserve Command, Combined Service Forces Command Military manpower - military age: 19 years of age (2002 est.) Military manpower - availability: males age 15-49: 6,575,625 (2002 est.) Military manpower - fit for military males age 15-49: 5,018,882 (2002
service: est.) Military manpower - reaching males: 198,766 (2002 est.)
military age annually: Military expenditures - dollar $8,041.2 million (FY01)
figure: Military expenditures - percent of 2.8% (FY01)
GDP: Transnational Issues Taiwan - Disputes - international: involved in complex dispute over the Spratly Islands with China, Malaysia, Philippines, Vietnam, and possibly Brunei; Paracel Islands occupied by China, but claimed by Taiwan and Vietnam; claims Japanese- administered Senkaku-shoto (Senkaku Islands/Diaoyu Tai), as does China
Illicit drugs: regional transit point for heroin and methamphetamine; major problem with domestic consumption of methamphetamine and heroin

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formerly Formosa

Island, off southeastern China, and principal component of the Republic of China (which also includes Matsu and Quemoy islands and the Pescadores).

Area: 13,972 sq mi (36,188 sq km), including its outlying islands. Population (2004 est.): 22,640,000. Administrative centre: Taipei. Han Chinese constitute virtually the entire population. Languages: Mandarin Chinese (official); Taiwanese, Fukien, and Hakka dialects also spoken. Religions: Buddhism, Daoism, Confucianism, Christianity (small minority). Currency: new Taiwan dollar. Lying 100 mi (160 km) off the Chinese mainland, Taiwan is composed mainly of mountains and hills, with densely populated coastal plains in the west. It has one of the highest population densities in the world and is a leading industrial power of the Pacific Rim, with an economy based on manufacturing industries, international trade, and services. Leading exports include nonelectrical and electrical machinery, electronics, textile products, plastic articles, and transportation equipment. Taiwan is a major producer of Chinese-language motion pictures. It is a republic with one legislative branch; its chief of state is the president, and the head of government is the premier. Known to the Chinese as early as the 7th century, it was widely settled by them early in the 17th century. In 1646 the Dutch seized control of the island, only to be ousted in 1661 by a large influx of Chinese refugees, supporters of the Ming dynasty. It fell to the Manchu in 1683 and was not open to Europeans again until 1858. In 1895 it was ceded to Japan following the first Sino-Japanese War. A Japanese military centre in World War II, it was frequently bombed by U.S. planes. After Japan's defeat it was returned to China, which was then governed by the Nationalists. When the communists took over mainland China in 1949, the Nationalist Party government fled to Taiwan and made it their seat of government, with Gen. Chiang Kai-shek as president. Since then, both the Nationalist government and the People's Republic of China (mainland China) have considered Taiwan a province of China. In 1954 Chiang and the U.S. signed a mutual defense treaty, and Taiwan received U.S. support for almost three decades, developing its economy in spectacular fashion. It was recognized by the UN as the representative of China until 1971, when it was replaced there by the People's Republic. Martial law in Taiwan, in effect since 1949, was lifted in 1987, and travel restrictions with mainland China were removed in 1988. In 1989 opposition parties were legalized. The relationship with the mainland grew increasingly close in the 1990s, but it again became strained over the future status of Taiwan after Chen Shui-bian (Ch'en Shui-pian) was elected president in 2000.

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▪ 2009

Area:

36,190 sq km (13,973 sq mi)

Population

(2008 est.): 22,996,000

Capital:

Taipei

Chief of state:

Presidents Chen Shui-bian and, from May 20, Ma Ying-jeou

Head of government:

Presidents of the Executive Yuan (Premiers) Chang Chun-hsiung and, from May 20, Liu Chao-shiuan

      In January 2008 the Kuomintang (KMT), or Nationalist Party, and its allies won 86 seats in Taiwan's first legislative elections after a constitutional amendment reduced the number of seats from 225 to 113 and introduced single-seat districts. Adapting to the new electoral scheme, the KMT largely reabsorbed the New Party and the People First Party, both of which had split off from the KMT in the 1990s. In contrast, the Democratic Progressive Party (DPP) failed to integrate with its erstwhile ally, the Taiwan Solidarity Union (TSU). The TSU attempted to reposition itself as a centre-left party, abandoning its previous hard-line defense of Taiwanese independence. This, however, confused and alienated its base so thoroughly that the TSU failed to win a single seat. As a result, Taiwan's minor parties were effectively eliminated, and Taiwan was decisively pushed to a two-party political system.

      The results of the legislative elections foreshadowed the outcome of Taiwan's fourth direct presidential election, held on March 22. The KMT's Ma Ying-jeou easily defeated the DPP's Frank Hsieh by running on a platform that promised to fix Taiwan's stagnant economy by improving relations with China. Ma's reputation for personal integrity also contrasted sharply with that of the highly unpopular incumbent president, Chen Shui-bian, who had spent much of his last two years in office as a lame duck. Chen, who resigned the DPP chairmanship at the beginning of the year, quit the party in August after money-laundering allegations against him emerged. He was eventually detained and jailed in November on an array of charges, including money laundering, fraud, and embezzlement of public funds.

      After taking office, Ma moved quickly to mend relations with China. By June an agreement had been reached that allowed regular weekend charter flights across the Taiwan Strait. Increasing Chinese tourism in Taiwan in an effort to help kick-start the island's economy was one of Ma's major campaign promises. Further agreements on the expansion of direct flights and trade between Taiwan and China were signed in November.

      Fears mounted that Ma's rapid rapprochement with China was undermining Taiwanese sovereignty. Pro-independence groups launched major street demonstrations in late August and again in late October—the latter to protest the first visit to Taiwan by high-ranking Chinese envoy Chen Yunlin. Nevertheless, Ma moved to reverse efforts by his predecessor to build a distinct sense of Taiwanese identity. In August the new administration changed the official name of the national postal service from Taiwan Post back to its original name, Chunghwa (“Chinese”) Post. In addition, Chiang Kai-shek Memorial Hall in central Taipei was reopened, and the official system of romanization was switched from a system developed in Taiwan to Hanyu pinyin, the standard used in China. Opponents of these policies referred to them as part of the “re-sinification” of Taiwan. In early December, Ma rejected the idea of a third visit to Taiwan by the Dalai Lama, saying that the timing was inappropriate.

      Aside from improving relations with China, the new administration also declared a unilateral truce in the decades-long struggle between Taipei and Beijing over diplomatic recognition of Taiwan by other countries. In return for not seeking new diplomatic allies, Taipei hoped that Beijing would allow the island republic to maintain as allies the 19 countries that already recognized it. Moreover, Taipei abandoned its annual bid for admission to the UN after 15 successive failures and instead sought participation as an observer in UN special agencies. This attempt, however, was unsuccesful. In early October the U.S. announced $6.4 billion in arms sales to Taiwan. China strongly denounced the proposed sale as interference in Chinese internal affairs.

      The first months of the new administration were marked by rapidly rising consumer prices. By the end of October, Taiwan's consumer price index had risen 2.39%, easing slightly as international oil prices declined. At the same time, unemployment rose to 4.37%,    and adjusted real average earnings fell by 3.1%. Investors fared even worse. In October, as the financial crisis in the U.S. deepened and had a heavy impact on other economies, Taiwan's main stock index fell to less than 4,400 from the nearly 9,000 when Ma took office in May.

Michael R. Fahey

▪ 2008

Area:

36,188 sq km (13,972 sq mi)

Population

(2007 est.): 22,902,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

Presidents of the Executive Yuan (Premiers) Su Tseng-chang and, from May 21, Chang Chun-hsiung

      In 2007 Taiwan's politics became focused on the presidential elections scheduled for March 2008 as the Kuomintang (KMT), or Nationalist Party, and its allies, which controlled Taiwan's legislature, realized that Pres. Chen Shui-bian of the Democratic Progressive Party (DPP) would serve out his second and last term. The two parties were locked in an ideological struggle over the status of Taiwan that had paralyzed and polarized politics for seven years. While the DPP regarded Taiwan as an already independent country, the KMT leadership wanted to see Taiwan more closely integrated with China economically over the short term and ultimately united over the long term.

      The DPP's Frank Hsieh, who near the end of 2006 lost the mayoral election in Taipei by a less-than-expected margin, won his party's presidential nomination in May. Contrary to expectations that he would take a moderate line with respect to relations with China, Hsieh came out strongly in favour of a DPP-proposed referendum to join the UN under the name Taiwan. He also worked out a compromise resolution on Taiwan's future, known as the “resolution on making Taiwan a normal country.” Among other things, the resolution called for a new constitution and name for the country, although it did not specifically designate that name as Taiwan. While Hsieh supported amending Taiwan's constitution to change the country's official name from the Republic of China to Taiwan, this change would break an explicit promise made by President Chen to the U.S. not to do so.

      Hsieh's KMT opponent in the presidential race, Ma Ying-jeou, initially attempted to focus his campaign on the state of Taiwan's economy. Ma promised that if elected, he would restore the rapid economic growth of the 1980s and '90s by opening direct air and shipping links with China and by dropping a restriction on Taiwanese companies that capped their Chinese investments at 40% of their net assets. Ma's campaign received a major boost when the Taipei District Court acquitted him on charges of having misused public funds while serving as mayor of Taipei.

      Strong support for the DPP's UN referendum, however, led Ma to propose a parallel referendum whereby Taiwan would rejoin the UN under its official name of the Republic of China. This proposal angered China, which opposed all referenda in Taiwan because it feared that the ethnic Taiwanese majority might use a referendum to reject unification with China or to declare de jure Taiwanese independence. In 2007 less than 10% of the Taiwanese population supported unification with China.

 In December the DPP government amended the legal status of Chiang Kai-shek Memorial Hall, a vast downtown monument and park dedicated to the memory of the former dictator. After a series of sporadic protests, the inscription on the memorial arch bearing Chiang's name was replaced, and the entire complex was renamed the National Taiwan Democracy Memorial Hall. Ma Ying-jeou promised to restore the old name if elected.

      The DPP's proposed UN referendum increasingly strained relations with the U.S., which saw it as a step toward formal independence. The DPP's refusal to drop its proposal led senior U.S. diplomat Thomas Christensen to abandon the U.S.'s policy of strategic ambiguity on the status of Taiwan by saying that the U.S. does “not recognize Taiwan as an independent state.”

      Although Taiwanese investment in China reached $150 billion in 2007, formal relations with China remained icy. Negotiations to allow Chinese tourists to visit Taiwan in greater numbers failed to produce results, and after a disagreement over nomenclature, Taiwan refused to allow the Olympic torch to pass through on its way to Beijing for the 2008 Olympics.

      The year saw three acquisitions of Taiwanese banks by foreign banks. Citigroup acquired the Bank of Overseas Chinese; ABN AMRO took over the troubled Taitung Business Bank; and HSBC agreed to take over the troubled Chinese Bank. Taiwan's main stock exchange, the TAIEX, hit a series of seven-year highs during mid-2007, which—combined with export growth of 8.8%—had Taiwan's economy on track for overall growth of 4.58%. Unemployment, meanwhile, hovered at around 4%. The relatively high jobless rate, combined with sluggish growth in salaries and rising prices caused by higher international oil prices, contributed to widespread discontent about the state of the economy despite rosy economic indicators.

Michael R. Fahey

▪ 2007

Area:

36,188 sq km (13,972 sq mi)

Population

(2006 est.): 22,815,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

Presidents of the Executive Yuan (Premiers) Frank Hsieh and, from January 25, Su Tseng-chang

      Politics in Taiwan in 2006 centred on two areas: allegations of corruption against Pres. Chen Shui-bian and Taiwan's deteriorating relationship with the United States. Early in 2006 President Chen swore in a new cabinet, headed by Su Tseng-chang. Chen soon found himself mired in a scandal. Chen's son-in-law, Chao Chien-ming, was indicted on insider-trading charges in the summer; first lady Wu Shu-chen was charged with having misused a secret diplomatic fund under the president's control, as were three former aides; and Chen himself was accused of having used state funds slated for national affairs on personal expenditures and of having falsified receipts.

      In early 2006, 62% of the population expressed pessimism about the coming year, and 79% expressed a lack of confidence in the administration. The largest opposition party, the Kuomintang (KMT), or Nationalist Party, rallied tens of thousands of people to protest against corruption and the Chen administration. The KMT accused Chen of having risked Taiwanese lives for his own political prestige by provoking the mainland on independence issues. After the ruling Democratic Progressive Party (DPP) staged a rally in March to support Chen, former KMT chairman Lien Chan was joined by other KMT leaders in spearheading protests. Waves of demonstrations continued throughout the year, including a student hunger strike and a sit-in by more than 100 professors.

 As details about the scandal involving the first family emerged, DPP leaders demanded that President Chen apologize to the Taiwanese people. Chen's insistence that he was never wrong led to widespread criticism from both inside and outside the government. By midyear a coalition had emerged to oust Chen from power. To win back political and popular support, he abruptly announced delegation of most of his powers to Premier Su, and a rumour spread that the first lady was seeking a divorce to protect the president from her legal woes. President Chen survived an unprecedented parliamentary recall in June. In August the most serious effort to remove Chen from office was inaugurated by Shih Ming-te, a former colleague, who rallied more than a million participants in a series of marches. Another former DPP chairman, Hsu Hsin-liang, soon joined Shih's campaign. Of those surveyed, 64.6% believed that Chen should resign.

      In November Chen admitted to having submitted false receipts and to having lied to prosecutors about doing so, but he contended that secrecy in the matter was paramount for national security. In early December the KMT mayoral candidate won Taipei as predicted, but the DPP candidate earned a razor-thin victory in Kaohsiung, which underscored the deep political divide gripping the island.

      Taiwan's relationship with the U.S. was strained. In February Chen dismantled a government committee responsible for overseeing an eventual reunification with China. The U.S. insisted that Taiwan not change the status quo across the Taiwan Strait and aborted talks on sales of U.S. military aircraft to Taiwan. China also voiced concerns and warned of serious repercussions. A minor drama in cross-strait politics unfolded when Taiwan dismissed the Chinese offer of a gift of two pandas as a propaganda stunt and refused to take the animals.

      Following a 4% GDP growth rate in 2005, Taiwan's economy experienced ups and downs in 2006, but its trade with China continued to enjoy a surplus of tens of billions of dollars. Over 70% of Taiwan's offshore investments went to China, and a majority of the investments there were profitable. Taiwan also attracted sizable direct investment from the U.S., Japan, South Korea, and Sweden. In April the government attempted to halt a reform program initiated in 2004 by President Chen. The program was originally intended to reduce the number of financial institutions by half and increase the competitiveness of those that remained. Critics regarded the reform a failure. The government push for internationalization of the banking industries yielded some initial success. London-based Standard Chartered purchased Hsinchu International Bank of Taiwan for $1.2 billion, the largest foreign acquisition of a financial institution in Taiwan's history, and other overseas firms invested heavily in the Taiwanese banking sector. The appointment of Chen Ruilong as the new economic minister was seen as a step toward opening up investment to China. The banking industry continued to seek expansion into the mainland, but there were still significant roadblocks to the opening of branches there.

Xiaobo Hu

▪ 2006

Area:

36,188 sq km (13,972 sq mi)

Population

(2005 est.): 22,726,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

Presidents of the Executive Yuan (Premiers) Yu Shyi-kun and, from February 1, Frank Hsieh

      In Taiwan the major events of 2005 centred mostly on the island's relations with China. The year began with the government's announcement to permit Taiwanese banks to set up branches in China, a move that was preceded by Taiwanese insurance and securities companies' being allowed on the mainland. Negotiations were also under way for Chinese banks to be allowed to establish offices in Taiwan. An even more significant breakthrough came in the form of the first direct commercial flights between the island and mainland China in 55 years. The two sides had long talked about cross-straits flights, but political tension had hitherto delayed progress on the matter. A three-week-long experimental period was finally planned. From January 29 to February 20—a span that encompassed the Chinese Lunar New Year holidays—chartered flights exclusively for Taiwanese businesspeople and their families were operated between Taipei and Kaohsiung and the mainland cities of Beijing, Shanghai, and Guangzhou. In the wake of this experiment, which was generally enthusiastically received on the island, China encouraged Taiwan to consider more direct flights. This proposal was met by initial opposition from Taiwanese pro-independence leaders, who expressed fears that such flights could undermine the island's political and economic security. In late November, however, Taiwan's Mainland Affairs Council and China's Taiwan Affairs Office respectively announced that direct charter flights would also be operated during the 2006 Lunar New Year holidays. The mainland city of Xiamen was added to the schedule, and flights would be available to any Taiwanese who had valid travel documents.

      Another historical breakthrough in cross-straits relations occurred in April–July when the heads of three major Taiwanese opposition parties—the Nationalist Party (KMT), the People's First Party (PFP), and the New Party—made separate visits to Beijing for face-to-face talks with Chinese Pres. Hu Jintao. Each of the opposition leaders recognized Taiwan as part of China but did not necessarily regard reunification as a policy priority. While reshaping political communications across the Taiwan Strait, such direct talks between the Chinese leadership and nonseparatist elements within Taiwan put added pressure on the pro-independence government of Pres. Chen Shui-bian.

      An antisecession law passed by China in March aroused widespread protests in Taiwan. The law authorized the use of military force should Taiwan seek independence. In response, President Chen threatened to propose an antiannexation law and reannounced the bid to purchase a number of advanced weapons, including 3 PAC-3 missiles, 8 diesel-electric submarines, and 12 P-3C antisubmarine aircraft. The KMT and PFP succeeded in blocking Chen's military budget at year's end, however.

      The Taiwanese business community continued to invest money in mainland projects. According to the Ministry of Economic Affairs, more than $42 billion from Taiwan had been invested in some 33,000 projects in China since 1991. Investment in the mainland during 2004 totaled $7.2 billion—about 67% of the island's total investment abroad. The electronics industry alone invested $3 billion that year. In early 2005 Chi Mei Optoelectronics Corp., a major manufacturer of large-size TFT-LCD panels for televisions, notebook computers, and desktop monitors, won approval from Taiwanese authorities for its first investment ($1 million) in the mainland.

      Since democratization Taiwan had hardly gone a year without elections. To prevent the KMT and PFP from joining forces in the December 2005 elections of county chiefs and city mayors, the ruling Democratic Progressive Party (DPP) approached the PFP regarding possible cooperation. No deal was reached, however, and as the elections neared, the DPP's popularity declined to a low point of 36%. This prompted young leaders in the DPP to lambaste corruption in the party and call for reforms, which the DPP chairman, Su Tseng-chang, promised. The KMT witnessed its own share of infighting as the party chairman, Ma Ying-jeou, and the Legislative Yuan speaker, Wang Jin-pyng—two leaders expected to compete for the party's 2008 presidential nomination—vied for power. Within the DPP, Vice Pres. Annette Lu, Premier Frank Hsieh, and Su were among those who had begun positioning themselves for a possible run in 2008. The DPP's big loss in the December elections probably eliminated Su, who was forced to submit his resignation as party chairman. Out of 23 counties and cities, the DPP won only six election contests—a result that was sure to intensify intraparty power struggles in the coming years.

Xiaobo Hu

▪ 2005

Area:

36,188 sq km (13,972 sq mi)

Population

(2004 est.): 22,640,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

President of the Executive Yuan (Premier) Yu Shyi-kun

      The year 2004 was an eventful one in Taiwan. Pres. Chen Shui-bian was reelected, and his efforts and those of his Democratic Progressive Party (DPP) to move the island to independence from China aroused both internal and external resistance.

      The presidential race was very close. Two former presidential candidates, Lien Chan of the Nationalist Party (KMT) and James Soong of the People's First Party (PFP), joined forces against Chen. In the 2000 presidential election, Lien had won 23% of the popular vote, while Soong had captured 37% of the vote. Counting on the support that the two parties had four years earlier, the KMT-PFP alliance hoped to deliver a 2004 election victory to the pan-blue camp (so called because blue was the colour of the KMT). Of the more than 150,000 businesspeople who flew back to Taiwan to cast their ballots, between 80% and 90% were supporters of the KMT-PFP pan-blue alliance. Nonetheless, four years under President Chen had given the DPP advantages in mobilizing supporters, especially young ones, and capitalizing on ethnic issues, particularly the division between the mainlanders who had migrated to the island in the late 1940s and those whose families had migrated generations earlier. By election day the island was seriously torn apart, primarily on issues of independence.

      While campaigning the day before the March 20 election in the strongly pro-DPP area of Tainan, both Chen and Vice Pres. Annette Lu were shot and slightly wounded, which added much emotion and terror to the already heavily divided population, as well as skepticism in the minds of at least half of the population. All military personnel, more of them pan-blue supporters than not, were called back into position, although the national-security-alert level remained unchanged. Amid protests by pan-blue candidates and supporters, incumbent candidates Chen and Lu declared a narrow victory with 6,471,970 votes, 29,518 more votes (or 0.2%) than the pan-blue candidates (337,297 ballots had been invalidated). Voter turnout was 80.28%. Lien immediately filed a legal challenge and demanded a recount. In addition, he requested that the government set up an investigation commission to look into the suspicious assassination attempt on Chen in Tainan.

      An independent group of foreign experts commissioned by the government discounted the possibility of a political assassination but claimed that further investigation would be difficult because the crime scene had not been protected. Dissatisfied with the ambiguity of the official report, the opposition parties hired their own international experts, who concluded that the wounds were possibly surgical but not from gunshots. An official investigation commission was not established until early October, yet the DPP still boycotted it.

      Voters also decided on two referenda that would have authorized the government to build up the military to counter Beijing's forces and to negotiate with Beijing on the status of the island. Since only 45% of voters cast ballots, a level short of the 50% legal requirement, the referenda were rendered ineffective. This was the first time Taiwan had used a referendum for policy making.

      Weapons imports remained a political as well as an economic issue after the election. The government was seeking legislative approval for a controversial $19 billion special-defense budget to purchase six American-made Pac-3 antimissile systems, eight conventional submarines, and a fleet of submarine-hunting P-3C aircraft. Division fell along partisan lines, with DPP demonstrations calling for “ military purchase to protect Taiwan” and KMT-PFP hunger strikers rallying for “saving Taiwan from military spending.” By year's end the military budget bill had been voted down 10 times.

      In other pro-independence moves, the Taiwanese government began adding the word Taiwan to ROC (Republic of China) in its diplomatic documents in order to separate it from the ROC that used to rule the territory including the mainland, and Chen maintained that China should not be included in the national history or geography taught in Taiwan. Beijing protested against Chen's maneuvers vehemently, while the United States maintained that it did not recognize Taiwan as an independent country. Nonetheless, in 2003 many Taiwanese businesses had moved their operations to the mainland, where they made a record $129.5 billion in new investment contracts; investment in Hong Kong increased 283% that year. In the December 2004 parliamentary elections, Chen's government and the independence movement received an unexpected setback when the DPP and its allies failed to win a majority. Several days later Chen announced that he would be stepping down as DPP chairman.

Xiaobo Hu

▪ 2004

Area:

36,188 sq km (13,972 sq mi)

Population

(2003 est.): 22,569,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

President of the Executive Yuan (Premier) Yu Shyi-kun

      Throughout 2003, as the political frenzy in Taiwan mounted in the run-up to the March 2004 elections, political forces appeared to be polarizing between independence for the island and unification with China, although scholarly studies suggested there was little change in voter alignment. Two former presidential candidates now in opposition parties, Lien Chan of the Nationalist Party (KMT) and James Soong of the People's First Party (PFP), joined forces for the 2004 presidential election, with Lien in the top slot and Soong as his vice presidential running mate. The KMT-PFP alliance gave the nationalist pan-blue (so-called because blue is the colour of the KMT) parties some hope of winning the election. Soong, a former KMT member, had run as an independent candidate three years earlier, which split the pan-blue vote and likely cost the KMT the presidency.

      Chen prepared for his reelection bid by making radical moves in the direction of independence. He reiterated his pro-independence catchphrase of “one country on each side” of the Taiwan Strait. The minister of education proposed controversial changes in high-school textbooks, including moving the discussion of China's post-1911 period to the section on world history. A new design for the passport added the word Taiwan to its cover.

      Newspapers, meanwhile, were filled with political scandals, including news of two high-profile investigations. First, the KMT accused Pres. Chen Shui-bian of having accrued $1.7 billion within the past year, but Chen's Democratic Progressive Party (DPP) and the government countered that his assets were $56,000 less in 2002 than in the year before. In a second case, former president Lee Teng-hui's financial director, Liu Tai-ying, was rearrested three days after he was released on bail, accused of having taken bribes of nearly $10 million.

      The legislature passed a historic proposal that would give the president the power to hold a national “defensive referendum” on independence should China try to force reunification with the mainland. The 108–82 vote was a major show of defiance to Beijing insofar as China had warned Taiwan that such moves could lead to a devastating war across the Taiwan Strait. At the same time, however, the legislators carefully rejected different radical versions, including one by the ruling party, that would place no restrictions on holding referenda on such issues as independence and sovereignty that worried China most. Rather, the legislature retained the power to screen potential referendum issues that might involve changes to the constitution. The version passed was written by KMT members who held a majority in the legislature and opposed changes to the status quo across the Taiwan Strait. According to the law, only the public and the legislature were given the power to initiate a vote—except for a referendum defending the nation in case of war, the so-called “defensive referendum.” President Chen had long said that he would not hold a referendum on sovereignty issues as long as China did not attack Taiwan. Only three days after the referendum law was passed, however, he proposed to hold the “defensive referendum” on the next presidential election day, demanding that China remove its missiles from its coastlines. Such a move exacerbated the already strained relationship between the island and the mainland as well as that between Taiwan and the U.S., which preferred the status quo.

      The completion of President Chen's first term in office was occasion for a public review of his performance. It was reported that during his three years in office the government had accumulated debts of about $100 billion, the equivalent of $16,000 per family, a year's wages of a salaried worker in Taiwan. By mid-2003 the government had already issued about $8 billion in government bonds in an effort to raise funds for its operations. Economists were predicting that Taiwan might face four major fiscal problems: a growing imbalance in government revenue and expenditure; a high budget deficit, which was estimated to reach 34% of GDP by 2006; use of more government bonds to cover the deficit; and continued tax reductions, which added salt to the fiscal wounds. Partly as a result of the economic stagnation at home, Taiwanese investment continued to flow into China's market—which further aggravated the pro-independence alliance. SinoPac Holdings became the first Taiwanese financial institution to offer local currency financing in China, the boldest move so far by a Taiwanese bank to flout the official ban and enter the Chinese market.

Xiaobo Hu

▪ 2003

Area:

36,188 sq km (13,972 sq mi)

Population

(2002 est.): 22,457,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

Presidents of the Executive Yuan (Premiers) Chang Chun-hsiung and, from February 1, Yu Shyi-kun

      In Taiwan the year 2002 began with a major cabinet reshuffle that was widely perceived to be part of an effort by Pres. Chen Shui-bian to lay the groundwork for reelection in 2004. More than half of the cabinet ministers were replaced. Yu Shyi-kun, secretary-general to the president, was named the new premier. Minister of Economic Affairs Lin Hsin-i was promoted to vice-premier. Experienced business managers were handed the finance and economics portfolios. Chen appeared in complete control of the changes, and his protégés dominated the new cabinet. Many of those who had served in the Taipei municipal government when Chen was mayor of the capital received promotions, while those who could not see eye to eye with the president were removed from leadership positions.

      In an effort to maintain its independence from China and to consolidate American support, Chen's administration dispatched a number of high-ranking officials to the U.S. during the year. They included the premier, the vice minister of defense, the chairwoman of the Mainland Affairs Council, and first lady Wu Shu-chen. Taiwan also made plans to purchase four state-of-the-art Aegis-class destroyers from the U.S., which was expected to formally announce the sale in 2003. The proposed arms sale was estimated at $5.7 billion.

      Early in 2002 China extended an invitation to members of Taiwan's governing Democratic Progressive Party (DPP) to visit the mainland, apparently signaling a more conciliatory approach toward the disputed island. In the past, Chinese leaders had made general invitations to party officials from Taiwan, but this was the first offer expressly issued to the officially pro-independence DPP.

      Chinese Vice-Premier Qian Qichen made another diplomatic overture later in the year when he called for negotiations with Taiwan on establishing direct cross-strait transportation operations. Although a survey conducted by the Mainland Affairs Council found that more than 72% of Taiwanese supported such operations—provided that Taiwanese authority and national security were assured—comments by Chen clearly indicated his reluctance to develop closer economic ties with China. The president further rankled the Chinese leadership by expressing at different times his view regarding the status of Taiwan. In a May interview with Newsweek magazine, Chen called Taiwan “already an independent state.” In early August Chen's speech about “one country on each side [of the Taiwan Strait]” drew immediate criticism from the opposition parties in Taiwan and the governments of China, the U.S., and Japan, among others.

      Taiwan's economy grew only 0.9% in the first months of 2002, which was even lower than experts had forecast. Statistics showed continual weak domestic demand. In August Taiwan's imports and exports increased by 18.8% and 15.5%, respectively, compared with the same period the previous year. Total exports from January to August had increased by just 2.7%, however—a sign of weak recovery from the economic downtown that hit Taiwan in 2001. Real economic recovery was not in sight by the end of the year.

      The Ministry of Finance planned to speed up its pace in resolving nonperforming loan problems, although many experts had questioned whether tax money should be used to help failing financial institutions. According to official figures, the total amount of nonperforming loans stood at $40.3 billion, though private-sector commentators estimated an amount close to $86.3 billion.

      In November President Chen announced a five-year plan to address economic woes, vowing to bring the jobless rate down by one percentage point to 4.5% in 2003. Four days after the announcement, some 120,000 demonstrators took to the streets of Taipei to protest the proposed financial reforms, which included abolishing agricultural cooperatives that provided funding to poor farmers and fishermen. In the wake of the protests, Premier Yu and his finance minister submitted their resignations, though Yu later announced that he would stay in office.

Xiaobo Hu

▪ 2002

Area:

36,188 sq km (13,972 sq mi)

Population

(2001 est.): 22,340,000

Capital:

Taipei

Chief of state:

President Chen Shui-bian

Head of government:

President of the Executive Yuan (Premier) Chang Chun-hsiung

      Ripples from the global economic slowdown in 2001 produced a severe negative impact on Taiwan's economy and overshadowed the ongoing political turmoil that resulted from a divided government. The perennial threat from China evoked a variety of responses from within Taiwan, while the new U.S. administration of Pres. George W. Bush proved more sympathetic to Taiwan's security needs than the Bill Clinton administration had been in the preceding eight years.

      Shrinking demand in the U.S. and Japan for Taiwan's high-tech exports, particularly computer chips, and the exodus of thousands of manufacturing plants to China, where labour costs were significantly lower, crippled the economy. Growth slowed from a robust 6.3% in 2000 to just over 1% in the first quarter of 2001, and the economy actually contracted by 2.35% in the second quarter compared with the previous year as the island entered recession for the first time since 1975. At midyear the unemployment rate, which had hovered around 2% for many years, shot up to 4.22%, the highest figure on record. Diminished bank credit added to the economic gloom. One of the few bright spots was that Taiwan's long-standing application to join the World Trade Organization was finally approved in mid-September, the day after China's bid to join the WTO was sealed.

      The election in March 2000 of Democratic Progressive Party (DPP) presidential candidate Chen Shui-bian ended the Kuomintang's (KMT) half-century monopoly of that office, but the KMT retained its majority in the Legislative Yuan pending the outcome of parliamentary elections scheduled for December 1. The inexperience of the new DPP administration combined with the determination of the KMT to make things difficult for its political nemesis made this unprecedented experiment in divided government a series of partisan political skirmishes. Former president Lee Teng-hui, who had resigned as head of the KMT after his handpicked candidate, Lien Chan, was crushed in the March 2000 election, threw his support to a new political party, the Taiwan Solidarity Union (TSU), which favoured the maintenance of Taiwan's de facto independence from China.

      Meanwhile, the KMT endorsed the novel concept of confederation with China as a way out of the half-century impasse between the People's Republic and the Republic of China. In September the KMT expelled elder statesman Lee from its ranks, severing its ties with the man who had been the party's most important leader for the past dozen years. In the December 1 parliamentary elections, the KMT suffered a crushing defeat, dropping from 110 to 68 seats while its share of the vote plummeted from 46% to 31%. The DPP increased its seats from 66 to 87, and its vote share from 30% to 37%, making it the largest party in the 225-seat Legislative Yuan. The fledgling People's First Party led by James Soong picked up 46 seats, and the TSU 13. Overall, these results gave the DPP and President Chen an unprecedented opportunity to create a reform-minded coalition with a small but workable majority.

      The contretemps over the construction of Taiwan's fourth nuclear power plant spilled over into 2001. In January the KMT-dominated Legislative Yuan voted to override Chen's decision to halt construction of the plant, in fulfillment of a campaign promise, and the courts ruled that Chen had acted improperly. Over the objections of his DPP and environmentalist supporters who opposed nuclear power on principle, Chen bowed to opposition pressure and authorized resumption of construction on the contested power plant.

      Taiwan's sole major power patron, the U.S., showed a more sympathetic face to the island under the new Republican Bush administration. In April Bush said he would do whatever it took to defend Taiwan. That same month, in response to Taiwan's annual request for defensive weaponry, Washington announced that it would provide Taiwan with four Kidd-class destroyers, 12 P-3C Orion surveillance aircraft, eight diesel submarines, minesweeping helicopters, surface- and submarine-launched torpedoes, and Avenger surface-to-air missiles, while it withheld approval of the advanced Aegis antimissile defense system that was Taiwan's most coveted item. The transfers were designed to bolster Taiwan's navy in the face of a steadily growing military imbalance across the Taiwan Strait. China, as usual, objected vociferously to U.S. support for Taiwan, since it hoped to intimidate the island into surrendering its de facto sovereignty. Washington also eased restrictions on Taiwan leaders visiting the U.S., another thing that China deemed objectionable. In May, en route to a tour of Latin American allies of Taiwan, President Chen stopped over in New York City and Houston, Texas, where he met with municipal officials and sympathetic congresspeople.

Steven I. Levine

▪ 2001

Area:

36,185 sq km (13,971 sq mi)

Population

(2000 est.): 22,186,000

Capital:

Taipei

Chief of state:

Presidents Lee Teng-hui and, from May 20, Chen Shui-bian

Head of government:

Presidents of the Executive Yuan (Premiers) Vincent Siew, Tang Fei from May 20, and, from October 6, Chang Chun-hsiung

      Domestic politics and cross-strait relations dominated the news from Taiwan in 2000. In March the island republic's second direct presidential election produced a stunning victory for the main opposition candidate, Democratic Progressive Party (DPP) nominee Chen Shui-bian. (See Biographies (Chen Shui-bian ).) In a hotly contested three-way race, the 49-year-old former dissident won 39% of the vote, enough to narrowly defeat independent candidate James Soong, who received 37%. The ruling Kuomintang (KMT) candidate, Lien Chan, finished a distant third. Although the KMT retained control of the legislature, Chen's presidential victory terminated 50 years of uninterrupted KMT rule. Lee Teng-hui, who had crushed his DPP opponent, Peng Ming-min, in the 1996 presidential election, was unable to transfer his popularity to his would-be political heir, Lien, and was forced to resign his party leadership position. The shock of defeat prompted the KMT to initiate a thorough self-scrutiny as the party entered into opposition for the first time in its history. After his narrow electoral loss, Soong, a longtime KMT stalwart who ran as an independent only after having been denied his party's nomination, established the People First Party as a new vehicle to promote his political fortunes. As a result of Chen's victory, Taiwanese politics entered a period of flux.

      The tumultuous election campaign was punctuated by harsh rhetoric from China, which threatened dire consequences if Taiwanese voters elected Chen. Chinese leaders viewed him as a dangerous advocate of Taiwanese independence. During Taiwan's first direct presidential election in 1996, China had test fired missiles off the coast of Taiwan in a crude warning to Taiwanese voters not to support pro-independence candidates. This time Beijing restricted itself to verbal warnings. Before and after his election victory, Chen downplayed his support for independence in an attempt to assuage Beijing. He said there was no need for Taiwan to declare formal independence, since it was already a de facto independent state. Spurning Chen's olive branch, Chinese leaders demanded that he explicitly endorse their narrow version of the one-China principle—something the new president refused to do. Meanwhile, the Chinese media, which avoided even mentioning Chen by name after his victory, heaped abuse on his outspoken vice president, Annette Lu, a leading feminist. Cross-strait relations remained frozen despite the new Taiwanese government's attempt to reengage Beijing in dialogue on practical issues such as trade.

      In a further effort to placate Beijing and garner support for his minority government, Chen appointed retired air force general Tang Fei his premier. Tang had served the previous KMT government as minister of defense and supported Taiwan's eventual reunification with mainland China. Most of Chen's cabinet ministers, however, were members of the DPP and lacked prior experience in national-level administration. Chen's attempt at domestic political bridge building suffered a serious setback in early October when Tang, pleading ill health and exhaustion, resigned after just four months in office. His resignation was probably catalyzed by disagreement within the government over whether to complete construction of Taiwan's controversial fourth nuclear power plant, which Tang and the KMT supported but which the DPP and environmental activists opposed. Tang was replaced as premier by DPP veteran Chang Chun-hsiung. With few formal friends in the international arena, Taiwan remained dependent upon the U.S. to bolster its security. If Taiwan's international position was tenuous, domestically the peaceful transition of power from the KMT to the DPP represented a large step forward in the island's democratic consolidation.

      Fueled by a nearly 25% surge in exports, Taiwan's economy grew at an estimated 6.5%. Unemployment was low at 3%, inflation virtually nil, and foreign currency reserves strong at $113 billion. Reacting skittishly to the election results, however, the stock market declined by 40%. Weakness in the country's vital electronics industry also clouded the economic horizon.

Steven I. Levine

▪ 2000

Area:

36,179 sq km (13,969 sq mi)

Population

(1999 est.): 22,024,000

Capital:

Taipei

Chief of state:

President Lee Teng-hui

Head of government:

President of the Executive Yuan (Premier) Vincent Siew

      Nature dealt a cruel blow to Taiwan on Sept. 21, 1999, in the form of a massive earthquake, the worst to hit the temblor-prone island since 1935. The epicentre was in Nantou province in north-central Taiwan. Registering magnitude 7.6, the quake killed more than 2,300 people, injured some 10,000, destroyed thousands of homes and other structures, and left an estimated 100,000 homeless. An international relief effort was mounted to help Taiwan's authorities cope with the disaster.

      Just two months earlier, Pres. Lee Teng-hui had triggered a political earthquake of his own with a pronouncement on Taiwan's cross-straits relations with China. In a July 9 interview, Lee declared that contacts between China and Taiwan—which Beijing viewed as a Chinese province—should henceforth be on the basis of “special state-to-state relations.” With this formulation Taiwan sidled a step closer toward asserting the de facto independence that it had enjoyed for 50 years. Predictably infuriated, Chinese leaders excoriated Lee and renewed threats of military action against the island. Taiwan public opinion, however, strongly supported Lee. The U.S. reacted by reassuring Beijing of its adherence to the one-China principle and sent a special envoy to Taipei to bid Lee to hold his tongue. Washington also reaffirmed its commitment to Taiwan's security under the terms of the 1979 Taiwan Relations Act and warned Beijing against military action.

      The forthcoming presidential election in March 2000 dominated Taiwan politics for most of the year. By his statement on cross-straits relations, Lee, who planned to retire at the end of his term, was probably trying to boost the sagging electoral fortunes of the ruling Kuomintang's (KMT's) presidential candidate, incumbent Vice Pres. Lien Chan, and his running mate, Premier Vincent Siew. The Lien-Siew ticket faced stiff challenges from the popular James Soong, a longtime KMT stalwart who was running as an independent, and Democratic Progressive Party candidate Chen Shui-bian, former mayor of Taipei.

      The retirement of Lee, who had dominated Taiwan politics since taking over from Chiang Ching-kuo in 1988, would mark the end of an era during which Taiwan had completed its transformation into a full-fledged democracy. In January, following the December 1998 legislative elections, Lee reshuffled his Cabinet. Among the new appointees were Gen. Tang Fei as minister of defense, Su Chi as chairman of the Mainland Affairs Committee, and Yeh Chin-fong as minister of justice, the first woman to serve in that post. On March 2 Premier Siew easily weathered the first no-confidence vote under the revised constitution of 1997.

      Taiwan scored a rare diplomatic victory when it established diplomatic relations with the small Balkan nation of Macedonia in January, but its efforts to break out of the diplomatic isolation imposed by Beijing were generally unsuccessful. To Beijing's irritation, the U.S. Congress considered the Taiwan Security Enhancement Act, designed to strengthen Washington's military commitment to Taipei, and experts debated whether to include Taiwan in a proposed antiballistic missile defense scheme. Meanwhile, Taiwan stepped up its own defense preparations to calm public fears of Chinese military adventurism, initiating efforts to build its own missile defense system against low-altitude cruise missiles.

      A very respectable growth rate of 5.5% was projected for Taiwan's economy in 1999. Consumer prices held steady; the trade balance increased by 10% to some $10 billion; and the stock market was up by 20%. Taiwan's foreign exchange reserves stood at just under $102 billion at the end of September. Although the September 21 earthquake caused billions of dollars in direct and indirect damage to Taiwan's economy, it had little or no effect on the island's foreign trade, including its flagship computer-chip industry.

Steven I. Levine

▪ 1999

      Area: 36,179 sq km (13,969 sq mi)

      Population (1998 est.): 21,843,000

      Capital: Taipei

      Chief of state: President Lee Teng-hui

      Head of government: President of the Executive Yuan (Premier) Vincent Siew

      The Kuomintang (KMT), the ruling party of the Republic of China (ROC) on Taiwan, increased its previous razor-thin majority in the legislature to 123 of 225 seats in elections on Dec. 5, 1998. The KMT's charismatic candidate for mayor, Ma Ying-jeou, upset incumbent Chen Shui-bian, a leading figure in the main opposition Democratic Progressive Party (DPP), which had championed the cause of an independent Taiwan. Ma's victory also dealt a serious blow to Chen's presidential aspirations. Although the DPP won the mayoralty in Kaohsiung, Taiwan's second largest city, it garnered only 70 seats in the legislature, a disappointing performance that raised doubts about the leadership of DPP Chairman Lin Yi-hsiung, who had assumed that post in June. The New Party, which favoured Taiwan's reintegration with mainland China, won 11 seats, and the remaining 21 were split among smaller parties and independent candidates.

      The surprising KMT victory strengthened the hand of Premier Vincent Siew as well as that of Pres. Lee Teng-hui, whose term was to expire in 2000. More important, it eased fears of a truculent reaction from China that might have been expected in the event of a DPP victory. Although China disliked President Lee, whom it often accused of being a covert supporter of independence for Taiwan, Chinese leaders were even less enamoured of the DPP. The DPP's position, hammered out earlier in the year, was that "Taiwan enjoys independent sovereignty and that Taiwan's sovereignty must not be treated as a subject for negotiations," according to DPP Secretary-General Chiou I-jen. This was totally at variance with Beijing's position that Taiwan was a province of China that had to be reunited with the motherland.

      After three years of first acting out and then sulking over President Lee's 1995 visit to the United States, China agreed to resume the cross-straits dialogue with Taiwan that it had unilaterally suspended. In mid-October Koo Chen-fu, chairman of Taiwan's quasi-official Straits Exchange Foundation, met in Beijing with his counterpart, Wang Daohan, chairman of China's Association for Relations Across the Taiwan Straits. Although the dialogue was resumed, Taiwan made it clear that discussion of core political issues would not be on the agenda anytime soon.

      China continued to squeeze Taiwan diplomatically in the international arena, enticing four of Taiwan's erstwhile diplomatic partners to switch their diplomatic recognition from Taiwan to China. Of these, South Africa was by far the most important, the others being the Central African Republic, Guinea-Bissau, and Tonga. Taiwan picked up one new partner when it established relations with the Marshall Islands, a small nation in the Pacific Ocean. Throughout the year Taiwan continued to resist China's efforts to isolate it. In March Vice Pres. Lien Chan paid visits to Jordan, the United Arab Emirates, Bahrain, and Malaysia. U.S. Secretary of Energy Bill Richardson attended a U.S.-Taiwan business conference in November, becoming only the third U.S. Cabinet-level official to have visited Taiwan since formal diplomatic relations were broken 20 years ago.

      On the domestic front, the legislature finally passed a controversial measure to downsize the Taiwan provincial government, a measure that Taiwan provincial governor James Soong had bitterly opposed. In July Cheng Chung-mo, a grand justice of Taiwan's highest court, replaced Liao Cheng-hao as minister of justice following an embarrassing internal feud in the ministry that forced Liao to resign.

      The KMT's good fortunes in the December legislative elections were grounded in the satisfactory performance of Taiwan's economy, an island of prosperity and stability in an Asia-Pacific region battered by the Asian economic crisis. Taiwan's economy grew at an annual rate of 5.2%. The value of its currency, which had declined in 1997, stabilized in 1998, and international reserves dipped only slightly. Consumer prices rose a modest 2.6%, although the stock market declined 13% during the year. The modest decline in Taiwan's economy affected female workers more than men, and the rate of women's participation in the economy dropped slightly. Compared with its counterparts in Thailand, Indonesia, and South Korea, however, Taiwan's female labour force was still doing well.

STEVEN I. LEVINE

▪ 1998

      Area: 36,179 sq km (13,969 sq mi)

      Population (1997 est.): 21,616,000

      Capital: Taipei

      Chief of state: President Lee Teng-hui

      Head of government: Presidents of the Executive Yuan (Premiers) Lien Chan until August 21 and, from September 1, Vincent Siew

      At Taiwan's National Development Conference in December 1996, the ruling Kuomintang (KMT, or Nationalist Party) and the opposition Democratic Progressive Party (DPP) agreed on several proposals to revamp the political system. The most important of these gave the president authority to nominate the premier without the consent of the legislature. In return, the legislature was given the power to force the resignation of the Cabinet through a no-confidence vote passed by a simple majority and to impeach and remove the president and vice president by a two-thirds vote on charges of sedition or treason. Another change agreed upon was a drastic reduction in the power and scope of the Taiwan Provincial Government, which was responsible for handling general administrative affairs. In protest against this change, the Taiwan provincial governor, James Soong Chu-yu, a KMT stalwart, submitted his resignation to Pres. Lee Teng-hui, who, however, refused to accept it.

      A widespread perception that social order was deteriorating in Taiwan was reinforced in 1997 by the kidnapping and brutal murder of Pai Hsiao-yen, the teenage daughter of popular television entertainer Pai Ping-ping. The slaying, the third in a series of high-profile killings on the island, triggered mass demonstrations in Taipei in May. Protesters criticized the government for not doing enough to enforce law and order and demanded the resignation of the Cabinet. President Lee tried unsuccessfully to mollify public opinion by engineering a limited Cabinet shakeup. Premier Lien Chan announced that he would step down once the National Assembly had adopted the constitutional changes that the KMT and DPP had agreed upon at the National Development Conference. Meeting in extended session, the National Assembly accomplished this task by midsummer, and Lien kept his promise to resign. In his place President Lee appointed KMT legislator Vincent Siew, who had previously held a series of top diplomatic and economic management posts. Siew promised to focus on improving social order, raising the quality of life, undertaking a program of spiritual revitalization, and pursuing economic development while enhancing national security and improving ties with China.

      Throughout the year President Lee reaffirmed Taiwan's commitment to playing a larger role in world affairs. In March the Dalai Lama paid his first visit to Taiwan. This was followed by a visit in April from U.S. Speaker of the House Newt Gingrich, who departed from official U.S. policy by unequivocally pledging support to Taiwan if China threatened Taiwan's security by military force. Taiwan unveiled its first fleet of 70 domestically built fighter planes named after the late Pres. Chiang Ching-kuo and in April began accepting delivery of 150 U.S.-built F-16s. The U.S. also agreed to sell Taiwan Super Cobra attack helicopters to bolster its defense capabilities.

      The greatest cause of uneasiness for Taiwan remained its troubled relationship with China. In late June, one week before China reestablished its sovereignty over Hong Kong (see Spotlight: Hong Kong's Return to China), Taiwan conducted live-fire military exercises, which international observers interpreted as a signal to China that Taiwan would resist any attempts at reunification. On June 28 an estimated 70,000 people attended a "Say No to China" antireunification rally in Taipei. The government later urged China to protect freedom in Hong Kong but made it clear that Taiwan would not be absorbed in a similar manner. Taiwan had repeatedly rejected Beijing's view that Hong Kong's return to Chinese control under a "one country, two systems" pledge of local autonomy was a model for Taiwan's own eventual return to China. In the November municipal elections, the "shocking" victories of the DPP, which favoured independence for Taiwan, emphasized the problem.

      On September 7-10 President Lee led a Taiwanese delegation to the Universal Congress of the Panama Canal, which was intended as a forum for international leaders to discuss the future of the canal once it reverted to Panamanian control after Dec. 31, 1999. In terms of tonnage shipped through the canal, both Taiwan and China were among the top 10 users of the waterway. Taiwan's support of the conference, however, caused China to lead a boycott by a number of heads of state who had planned to attend.

      In 1997 Taiwan's economy expanded at a rate in excess of 6%. Inflation remained under control, and exports increased.

STEVEN I. LEVINE

▪ 1997

      Taiwan, which consists of the island of Taiwan and surrounding islands off the coast of China, is the seat of the Republic of China (Nationalist China). Area: 36,179 sq km (13,969 sq mi), including the island of Taiwan and its 86 outlying islands, 22 in the Taiwan group and 64 in the Pescadores group. Pop. (1996 est.): 21,463,000. (Area and population figures include the Quemoy and Matsu groups, which are administered as an occupied part of Fujian [Fukien] province.) Cap.: Taipei. Monetary unit: New Taiwan dollar, with (Oct. 11, 1996) a free rate of NT$27.48 to U.S. $1 (NT$43.29 = £1 sterling). President in 1996, Lee Teng-hui; president of the Executive Yuan (premier), Lien Chan.

      Taiwan completed its remarkable 10-year march toward democracy in 1996 with its first-ever direct presidential election. It was the first time in the history of China that ordinary citizens had had an opportunity to select their leader in a democratic election. Incumbent Pres. Lee Teng-hui, the Kuomintang (KMT, or Nationalist Party) candidate, easily won a second term in March by capturing 54% of the vote. He defeated Democratic Progressive Party (DPP) candidate Peng Ming-min, who garnered about 21% of the vote, and independent candidates Lin Yang-kang and Chen Li-an. An interview with President Lee is on pp. 7-9.

      Lee's triumph was unwittingly aided by China's campaign of psychological warfare. Beijing threatened to use military force against Taiwan and test-fired live missiles into Taiwan's northern and southern coastal waters to drive home its point that under no circumstances would it allow the Republic of China on Taiwan, which it considered a renegade province, to declare formal independence. By standing firm against those threats, Lee enhanced his image. In the wake of its disappointing showing in the election, the DPP split apart as Peng Ming-min left the fold to establish a Taiwan Independence Party. After the election a public opinion poll showed that 40% of the respondents favoured independence for Taiwan, while 33% favoured eventual reunification with mainland China.

      Following the election Lee announced that newly elected Vice Pres. Lien Chan would remain premier. John Chang became the new foreign minister and Wu Jing minister of education. Minister of Justice Ma Ying-jeou, whose anticorruption campaigns had embarrassed many KMT officials, was replaced. Lee still faced tough sledding in the Legislative Yuan, where the KMT retained a razor-thin majority. Both the DPP and the New Party vigorously criticized Lee and the KMT over domestic and foreign policy issues. The brutal murder of Liu Pang-you, a provincial official, and seven others in November brought unwelcome attention on alleged ties between Taiwanese gangsters and President Lee's KMT.

      Lee was moderately conciliatory toward China in his inauguration speech but reiterated his determination to expand Taiwan's international presence via vigorous diplomatic activity. Lien Chan traveled to the Dominican Republic as well as to Ukraine, where he met privately with Pres. Leonid Kuchma. For a fourth straight year, Beijing prevented the UN from considering Taiwan's application to rejoin the organization. Meanwhile, business executives in Taiwan, with investments in mainland China estimated at $25 billion, conducted a dialogue with Chinese leaders.

      In August Lee called on Taiwan enterprises to limit their investments in the mainland to no more than 20-30% of their overall foreign investment and reserve 20% of such capital for Taiwan. In 1996 more than one-sixth of Taiwan's exports went to China, and more than 30,000 Taiwan companies invested there.

      Taiwan's economy slumped in 1996 as exports of electronics flattened. A gross domestic product growth rate of below 6% was projected, and unemployment rose to a 10-year high of 3.2% in August. In an effort to stimulate the economy, Taiwan's central bank raised limits on foreign investment in companies listed on the Taipei stock market.

      Taiwan tested an advanced air-to-air missile for its locally produced jet fighters and ordered $420 million worth of U.S. Stinger missiles, guided missile launchers, and military vehicles. (STEVEN I. LEVINE)

▪ 1996

      Taiwan, which consists of the island of Taiwan and surrounding islands off the coast of China, is the seat of the Republic of China (Nationalist China). Area: 36,179 sq km (13,969 sq mi), including the island of Taiwan and its 86 outlying islands, 22 in the Taiwan group and 64 in the Pescadores group. Pop. (1995 est.): 21,268,000. (Area and population figures include the Quemoy and Matsu groups, which are administered as an occupied part of Fujian [Fukien] province.) Cap.: Taipei. Monetary unit: New Taiwan dollar, with (Oct. 6, 1995) a free rate of NT$26.90 to U.S. $1 (NT$42.52 = £1 sterling). President in 1995, Lee Teng-hui; president of the Executive Yuan (premier), Lien Chan.

      During Taiwan's past decade of democratic development, its once frigid relationship with the People's Republic of China improved significantly even though tension persisted. By 1995 thousands of businesses on Taiwan had invested an estimated $22 billion in mainland enterprises, making Taiwan the second largest investor, after Hong Kong.

      In 1995 China also cast a long shadow on the future of Taiwan itself. Enraged by Lee Teng-hui's unofficial June visit to the U.S. to attend an alumni reunion at Cornell University, Ithaca, N.Y., Beijing denounced Washington for permitting the visit and threatened military action against Taiwan. It charged that Lee, the president of the Republic of China on Taiwan, was covertly guiding the island toward independence. In July and August, attempting to frighten Lee's supporters, China conducted a series of long-range-missile tests in waters 140 km (90 mi) north of Taiwan and suspended the cross-strait talks. This sabre rattling caused Taiwan's stock market to plunge, but Lee's political stock was hardly affected. Taiwan raised its defense budget by 20% to acquire more advanced defensive aircraft and missiles and paraded its own military might in October.

      Public attention, in any case, had already shifted to the December elections for the Legislative Yuan. As in past years, the dominant issues were domestic and local, including alleged government mismanagement of state-funded development projects, official corruption, and government favouritism toward big business. The elections marked a further decline in the fortunes of the ruling Kuomintang (KMT), marginal gains by the chief opposition Democratic Progressive Party (DPP), and a surprising surge of support for the New Party, which was competing for the first time in Legislative Yuan elections. The KMT's popular vote slipped from 53% to 46%; the DPP's inched upward from 31% to 33%, and the New Party, which had broken off from the KMT in 1993, received almost 13%. This translated into 85 KMT seats in the new Legislative Yuan, a decline of 11 from 1992, 54 DPP seats (+4), and 21 New Party seats (+7).

      In August Lee announced his decision to run for reelection in March 1996, when Taiwan voters would directly elect a president for the first time. Lee chose Premier Lien Chan as his vice presidential running mate. Law professor Peng Ming-min, a veteran of the democracy movement, was selected by the DPP to carry its banner; his running mate would be Frank Hsieh. By December the presidential race had generated unexpected excitement. The team of Lin Yang-kang and former premier Hau Pei-tsun—both KMT vice-chairmen—announced that they would enter the presidential race as independents, a move that prompted the KMT to revoke their party memberships. The New Party, for its part, announced that it would support the Lin-Hau ticket. Others who declared their intention to run as independents included Chen Li-an, a former president of the Control Yuan, who teamed up with Wang Ching-feng.

      Taiwan's economy in 1995 grew 6.4%, a shade better than the previous year. In the first three quarters, exports and imports surged by 22.8% and 27.5% respectively. Taiwan enjoyed a positive trade balance of $6.9 billion through November. The nation's trade and investment increasingly turned toward Southeast Asian countries such as Vietnam, the Philippines, Malaysia, and Indonesia. Taiwan's per capita gross national product exceeded $12,000 per annum, unemployment was virtually nonexistent, and consumer prices were stable, with inflation a low 2.5%.

      Taiwan accelerated its efforts to rejoin the United Nations, but China's stubborn opposition again stopped this effort well short of success. The long-term problem of how to reconcile Taiwan's de facto independence with China's determination to reestablish control over the island was thrown into sharper relief in 1995, but no viable solution to this problem presented itself. (STEVEN I. LEVINE)

▪ 1995

      Taiwan, which consists of the island of Taiwan and surrounding islands off the coast of China, is the seat of the Republic of China (Nationalist China). Area: 36,179 sq km (13,969 sq mi), including the island of Taiwan and its 86 outlying islands, 22 in the Taiwan group and 64 in the Pescadores group. Pop. (1994 est.): 21,073,000. (Area and population figures include the Quemoy and Matsu groups, which are administered as an occupied part of Fujian [Fukien] province.) Cap.: Taipei. Monetary unit: New Taiwan dollar, with (Oct. 7, 1994) a free rate of NT$26.16 to U.S. $1 (NT$41.61 = £1 sterling). President in 1994, Lee Teng-hui; president of the Executive Yuan (premier), Lien Chan.

      In December 1994 the Republic of China on Taiwan passed another milestone on its remarkable march toward full democracy. The results of the gubernatorial and mayoral elections, pitting the ruling Nationalist Party (KMT) against the Democratic Progressive Party (DPP), its main rival, and the upstart New Party, indicated that Taiwan's eight-year-old democracy was settling into what was basically a two-party system. Voters delivered a split verdict. DPP candidate Chen Shui-bian's election as mayor of Taipei gave his party its greatest electoral victory yet, but KMT incumbent Wu Tun-yi triumphed in Kao-hsiung, Taiwan's second-largest city. In the first election ever held for provincial governor of Taiwan, KMT incumbent James Soong was returned to office by a comfortable majority. The election also indicated that in media-saturated Taiwan, personality and image might be more important than party affiliation. The DPP's reaffirmation of its commitment to the formal independence of Taiwan elicited another warning from the government that Taiwan and the People's Republic on the mainland were juridically equal parts of a single China.

      Taiwan's ongoing efforts to gain international political status and recognition commensurate with its economic strength were stymied by China's stubborn opposition. Taipei's bid to rejoin the UN again failed to get on the agenda. China, moreover, pressured Japan to cancel an invitation to Pres. Lee Teng-hui to attend the Asian Games in Hiroshima, and at the APEC (Asia-Pacific Economic Cooperation) summit in Bogor, Indon., in November, Taiwan was represented by economic planning chief Vincent Siew rather than by the president. To Beijing's (Peking's) dismay, however, Lee's "vacation diplomacy" was quite successful. On unofficial visits he met with the leaders of Malaysia, Singapore, the Philippines, Thailand, and Indonesia. In addition, the Clinton administration responded to congressional pressure and eased some of the irksome restrictions placed on Taiwan's unofficial embassy in Washington, D.C.

      The brutal murders in Zhejiang (Chekiang) province of 24 tourists from Taiwan on March 31 and the attempt at a cover-up by local authorities created an uproar. Taiwan's Straits Exchange Foundation suspended talks with China's Association for Relations Across the Taiwan Strait. Agreements, however, were later reached regarding air piracy, illegal immigration, and fishing disputes. Expanded trade made China Taiwan's second largest export market.

      On April 26 a China Airlines Airbus A-300 crashed in flames at the Nagoya airport in Japan after an uneventful flight from Taipei. Only 7 of the 271 persons aboard survived. A minute before the crash, a pilot had informed the tower that he was aborting the landing and would make a second approach. Although the cause of the crash was not immediately known, Japanese police reported that both pilots had been drinking.

      Taiwan's export-led economy slowly picked up steam in the second half of the year, expanding at an annual rate of just over 6%, a very respectable rate for a mature and developed national economy. Looking to the future, Lien Chan emphasized the need to rely on private-sector investment to achieve the nation's most important large-scale development goals. Despite considerable opposition from antinuclear activists and environmentalists, and over the objections of the DPP, the KMT majority in the Legislative Yuan approved construction of Taiwan's fourth nuclear power plant on the crowded and resource-poor island.

      Unemployment in Taiwan hovered around 1.5%. The China External Trade Development Council pointed to a severe labour shortage, only partly relieved by foreign workers, as one of Taiwan's weaknesses in competing with such export rivals as South Korea, Hong Kong, and Singapore. To avoid U.S. sanctions, Taiwan took steps to ban trade in endangered species, including the elephant, rhinoceros, and tiger. For political rather than economic reasons, Taiwan's long-standing application to join the General Agreement on Tariffs and Trade (GATT) and become a founding member of the successor World Trade Organization was held hostage to China's own efforts to join GATT. Taiwan's sometimes volatile stock market finished the year quite strongly, up 17% from the beginning of the year. At midyear, the country's foreign exchange reserves stood at an impressive $90.1 billion. Once again Taiwan had demonstrated that political democratization was fully consistent with economic growth and social stability. (STEVEN I. LEVINE)

▪ 1994

      Taiwan, which consists of the island of Taiwan and surrounding islands off the coast of China, is the seat of the Republic of China (Nationalist China). Area: 36,179 sq km (13,969 sq mi), including the island of Taiwan and its 86 outlying islands, 22 in the Taiwan group and 64 in the Pescadores group. Pop. (1993 est.): 20,926,000. (Area and population figures include the Quemoy and Matsu groups, which are administered as an occupied part of Fujian [Fukien] province.) Cap.: Taipei. Monetary unit: New Taiwan dollar, with (Oct. 4, 1993) a free rate of NT$26.91 to U.S. $1 (NT$40.78 = £1 sterling). President in 1993, Lee Teng-hui; presidents of the Executive Yuan (premier), Hau Pei-tsun and, from February 10, Lien Chan.

      The fire of partisan politics kept the political pot boiling furiously in the Republic of China in Taiwan throughout 1993 as support for the ruling Kuomintang (KMT) continued to erode. Challenges both from inside and outside the KMT tested the leadership of Pres. Lee Teng-hui, who was also chairman of the KMT. On February 10 the National Assembly approved Lee's choice of Lien Chan to head the Executive Yuan, a post equivalent to that of premier. Lien had earned a doctorate in political science at the University of Chicago and had served as provincial governor of Taiwan. With his appointment the two top government posts, for the first time, were held by native-born Taiwanese.

      Critical of what they viewed as Lee's weakening commitment to the concept of a united China, a small group of mostly second-generation mainlanders in the KMT formed an intraparty faction in May called the New KMT Alliance and then bolted the KMT in August to form the Chinese New Party. Coming out in favour of direct talks with China and the establishment of direct transportation links between Taiwan and mainland China, leaders of the Chinese New Party said they hoped to shock the KMT into undertaking long-overdue reforms.

      At its 14th National Party Congress in August, Lee was reelected chairman of the KMT by a large majority in the first such secret ballot, and his supporters garnered 151 of the 210 seats on the Central Committee. Four vice-chairmen were added to the party hierarchy, two of whom supported Lee and two who did not. Notwithstanding Lee's victory, party leaders felt their grip on power was imperiled. KMT leaders were finding it increasingly difficult to enforce party discipline, and on the eve of Taiwan's off-year local elections, the KMT Central Standing Committee expelled 19 party members for running without the KMT's official endorsement or for supporting candidates fielded by opposition parties.

      Encouraged by dissension in the KMT ranks and buoyed by its gains in the 1992 Legislative Yuan elections, the opposition Democratic Progressive Party (DPP) had high hopes of victory in the November local elections. The KMT, however, increased its share of mayoral and county magistrate offices from 14 to 15; the DPP slipped from 7 to 6; and Independents took 2. For the KMT the downside of the election was their loss of popular support, which slipped from 53 to 47%. The DPP's share edged upward from 38 to 41%, indicating that for the first time, the electorate might be viewing the DPP as a plausible governing alternative to the KMT rather than as just a party of protest.

      With rare bipartisan support, Lee launched a futile bid for Taiwan to rejoin the UN. It had lost its seat in 1971 when the UN withdrew its recognition and transferred it to the People's Republic of China. Direct talks between representatives of Taiwan and China took place in April and November on issues related to their expanding economic relations. Indirect trade via Hong Kong was estimated at $10 billion, although Taiwan exports to the mainland were temporarily slowed by Beijing's (Peking's) midyear austerity program. In September the U.S. sold 41 Harpoon antiship missiles to Taiwan in the largest deal since then president George Bush had authorized the sale of 150 F-16s a year earlier.

      Taiwan's export-driven economy expanded by a very respectable 6% in 1993. A shortage of capital, caused in part by massive private investments on the Chinese mainland, led to the scaling back and prolongation of Taiwan's massive infrastructure development plans. Responding to enormous U.S. pressure, Taiwan passed additional legislation in April to protect intellectual property rights, particularly regarding computer software. However they made their money, the residents of Taiwan continued to live increasingly well as the island's projected 1993 per capita gross national product rose to an estimated $10,600. (STEVEN I. LEVINE)

* * *

▪ self-governing island, Asia

Introduction

Chinese (Wade-Giles)  T'ai-wan  or  (Pinyin)  Taiwan , Portuguese  Formosa 

Taiwan, flag of   island, located about 100 miles (161 km) off the southeast coast of the China mainland. It is approximately 245 miles (394 km) long (north-south) and 90 miles across at its widest point. The largest city, Taipei, is the seat of the government of the Republic of China (ROC; Nationalist China). In addition to the main island, the ROC government has jurisdiction over 22 islands in the Taiwan group and 64 islands to the west in the Pescadores (P'eng-hu Islands) archipelago.

      Taiwan is bounded to the north by the East China Sea, which separates it from the Ryukyu Islands, Okinawa, and mainland Japan; to the east by the Pacific Ocean; to the south by the Bashi Channel, which separates it from the Philippines; and to the west by the Taiwan (Formosa) Strait, which separates it from the China mainland.

 From the mid-1660s to 1895, Taiwan was administered by the imperial Chinese government, after which (until 1945) the island was ruled by the Japanese as a colony. In 1945 Taiwan reverted to China, and in 1949 it became the last territory controlled by the Nationalist government. The government of the ROC has continued to claim jurisdiction over the Chinese mainland, whereas the government of the People's Republic of China on the mainland claims jurisdiction over Taiwan; both governments are in agreement that the island is a sheng (province) of China. Taipei—since 1949 designated by the ROC as the provisional capital of the Republic of China—was the provincial capital until 1967, when the capital was moved to Chung-hsing Hsin-ts'un.

The land (Taiwan)

Relief

 Taiwan is part of the great island system rimming the western Pacific Ocean. The island of Taiwan is formed by a fault block trending north-northeast to south-southwest and tilted toward the west. The more gently rising western face of the block borders the shallow Taiwan Strait, under which the continental shelf connects the island to the Chinese mainland. The terraced tablelands and alluvial plains along the western face of the block provide the principal areas of dense population and the major cities. The steeply sloping eastern face of the block marks the edge of the continental shelf and the beginning of the Pacific Ocean. Aside from one major rift valley, the east coast provides little room for human settlement.

      The coastline on the west is simple and straight, bordered with low sand dunes and lagoons. Deepwater ports are situated at Chi-lung (Keelung), at the northern tip of the island, and at Kao-hsiung, on the southwestern coast.

      The crest of the Chung-yang Shan-mo (Chung-yang Range) (Central Range) lies east of and parallel to the island's axis. Scores of peaks rise to about 10,000 feet, the highest being Yü Shan (13,113 feet [3,997 metres]) in the south-central part of the island. Around the mountainous area are numerous independent hills with an average height of 5,000 feet.

Drainage and soils

      The rivers, nearly all of which rise in the Chung-yang Shan-mo, are short and subject to extreme seasonal variations in flow. Lacking steady currents, most rivers are unreliable for irrigation or hydroelectric power generation. Late-summer typhoons, however, bring torrential rains that are liable to cause floods, especially in the plains, necessitating an extensive system of dikes. The principal rivers are the Tan-shui Ho in the northwest, the Cho-shui Hsi, in the west, and the Kao-p'ing Hsi in the south. Alluvial soil on the plains and in the valleys covers about one-fourth of the island and is its chief resource. The upland soils, subject to drastic erosion, are leached, acid, and infertile.

Climate

      Taiwan straddles the tropical and subtropical zones and has warm summers and mild winters. The climate is moderated by the warm waters of the Kuroshio (Japan Current). The summer is long, lasting from April until November (200 days or more). In cold months the mean monthly temperature is about 59 °F (about 15 °C). Beginning with April, the mean monthly temperature is above 68 °F (20 °C). The highest mean monthly temperature, 86 °F (30 °C), is reached from June to September. Lowland Taiwan is frost-free while the central mountains are covered with snow in winter.

      Mean annual precipitation is 102 inches (2,580 millimetres), although in some years the precipitation in summer alone may exceed 200 inches in some parts of the islands. The upland area receives more rain than the lowlands, and the east receives more than the west. In addition, rainfall is heavier in the north, where winters are drizzly, than in the south, where winters are sunny. Most typhoons and, therefore, most precipitation are concentrated in the months of July, August, and September.

Plant and animal life

      There are green plants on the plains all the year round, and more than half of Taiwan is covered by forests. As the climate varies with elevation, so does the natural vegetation. Stands of mixed bamboo, palm, and tropical evergreen grow in the lowlands; subtropical evergreen forests, including camphor laurel, are found from 2,000 to 6,000 feet; broad-leaved evergreen forests of the temperate zone are represented by cedars, cypress, junipers, rhododendrons, maples, and cryptomeria (Japanese cedar) from 6,000 to 8,000 feet; and coniferous forests are found above 7,500 feet.

      Animal life, similar to that of the southern Chinese mainland, includes deer, wild boars, bears, monkeys, goats, wildcats, and panthers. Birds include pheasant, geese, flycatchers, kingfishers, larks, and many other species. Fish abound in the coastal areas.

Settlement patterns

 The population density of Taiwan has always been highest on the western coastal plains and basins and lowest in the central and eastern mountains. Chinese settlement of Taiwan historically proceeded from south to north along the western coast. Before the introduction of modern transportation, the most convenient access to the interior was along river valleys, and it was up these that the immigrant population expanded.

      Urbanization was the dominant settlement pattern of the 20th century. There has been a noticeable migration from rural areas to towns, especially since mid-century, when the urban population increased from less than half to more than three-fourths of the total population. Three major urban areas have developed: Taipei and its port of Chi-lung in the north and the two port cities of Kao-hsiun in the south and Tʾai-chung in the west.

The people

Ethnolinguistic groups

      The original inhabitants of Taiwan were Malayo-Polynesian aborigines. Taiwan's indigenous peoples have historically been referred to in terms of their language groups, the largest of which are the Ami, Atayal, and Paiwan. Chinese immigrants largely displaced or assimilated the plains aborigines and carried on a protracted conflict with the mountain aborigines, who were subdued only by the Japanese. The aborigines, nearly all of whom now live in the foothills and highlands, constitute about 2 percent of the population. Although several aboriginal dialects and many tribal customs have been retained, the people have increasingly become assimilated, linguistically and culturally, into modern Taiwanese society. Nonetheless, many indigenous groups increased their political activity in the early 21st century, with 14 gaining official recognition as of 2008.

      The great majority of the population—those now called Taiwanese—are descendants of the original immigrants from the Chinese provinces of Fukien and Kwangtung. The Hokkien from southern Fukien constitute the largest of the immigrant groups; their dialect of Chinese is often called the Taiwanese dialect. The Hakka, originally from northern Kwangtung, also have a distinct dialect.

      The most recent addition to Taiwan's population are the predominantly Mandarin-speaking Nationalist adherents, who came to Taiwan from all parts of China in the late 1940s. These “mainlanders” still compose about 15 percent of the population. Because of their prominence in the Nationalist government, Mandarin has become the principal language of Taiwan.

Religions

      Numerous religions have been introduced into Taiwan from many parts of the world. The Chinese brought their religions, principally Buddhism and Taoism. In 1622 the Dutch introduced Protestant Christianity; two years later the Spanish brought Roman Catholicism to the island. In addition, Confucianism has immensely influenced the Chinese people of Taiwan in ethics, morality, and academic thinking. Religion, however, is not a divisive factor on Taiwan. The Chinese tend to be eclectic about religion, many practicing a little of several kinds.

      The principal religions in Taiwan, in addition to the forms of worship of the aborigines, are Taoism and Buddhism. Christians constitute a small but significant percentage of the population; about three-fifths are Protestant and the rest Roman Catholic. There are also a large number of Muslims, most of whom live in the larger cities.

Demography

      The population of Taiwan tripled in the first half of the 20th century. From mid-century, however, the rate of growth steadily declined from about 4 percent to less than 2 percent per year. Modern health measures had lowered the death rate, and Nationalist land reform temporarily raised the birthrate by expanding rural opportunities. In response to growing urban opportunities, however, families soon began concentrating more resources on fewer children. In addition, the government actively promoted family planning and birth control.

Family structure

      The family has long been the most important organizing unit in traditional Taiwanese society. Based on the Confucian precepts of filial piety and ancestor worship, the patrilineal extended family performs many of the savings, investment, and production functions of Western corporations and provides many of the social services assumed by Western governments. The family owns property, pools its resources, and diversifies the occupations of its members, thus maximizing the returns and spreading the risks across the multiple branches and generations.

The economy

      During the 20th century Taiwan's economy has been transformed from agricultural to industrial, and the island's postwar economic development has been one of the most spectacular of any developing country. In constant prices, gross national product increased more than 10 times between the mid-1950s and mid-1980s. The major reason was vigorous export promotion in an expanding global economy. Per capita product and personal income quintupled, while a relatively equal distribution of income became more equitable. The major reasons were the initially broad distribution of ownership of land and capital and the high returns to labour, first in agriculture and later in the export industries. The obligation to increase and repay family resources has motivated the individual Chinese and has produced much of the rapid growth of Taiwan's economy. This growth has proceeded in three phases. The first (c. 1905–55) was the modernization of agriculture and the development of other primary or extractive industries. The second (c. 1935–85) was the development of modern secondary manufacturing industries. The third (since 1965) began the modernization of service industries.

Resources

      Although more than 50 kinds of minerals have been found in Taiwan, total mineral resources are modest. In the north, copper, gold, iron, sulfur, and pyrite exist in only token amounts. In the east, limestone, marble, and dolomite are abundant, although their exploitation contributes little to the economy. Coal reserves are rapidly becoming exhausted. Petroleum and natural gas exist in small quantities on shore, but the continental shelf may contain extensive reserves, particularly of natural gas. Forests are most abundant in the high mountains, but their inaccessability makes exploitation uneconomical.

Agriculture

      Until the mid-20th century Taiwan's best assets were its fertile soils, tropical climate, and large agricultural labour force. Agriculture provided the logical starting point for economic development after World War II. Since about 1970, however, rising agricultural costs have made agricultural exports uncompetitive, and Taiwan has had to rely increasingly on food imports.

      One-quarter of Taiwan's total area is arable, and all available land is fully cultivated, including sloping areas, dry riverbeds, and reclaimed tidal lands. The single most important crop is rice, with which more than one-half of the total cultivated area and most of the irrigated portion is planted. More than two-thirds of the paddy fields are double-cropped. The Japanese introduced improved strains of rice, chemical fertilizers, and modern irrigation methods, and the Nationalists continued to modernize rice production. Rice yields per acre have therefore increased dramatically, although this has created an oversupply.

      Sugarcane, tea, and fresh bananas, once principal exports, are still important domestically. Other fruits, such as pineapples, litchis, longans, oranges, grapes, and strawberries, abound. Most vegetables—including mushrooms and asparagus, which are canned for export—are produced in the central and southern regions.

Forestry and fisheries

      With many mountains, Taiwan has abundant timber. Inaccessibility, low quality, and high costs limit production, however, and have made it necessary to import lumber. In addition, overcutting and inadequate reforestation measures have caused erosion and destructive floods.

      With the exception of eels and snails, which are high-value exports, fishery production is mostly for domestic consumption. The warm currents off the east coast provide good deep-sea fishing grounds, especially for tuna.

Mining and quarrying

      Petroleum has replaced coal as the major energy source. Domestic natural gas also is produced. The quarrying of marble and dolomite is increasing as rail connections are improved. Salt is produced by solar evaporation along the southwestern coast.

Energy

      Northern Taiwan once produced some coal, but its poor reserves are now exhausted. Heavy rainfall and high mountains hold great hydroelectric potential, but most economical sites have been exploited, and hydropower provides a declining proportion of the energy supply. In the 1960s and '70s the principal growth in energy sources came from thermal electric power generation using imported petroleum. Rising oil costs and national defense needs, however, accelerated the development of nuclear electric power. By the 1980s three nuclear plants accounted for one-third of Taiwan's installed capacity and about one-half of actual generation.

Industry

      In the 1950s and '60s Taiwan's comparative trade advantage lay in its abundant cheap labour supply. Consequently, labour-intensive light industry predominated, producing such nondurable consumer goods as foodstuffs and textiles, at first largely for domestic consumption but after 1960 increasingly for export. By the 1960s and '70s investment had shifted to more capital-intensive heavy industries turning out consumer durables (appliances, vehicles), producer nondurables (steel, petrochemicals), and producer durables (machinery, ships). Some capital-intensive industries, particularly those run by state firms, have proved unprofitable, but the government maintains them to supply the private sector and to bolster national defense. In the 1970s labour became scarce and wages increased, making Taiwan's labour-intensive exports less competitive. Consequently, both government and private business accelerated efforts to develop skill-intensive high-technology industries such as those producing specialty chemicals, pharmaceuticals, precision instruments, sophisticated electronics, and information-processing systems.

Trade

      Because of Taiwan's limited resources and intermediate technology, its manufactures long depended heavily on imported materials, equipment, and technology (particularly from Japan and the United States). Moreover, because of the limited domestic market, Taiwan's manufactures also depended heavily on exports (particularly to the United States). Thus until the mid-1980s Taiwan balanced a chronic trade deficit with Japan against a chronic trade surplus with the United States. In the 1980s Taiwan attempted to diversify its trade with Europe and the Third World.

      By the late 20th century manufactured goods accounted for more than 95 percent of all exports, led by electronic products and appliances, articles of clothing, footwear, textile yarns and fabrics, toys and sporting goods, and metal products. Imports were highly diversified, consisting of a variety of consumer goods and raw materials, including petroleum and petroleum products, electronic products, nonelectrical machinery, and chemicals.

Services

      Since the mid-1970s there has been an accelerating shift from traditional personal services (small shops and restaurants) to modern personal services (department stores and hotels) and modern commercial services (finance and communications). Commerce and services became internationalized as Taiwan handled a larger proportion of its own trade, imported foreign services such as fast food, and exported services such as construction management and computer programming. Nevertheless, most private businesses remained family firms, most of them small. The cultural importance of the family has made Taiwan's economy lean and flexible, but it also has inhibited an increase in the scale and modernization of accounting, finance, advertising, and trade.

Management of the economy

      Since 1945 the state has played a dominant economic role, although a private sector also has functioned. Since about 1975 private business increasingly charted its own course, often ahead of government initiatives and often in collaboration with foreign firms. Economic development has since acquired much momentum of its own. The government continues, however, to run key industries (electricity, steel, petroleum), construct basic infrastructure (railways, highways, waterways), oversee the financial system (both government and private banks), and initiate the development of new sectors by facilitating the transfer of technology and by disseminating market information.

      Taxes in Taiwan include income, legacy, commodity, stamp, stock, farm, land, increment on land value, and business taxes. They are levied according to a progressive rate; people with small incomes pay little tax.

      The Chinese Federation of Labour (CFL) is a nationwide organization of industrial and craft unions. Other national labour organizations include those for seamen, railway workers, and postal workers. There are local unions in all factories, transportation and public utility units, and occupational and vocational groups.

Transportation

      The primary internal transport links are the well-developed highway and railway networks, although domestic air travel is also important. The principal roads consist of a highway running around the perimeter of the island; three east–west highways crossing the island in the northern, middle, and southern regions; and a north–south expressway connecting the major west coast cities. Passenger-bus transportation is provided between large cities and small towns throughout the island. Few people own cars, but many have motorcycles. The railway system of Taiwan consists of a trunk line that roughly parallels the north–south expressway and a smaller line along the east side of the island that extends to the southeastern port of T'ai-tung; the construction of a line in the south will complete the encirclement of the island. The major domestic air routes are between Taipei and the larger cities.

      External transport links are by sea and air. The international seaports are Chi-lung, Kao-hsiung, T'ai-chung, Su-ao, and Hua-lien. Chi-lung, Kao-hsiung, and T'ai-chung have good facilities for anchoring large ships; Hua-lien has facilities that are somewhat more limited. The Chiang Kai-shek Airport at T'ao-yüan is the facility for international air travel in northern Taiwan. The southern part of the island is served by the international airport at Kao-hsiung.

Administration and social conditions

Government

      For centuries Taiwan has been ruled by outsiders—Imperial Chinese bureaucrats, colonial Japanese administrators, and, most recently, Nationalist Party (Kuomintang; KMT) refugees from the Chinese mainland. In 1949, with the success of the communist rebellion in mainland China, the KMT retreated to Taiwan and set up office. For most of the post-World War II period (1945–90), the Nationalist government's claim to rule Taiwan was predicated on its claim to rule all of China, and so-called temporary emergency measures in effect led to the creation of an authoritarian regime in Taiwan based on martial law. By the 1990s, however, the Nationalist party-state had largely shifted its focus to Taiwan, restaffing its leadership with Taiwanese and submitting itself to election, and the government began initiating liberalization measures. Some groups on Taiwan agitated for independence, but such calls were met with considerable opposition from the government of the People's Republic of China (China).

Constitutional structure

      Formally, the KMT applied to postwar Taiwan the constitution they had drawn up in 1947 for all of China. This eclectic document includes elements from traditional China (personnel and investigative councils), from Western parliamentarism (a cabinet and premier approved by the legislative body), and from Western presidentialism (a president elected by a National Assembly). The 1947 constitution permits democracy, guarantees civil liberties, and promotes political participation and cultural development.

      The central government also includes five constitutionally mandated councils (yüans): Legislative, Executive, Judicial, Examination, and Control. The Legislative Yuan, the membership structure of which parallels that of the National Assembly, enacts legislation. The Executive Yuan, the cabinet, is headed by a premier, who is appointed by the president but is nominally answerable to the Legislative Yuan. The Judicial Yuan oversees the court system. The Examination Yuan fulfills the functions of a civil service commission, and the Control Yuan oversees government administration.

      The constitution also provides for provincial and local administrative institutions. The island of Taiwan and the cities of Taipei and Kao-hsiung have provincial status. At the local level are 16 counties (hsien) and five municipalities (shih), which, according to the constitution, are self-governing. In reality, however, they have had little autonomy from the national government.

Power structure

      In practice, for most of the period since 1949, Taiwan has been ruled by a dictator who led three sectors: an external and internal security apparatus, a quasi-Leninist party, and a technocratic government. The dictator's position as “paramount leader” was the most important, tying together institutional sectors through personal networks. The security sector was the ultimate foundation of the regime, reinforced by a large military budget. The KMT was the arena for promoting personnel and deciding policy. For more than four decades the National Assembly consisted mostly of the same representatives that had been elected on the mainland in 1948, supplemented by minority additions periodically elected by Taiwan. The KMT held regular elections for representatives to the community, local, and provincial offices, but these posts had little power. The government managed the economy with a success that became an example among developing countries and which facilitated Taiwanese acceptance of Nationalist rule.

      Beginning in 1986, responding to opposition and public demands, the KMT began allowing increased liberalization of government. The KMT abolished martial law in 1987 and legalized the formation of opposition political parties; opposition candidates, notably those of the Democratic Progressive Party (DPP), began winning seats in the legislature. In 1991 the KMT rescinded the emergency provisions and forced all original mainland national representatives to retire. A National Security Council was created. With the presidential and parliamentary elections of 2000 and 2001, respectively, the DPP became the first party to oust the KMT from the government. In 2008, however, both the presidency and control of the legislature (with more than a two-thirds majority) returned to the KMT.

Armed forces

      The military and security forces have had considerable power, particularly during the decades of martial law. The armed forces include the air force, army, navy, combined service force, military police, and garrison force.

Education

      Both the Chinese government and the Chinese family have long believed in investing heavily in education, in the postwar period increasingly for girls as well as for boys. In the past, educational opportunities usually were open only to the elite. The Japanese during the early 20th century, when they ruled the island, began to extend primary education to ordinary Taiwanese in an effort to train loyal citizens and literate workers. Taiwan now has one of the best-educated populations in Asia, second only to that of Japan. The preferred educational route is through liberal arts, looking to a career in government, or through professional training at a prestigious university. As postwar economic development gathered momentum, however, both government and families have also recognized the value of commercial and technical education.

      Education is compulsory for nine years (six years of primary school and three years of middle school); secondary education includes senior high schools and vocational schools. There are also preschool education and social education, including adult education and special education. There are over 100 institutions of higher education, more than two-thirds of them private. Among the major public ones are the National Taiwan University (founded 1928) at Taipei, National Cheng Kung University (1931) at T'ai-nan, National Chung Hsing University (1961) at T'ai-chung, and National Sun Yat-sen University (1980) at Kao-hsiung.

Health and welfare

      Modern health practices were instituted early in the 20th century by the Japanese and were further developed by the Nationalist government. The Japanese largely eliminated tropical diseases—which until then had been a principal barrier to development in Taiwan—by installing water- and sewage-treatment plants and by training and equipping medical personnel. Taiwan now has a well-developed hospital system and medical profession. Life expectancy and infant-mortality rates are about the same as in most Western countries.

      The overall economic growth and the Chinese custom of families caring for their elderly and unemployed members have kept government welfare spending low, but, because the birth rate is decreasing as the number of elderly is increasing, concern has been growing about the Chinese family's ability to provide social security in the future. The government has thus been instituting social insurance programs covering an increasing percentage of the population.

      The rapid growth of Taiwan's large urban centres has resulted in housing shortages, which generally have been met by private developers. The government has built some apartments that have then been sold to the public by means of long-term, low-interest loans. In addition, the government has provided free housing for the poor.

Cultural life

      The people of Taiwan enjoy a rich heritage of traditional Chinese culture and a lively fusion of modern Chinese and Western cultures. The government attempts to preserve and revitalize such traditional arts as painting, calligraphy, ceramics, and music by sponsoring concerts, classes, and competitions. The National Palace Museum in Taipei houses an immense collection of ancient Chinese paintings and books, pottery, porcelain, curios, and sculptures. Elements of traditional popular culture include Chinese opera, Taiwanese opera and puppet theatre, and Chinese and aboriginal folk dances. All major mainland regional cuisines are represented, particularly in Taipei.

      Beginning in the 1970s, the government gave increasing attention to cultural development, establishing art museums and performance centres in the major cities and libraries and cultural centres in an increasing number of localities. Exhibitions and performances by foreign painters, photographers, musicians, and dancers are frequent. Foreign-trained artists have brought a contemporary touch to their work. International trends in clothing and life-styles quickly reach Taiwan, which makes many fashionable Western-style consumer goods for export. Domestic television has long carried many foreign programs, and liberalization of import restrictions in the 1980s brought an invasion of foreign fast food, cosmetics, and other items. Both traditional Chinese exercises and modern Western sports such as baseball are popular. In addition, several national parks have been created in wilderness areas.

      There are about 30 daily newspapers and thousands of periodicals, many of the latter house organs of various organizations. The government sets general guidelines for the political and cultural content of newspapers and periodicals and has powers of confiscation and suspension. There are three television stations and about 30 radio broadcasting companies with more than 180 stations.

Yu-chin Kang Edwin A. Winckler Ed.

History

      Taiwan was known to the Chinese as early as the 3rd century AD, but settlement by the Chinese was not significant until the first quarter of the 17th century after recurrent famines in Fukien Province encouraged emigration of Fukienese from the mainland. Before then the island was a base of operations for Chinese and Japanese pirates. The Portuguese, who first visited the island in 1590 and named it Ilha Formosa (“Beautiful Island”), made several unsuccessful attempts at settlement. The Dutch and Spaniards established more lasting settlements, the Dutch at An-p'ing in southwestern Taiwan in 1624, the Spaniards in 1626 at Chi-lung in the north. Until 1646, when the Dutch seized the Spanish settlements, northern Taiwan was under Spanish domination, the south under Dutch control. The Dutch were expelled in 1661 by Cheng Ch'eng-kung (Zheng Chenggong), a man of mixed Chinese-Japanese parentage and a supporter of the defeated Ming emperors, who used the island as a centre of opposition to the Ch'ing (Manchu) regime.

Imperial Chinese rule

      In 1683, 20 years after Cheng Ch'eng-kung's death, the island fell to the Ch'ing and became part of Fukien Province. Meanwhile, sizable migrations of refugees, Ming supporters, had increased the population to about 200,000. As migrants streamed in from southeastern China, large areas in the north were settled. T'ai-nan (then called T'ai-wan) was the capital. By 1842 the population was estimated at 2,500,000, and both rice and sugar had become important exports to mainland China. In 1858 the Treaty of T'ien-ching (Tientsin) designated two Taiwan ports as treaty ports, T'ai-nan and Tan-shui, the latter a river port, long used as a port of call under the Spanish and Dutch, and downstream from the growing city of Taipei. Tea became an important export crop, and the island's trade centre shifted to the north, particularly to Tan-shui, where British trading companies established their headquarters.

      Japan's continued interest in the island was reflected in a Japanese punitive expedition of 1874 ostensibly to protect the lives of Ryukyu fishermen along the island's coasts. The French blockaded the island during the undeclared Sino-French war of 1884–85 and occupied Chi-lung for a short period. In 1886 Taiwan became a separate province of China with a legal capital at T'ai-chung and a temporary capital at Taipei, which became the legal capital in 1894.

Japanese rule

      In 1895, as a result of the Treaty of Shimonoseki (Shimonoseki, Treaty of) after the Sino-Japanese War, China ceded Taiwan and the Pescadores Islands to Japan, and the Japanese occupied Taipei in June of that year over the violent opposition of the Taiwanese population. For several months a Republic of Taiwan was in existence, but it was overcome by Japanese forces. The Japanese also faced the hostility of the aborigines, some of whom remained uncontrolled until the outbreak of the Pacific war. Taiwan was developed as a supplier of rice and sugar for Japan. Irrigation projects, agricultural extension services, and improvements in transportation and power supplies led to rapid increases in Taiwan's gross domestic product. Japanese policy was oriented toward the Japanization of the Taiwanese; Japanese was the language of instruction in a widespread basic educational system, and even after the end of World War II Japanese remained a lingua franca among the various Chinese dialect groups. In the 1930s Japanese economic policy shifted toward the development of industries based on relatively cheap hydroelectric power. Nevertheless, rice and sugar remained the basis of Taiwan's prewar export trade, almost all of which was directed toward Japan. Imports consisted largely of diverse manufactures from Japan. During World War II, Taiwan was a major staging area for Japan's invasion of Southeast Asia.

The Republic of China

      Taiwan's history after World War II falls roughly into two periods: one from 1945 to about 1970, when the Nationalist government's position had considerable international support, especially from the United States; and one since 1970, when the major focus of international diplomatic attention shifted to the People's Republic of China (China).

1945 to c. 1970

      As a result of the Cairo agreement of 1943, Taiwan was turned over to the Chinese Nationalist government on Oct. 25, 1945, after the defeat of Japan. Many Taiwanese welcomed liberation from Japanese control, but much to their chagrin, the Nationalists' objectives toward Taiwan were essentially to maintain Japanese colonial institutions—substituting mainlanders for Japanese—and to exploit the island for rebuilding the war-torn mainland. When in early 1947 the Taiwanese urban middle class protested, the mainlanders massacred thousands of them. Thirty years would pass before a new generation of Taiwanese political leaders emerged and mass Taiwanese resentment subsided.

Norton S. Ginsburg Edwin A. Winckler

      In 1949–50, following the victories of the Chinese communists on the mainland, a stream of Nationalist troops, government officials, and other refugees poured onto the island. Final defeat for Chiang Kai-shek's Nationalists seemed only a matter of time. Little outside assistance was forthcoming, and the United States, among others, appeared determined to allow the civil war to run its course toward the eventual destruction of the KMT and the incorporation of Taiwan into the People's Republic. The People's Liberation Army, however, placed priority on mopping up holdout Nationalist units on the mainland and on establishing authority in Tibet. And because Beijing (Peking) lacked substantial capability to land its forces on Taiwan or even on such lesser remaining Nationalist-held islands as Quemoy (Quemoy Island) and Matsu (Matsu Island) close by the mainland, there was no immediate prospect of Chiang's final defeat. He survived until the outbreak of the Korean War provided a decisive respite.

      When North Korean troops invaded South Korea in June 1950, U.S. Pres. Harry S. Truman, assuming Beijing's complicity in the action from the outset, interposed the U.S. 7th Fleet between Taiwan and the mainland; during the conflict the United States increased its economic and military aid to Taipei. In the first of several major crises over Quemoy and Matsu, following the Korean War, the United States incorporated the Republic of China into its Pacific defense system. A mutual defense treaty signed in December 1954 pledged the United States to the defense of Taiwan and the neighbouring Pescadores Islands.

      After the Bandung Conference in April 1955, there was substantial hope that Beijing might limit its tactics to the “peaceful liberation” of Taiwan. During the initial stages of talks that began in August 1955 between the United States and China, it seemed that this hope might be formalized in a treaty mutually renouncing the use or threat of force in the Taiwan area. These talks broke down, however, and by 1958 Beijing had adopted a more militant approach. In August 1958 Beijing resumed an artillery bombardment of Quemoy and issued an ultimatum demanding the surrender of the island's Nationalist garrison, an ultimatum broken by the interposition of U.S. naval power and the behind-the-scenes withdrawal of Soviet support.

      U.S. support was important in the consolidation and rejuvenation of the KMT (Nationalist Party) and its governmental organs. There was a dramatic increase in industrial and commercial construction on Taiwan and a significant improvement in communications and educational facilities. The KMT began incorporating members who were younger, better educated, more widely traveled, and much less likely to have been selected because of political connections alone.

      In its first two decades on Taiwan, the KMT began to lose some of its original militancy. Memories of defeat provided the basis for much Nationalist solidarity during the 1950s and early '60s, and most officials, at least publicly, believed that their presence on the island would be temporary. As younger mainlanders and Taiwanese rose to positions of authority, however, and as the pain of defeat faded, Taiwan itself became more the focus of attention.

      Yet, the strongest voices associated with Chiang and his son and political heir, Chiang Ching-kuo, continued to insist on the inevitability of reconquest of the mainland. The approved scenario held that reconquest would originate in an uprising in China, followed by popular demand for a Nationalist return. The certainty of this view waned over the years, but in the mid-1960s the intensification of the Vietnam War and the upheaval on the mainland during the Cultural Revolution revived the hopes of many in the KMT. Thus, economic modernization, despite its success, was never considered as the main goal. Modernization would provide the necessary basis, it was argued, to build up power and international prestige and to assure support from allies—all required for the eventual counterattack.

      The key to external support was the United States, the policy of which was indicated by its position toward the seating question at the United Nations. Until 1970 the United States was able to postpone consideration of resolutions to replace Taipei's representatives with those of Beijing. U.S. firmness at the United Nations and other evidence of U.S. fidelity—as well as the reluctance of many independent countries in Africa and Asia to recognize Beijing—made Chiang's government confident that its international position was reasonably secure.

      During the 1960s this spirit of confidence and lessening of tension was reinforced by an increased American demand for Taiwanese goods, which transformed Taiwan from an aid client of the United States to a trading partner. The economic boom also aided the KMT: the growing Taiwanese interest in collective political demands—including a secret separatist movement that was actively suppressed by the KMT—was transformed into a pursuit of individual economic advancement. Chiang Kai-shek began to turn over the supervision of domestic affairs to his son, who became deputy premier in 1969 and premier in 1972; after his father's death in April 1975 he became chairman of the KMT and in 1978 president of Taiwan.

Taiwan since 1970

      Domestically, the transition in the 1970s from Chiang Kai-shek to Chiang Ching-kuo as president was accompanied by a gradual shift from a more autocratic to a more populist style of authoritarianism. Chiang Ching-kuo's political associates recruited more Taiwanese into higher positions in the KMT and the military, and the President made frequent visits to all parts of Taiwan.

      Between 1969 and 1971, U.S. restrictions on trade and travel by Americans to China were eased, and the United States began to explore alternatives to opposing Beijing's representation in the United Nations. Meanwhile, a number of countries severed diplomatic relations with Taipei, and in 1971 Taiwan was ousted from the United Nations and the People's Republic seated. U.S. Pres. Richard M. Nixon (Nixon, Richard M.) visited Beijing in 1972, and the following year the United States established quasi-diplomatic relations with the People's Republic.

      For Taipei, the new U.S.–China diplomacy came as a devastating setback. Nationalist officials began to prepare the island for greater international isolation, but a stalemate in U.S.–China relations during the mid-1970s provided a temporary reprieve for the island. That reprieve appeared to be over on Jan. 1, 1979, with U.S. establishment of formal diplomatic relations with the People's Republic of China. In the normalization agreement the United States accepted an end to all official U.S. defense ties with Taiwan and acknowledged the position that there is but one China and that Taiwan is part of China. It thus precluded itself from any future support for an independent Taiwan. Subsequently, however, the U.S. Congress passed the Taiwan Relations Act, authorizing continued social and economic ties with Taiwan. The United States also unilaterally stated that it would continue to sell defensive arms to Taiwan, a move that complicated U.S.–China talks concerning greater defense cooperation.

      In the early 1980s the KMT rejected overtures from the People's Republic for negotiations toward eventual reunification. Domestically, financial scandals jolted the KMT, as evidence emerged that rich Taiwanese businessmen wielded influence over KMT officials and could neutralize government regulators. Chiang Ching-kuo opened communications with the Chinese communist mainland and with domestic political opposition in 1985. The opposition formed the Democratic Progressive Party (DPP) in 1986, and in 1987 the KMT lifted martial law, which had been in effect since 1949. The government began permitting visits to the Chinese mainland; scholars, journalists, businesspeople, tourists, and people visiting relatives traveled to the People's Republic.

      In January 1988 Chiang Ching-kuo died. His chosen successor, Vice Pres. Lee Teng-hui, became Taiwan's first Taiwanese president. Despite the struggle between conservatives and progressives within the KMT, political democratization continued. Control of the KMT party organization began passing from central party career cadres to local Taiwanese politicians. The DPP suffered internal conflict between moderates aiming to win elections and radicals advocating Taiwanese independence. Nevertheless, a significant minority of the Taiwanese public supported the DPP. Taiwan's legislative and local elections in December 1989 were the first in which parties other than the KMT were allowed to participate.

      With the collapse of the Soviet Union and of communist governments in eastern Europe in the early 1990s and the resulting dramatic changes in world diplomacy and the balance of power, Taiwan's relations with the United States improved to some extent. Taiwan asserted its de facto autonomy through a pragmatic diplomacy but also began normalizing relations with the People's Republic of China by establishing organs for managing ongoing economic and social intercourse and for negotiating possible eventual reunification. The advent of political liberalization in Taiwan focused renewed attention on social problems and fostered a cultural renaissance.

John Wilson Lewis Edwin A. Winckler Ed.

      Taiwan's economic ties with mainland China grew dramatically after 1990, both in terms of the amount of investment money flowing from Taiwan to the mainland and in overall cross-straits trade; by 2005 the People's Republic had become Taiwan's most important trading partner. However, the rise of the DPP as a political force in Taiwan also led to strained relations with the mainland, which became more pronounced after DPP leader Chen Shui-bian (Ch'en Shui-pian) was elected president of Taiwan in 2000. The DPP also went on to win control of the Legislative Yuan the following year, the first time that the KMT had been fully ousted from power in the government. By 2004, though, the KMT and its allies had regained a majority of legislative seats, and in the 2008 parliamentary elections the party won convincingly over the DPP, garnering nearly three-fourths of the seats. Later that year, the KMT reclaimed full control of the government with the election of party leader Ma Ying-jeou to the presidency.

Ed.

Additional Reading

The best general official reference is Republic of China: A Reference Book, ed. by Harold Chang (et al.), sponsored by Taiwan's Government Information Office. The most comprehensive descriptive geography remains Cheng-siang Chen, Tai-wan ti chih: A Geography of Taiwan, 3 vol. (1959–61), in Chinese. An overview of postwar economic development is Walter Galenson (ed.), Economic Growth and Structural Change in Taiwan (1979). On social and cultural background, see Emily Martin Ahern and Hill Gates (eds.), The Anthropology of Taiwanese Society (1981). Free China Journal (weekly) and Free China Review (monthly) cover current political and cultural events.Edwin A. Winckler

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