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Taiwan (12/05)For the most current version of this Note, see Background Notes A-Z.
PROFILE NAME: Taiwan Geography People Political Establishment Economy PEOPLE Education Languages Religions Culture HISTORY In 1664, a Chinese fleet led by the Ming loyalist Cheng Ch'eng-kung (Zheng Chenggong, known in the West as Koxinga) retreated from the mainland and occupied Taiwan. Cheng expelled the Dutch and established Taiwan as a base in his attempt to restore the Ming Dynasty. He died shortly thereafter, and in 1683, his successors submitted to Manchu (Qing Dynasty) control. From 1680, the Qing Dynasty ruled Taiwan as a prefecture and, in 1875, divided the island into two prefectures, north and south. In 1887 the island was made into a separate Chinese province. During the 18th and 19th centuries, migration from Fujian and Guangdong provinces steadily increased, and Chinese supplanted aborigines as the dominant population group. In 1895, a weakened Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki following the first Sino-Japanese war. During its 50 years (1895-1945) of colonial rule, Japan expended considerable effort in developing Taiwan's economy. At the same time, Japanese rule led to the "Japanization" of the island, including compulsory Japanese education and forcing residents of Taiwan to adopt Japanese names. At the end of World War II in 1945, Taiwan reverted to Chinese rule. During the immediate postwar period, the Nationalist Chinese (KMT) administration on Taiwan was repressive and corrupt, leading to local discontent. Anti-mainlander violence flared on February 28, 1947, prompted by an incident in which a cigarette seller was injured and a passerby was shot to death by Nationalist authorities. The island-wide rioting was brutally put down by Nationalist Chinese troops, who killed thousands of people. As a result of the February 28 Incident, the native Taiwanese felt a deep-seated bitterness toward the mainlanders. For 50 years the KMT authorities suppressed accounts of this episode in Taiwan history. In 1995 a monument was dedicated to the victims of the "2-28 Incident," and for the first time, Taiwan's leader, President Lee Teng-hui, publicly apologized for the Nationalists' brutality. Starting before World War II and continuing afterwards, a civil war was fought on the mainland between Chiang Kai-shek's KMT government and the Chinese Communist Party led by Mao Zedong. When the civil war ended in 1949, 2 million refugees, predominately from the Nationalist government, military, and business community, fled to Taiwan. In October 1949 the People's Republic of China (P.R.C.) was founded on the mainland by the victorious communists. Chiang Kai-shek established a "provisional" KMT capital in Taipei in December 1949. During the 1950s, the KMT authorities implemented a far-reaching and highly successful land reform program on Taiwan. They redistributed land among small farmers and compensated large landowners with commodities certificates and stock in state-owned industries. Although this left some large landowners impoverished, others turned their compensation into capital and started commercial and industrial enterprises. These entrepreneurs were to become Taiwan's first industrial capitalists. Together with refugee businessmen from the mainland, they managed Taiwan's transition from an agricultural to a commercial, industrial economy. Taiwan has developed steadily into a major international trading power with nearly $342 billion in two-way trade (2004) and the world's 17th largest economy. Taiwan's accession to the World Trade Organization in 2002 has expanded its trade opportunities and further strengthened its standing in the global economy. Tremendous prosperity on the island has been accompanied by economic and social stability. Chiang Kai-shek's successor, his son Chiang Ching-kuo, began to liberalize Taiwan's political system, a process that continued when President Lee Teng-hui took office in 1988. The direct election of Lee Teng-hui as president in 1996 was followed by opposition Democratic Progressive Party candidate Chen Shui-bian's election victory in March 2000. Chen was re-elected in March 2004 in a tightly contested election. ADMINISTRATION The first National Assembly, elected on the mainland in 1947 to carry out the duties of choosing the President and amending the constitution, was re-established on Taiwan when the KMT moved. Because it was impossible to hold subsequent elections to represent constituencies on the mainland, representatives elected in 1947-48 held these seats "indefinitely." In June l990, however, the Council of Grand Justices mandated the retirement, effective December 1991, of all remaining "indefinitely" elected members of the National Assembly and other bodies. The second National Assembly, elected in 1991, was composed of 325 members. The majority were elected directly; 100 were chosen from party slates in proportion to the popular vote. This National Assembly amended the Constitution in 1994, paving the way for the direct election of the President and Vice President that was held in March 1996. In April 2000, the members of the National Assembly voted to permit their terms of office to expire without holding new elections. In June 2005 the National Assembly voted to dissolve itself, leaving Taiwan with a unicameral legislature. The President is both leader of Taiwan and Commander-in-Chief of its armed forces. The President has authority over four of the five administrative branches (Yuan): Executive, Control, Judicial, and Examination. The President appoints the President of the Executive Yuan, who also serves as the Premier. The Premier and the cabinet members are responsible for government policy and administration. The main lawmaking body, the Legislative Yuan (LY), was originally elected in the late 1940s in parallel with the National Assembly. The first LY had 773 seats and was viewed as a "rubber stamp" institution. The second LY was not elected until 1992. The third LY, elected in 1995, had 157 members serving 3-year terms, while the fourth LY, elected in 1998, was enlarged to 225 members. The LY has greatly enhanced its standing in relation to the Executive Yuan and has established itself as a major player on the central level. With increasing strength, size, and complexity, the LY now mirrors Taiwan's recently liberalized political system. In the 1992 and 1995 elections, the main opposition party--the Democratic Progressive Party (DPP)--challenged the half-century of KMT dominance of the Legislature. In both elections, the DPP won a significant share of the LY seats, leaving only half of the LY seats in the hands of the KMT. In 2001, the DPP won a plurality of LY seats (88), compared to the KMT's 66. The PFP won 45 seats, the TSU 13, and all other parties 13. In the December 2004 LY election, the Pan-Blue coalition won a slender majority of 114 of the 225 seats (later increased to 115) compared to the Pan-Green coalition's 101 (later reduced to 100). Election of four KMT legislators to city mayor and county magistrate positions in the December 2005 local elections further reduced the Pan-Blue majority to 111 seats of the LY's 220 occupied seats. In 1994, when the National Assembly voted to allow direct popular election of the President, the LY passed legislation allowing for the direct election of the Governor of Taiwan Province and the mayors of Taipei and Kaohsiung Special Municipalities. These elections were held in December 1994, with the KMT winning the Governor and Kaohsiung Mayor posts, and the DPP winning the Taipei Mayor's position. In 1998, the KMT's Ma Ying-jeou wrestled back control of the mayorship of Taipei from the opposition DPP leader Chen Shui-bian. In the same election, however, DPP leader Frank Hsieh managed to defeat the KMT incumbent to become Mayor of Kaohsiung. Additionally, in a move to streamline the administration, the position of elected Governor and many other elements of the Taiwan Provincial Government were eliminated. The Control Yuan (CY) monitors the efficiency of public service and investigates instances of corruption. The 29 Control Yuan members are appointed by the President and approved by the National Assembly; they serve 6-year terms. In recent years, the Control Yuan has become more activist, and it has conducted several major investigations and impeachments. Since December 2004, however, the LY has refused to approve the new slate of CY members proposed by President Chen, leaving the CY moribund. The Judicial Yuan (JY) administers Taiwan's court system. It includes a 16-member Council of Grand Justices (COGJ) that interprets the constitution. Grand Justices are appointed by the President, with the consent of the National Assembly, to 9-year terms. The Examination Yuan (EY) functions as a civil service commission and includes two ministries: the Ministry of Examination, which recruits officials through competitive examination, and the Ministry of Personnel, which manages the civil service. The President appoints the President of the Examination Yuan. Principal Leaders POLITICAL CONDITIONS After 1986, the KMT's hold on power was challenged by the emergence of competing political parties. Before 1986, candidates opposing the KMT ran in elections as independents or "nonpartisans." Before the 1986 island-wide elections, many "nonpartisans" grouped together to create Taiwan's first new political party, the Democratic Progressive Party (DPP). Despite the official ban on forming new political parties, Taiwan authorities did not prohibit the DPP from operating, and in the 1986 island-wide elections, DPP and independent candidates captured more than 20% of the vote. In 1987, President Chiang Ching-kuo lifted the emergency decree, which had been in place since 1948 and which had granted virtually unlimited powers to the President for use in the anti-communist campaign. This decree provided the basis for nearly four decades of martial law under which individuals and groups expressing dissenting views were dealt with harshly. Expressing views contrary to the authorities' claim to represent all of China or supporting independent legal status for Taiwan was treated as sedition. Since ending martial law, Taiwan has taken dramatic steps to improve respect for human rights and create a democratic political system. Almost all restrictions on the press have ended, restrictions on personal freedoms have been relaxed, and the prohibition against organizing new political parties has been lifted. Lee Teng-hui succeeded Chiang Ching-kuo as President when Chiang died on January 13, 1988. The Civic Organizations Law passed in 1989 allowed for the formation of new political parties, thereby legalizing the DPP, and its support and influence increased. Lee was elected by the National Assembly to a 6-year term in 1990, marking the final time a President was elected by the National Assembly. In the 1992 Legislative Yuan elections, the DPP won 51 seats in the 161-seat body. While this was only half the number of KMT seats, it made the DPP's voice an important factor in legislative decisions. Winning the Taipei mayor's position in December 1994 significantly enhanced the DPP's image. The DPP continued its strong showing in the 1995 LY race, winning 45 of the 157 seats to the KMT's 81. In 1996, Lee Teng-hui was elected President and Lien Chan Vice President in the first direct election by Taiwan voters. In the November 1997 local elections, the Democratic Progressive Party (DPP) won 12 of the 23 county magistrate and city mayor contests to the Kuomintang (KMT)'s 8, outpolling the KMT for the first time in a major election. In the 2001 LY elections, the DPP won a plurality of seats for the first time. In March 2000, DPP candidate Chen Shui-bian became the first opposition party candidate to win the presidency. His victory resulted in the first-ever transition of the presidential office from one political party to another, validating Taiwan's democratic political system. In a hotly contested election on March 20, 2004, President Chen Shui-bian was re-elected by 50.1% of the popular vote to a second term. The election was marred by a shooting incident the day before the election during which President Chen and his running mate Vice President Annette Lu were slightly wounded. While the opposition contested the results, it was the first time that the DPP had won an outright majority in an island-wide election. The March election also included a "defensive referendum." Historically, the issue of referenda has been closely tied to the question of Taiwan independence, and thus has been a sensitive issue in cross Strait relations. There were two referenda before the voters on March 20. The first asked in light of the P.R.C. missile threat whether Taiwan should purchase anti-missile systems. The second asked whether Taiwan should adopt a "peace framework" for addressing cross Strait differences with the P.R.C. However both referenda failed to obtain support from over 50% of registered voters, as required to be valid. President Chen Shui-bian has called for major constitutional reforms by 2006 aimed at further reducing layers of government, and making other structural changes aimed at improving governance. The People's Republic of China has accused Chen of using the constitution issue to move Taiwan towards independence. He expressed opposition, however, in his May 20, 2004 inaugural address to using constitutional reform to alter the constitution's definition of Taiwan sovereignty. The final National Assembly passed a set of constitutional amendments on June 7, 2005 that will halve the number of LY seats from 225 to 113 and create single-member legislative election districts. The revisions also abolished the National Assembly and provided for the public to confirm or reject future constitutional amendments passed by the LY. President Chen has called for "Round Two" of constitutional revision focusing on the form of government (presidential or parliamentary, 5-branch or 3-branch) and on human, labor, and aborigine rights. He has pledged not to include independence or name change in his proposed constitutional revisions. In the December 2004 Legislative election, the ruling DPP won a plurality with 89 of the 225 seats, gaining 2 seats more than it did in 2001. The opposition KMT won 79 seats, or 11 more than it did in 2001. The KMT's coalition partner, the PFP, won only 34, 12 fewer than it won in 2001, while the DPP's partner, TSU won 12 seats. The New Party won one seat. The ruling coalition's inability to secure a majority has left the LY in virtual gridlock since the election. The KMT won a landslide victory in December 2005 local elections, winning 14 of the 23 city mayor and county magistrate races to the ruling DPP's 6. Political Parties The People's First Party (PFP) was formed in the wake of the March 2000 presidential election, composed of former KMT members who supported former KMT Taiwan Provincial Governor James Soong's presidential bid. PFP and KMT subsequently formed the "Pan-Blue" Alliance to oppose the DPP government. Former KMT President Lee Teng-hui, in turn, broke with the KMT and formed the pro-independence Taiwan Solidarity Union (TSU) in 2001. The TSU, which advocates changing Taiwan's official name and completely replacing the 1947 constitution, allied itself with the DPP as part of the ruling "Pan-Green" alliance. Taiwan and the Mainland The development of semiofficial cross-Strait relations has been halting. Prior to April 1993, when talks were held in Singapore between the heads of two private intermediary organizations--Taiwan's Straits Exchange Foundation (SEF) and the P.R.C.'s Association for Relations Across the Taiwan Strait (ARATS)--there had been some lower-level exchanges between the two sides of the Strait. The April 1993 SEF-ARATS talks primarily addressed technical issues relating to cross-Strait interactions. Lower-level talks continued on a fairly regular basis until they were suspended by Beijing in 1995 after President Lee's U.S. visit. Unofficial exchanges resumed in 1997 through informal meetings between personnel of the two sides' unofficial representative organizations. Direct SEF-ARATS contacts resumed in April 1998, and the SEF Chairman visited the mainland in October 1998. A planned visit by ARATS Chairman Wang Daohan to Taiwan in the fall, however, was postponed following statements made by then-President Lee Teng-hui that relations between the P.R.C. and Taiwan should be conducted as "state-to-state" or at least as "special state-to-state relations." Since his May 20, 2000 inauguration, President Chen has called for resuming the cross-Strait dialogue without any preconditions. President Chen has stated that such talks should be conducted in the spirit of the 1992 Hong Kong talks, a reference to a meeting the two sides held to discuss how to handle political barriers to cross-Strait interaction. The P.R.C. has responded that the Chen administration must acknowledge that the two sides reached a consensus that there is only "one China" before any dialogue can be restarted. In his May 20, 2004 inaugural address, President Chen recognized the P.R.C.'s insistence on "one China" but stopped short of endorsing the concept. He called for a new "Cross-Strait Framework for Peace and Stability" and enhanced political, economic, and social exchanges between the two sides. In the face of the "one China" recognition obstacle and Taiwan's resentment over the P.R.C.'s March 2005 "Anti-Secession Law," Taipei and Beijing have been cautiously feeling each other out on a series of smaller, intermediary steps, including cross-Strait cargo and passenger charter flights, sale of Taiwan agricultural products in the P.R.C., and P.R.C. tourists visiting Taiwan. The United States has welcomed and encouraged the cross-Strait dialogue as a process which contributes to a reduction of tension and to an environment conducive to the eventual peaceful resolution of the outstanding differences between the two sides. The United States believes that differences between Taipei and Beijing should be resolved by the people on both sides of the Strait themselves. The United States has consistently stated that its abiding interest is that the process be peaceful. ECONOMY Foreign Trade Taiwan firms are the world's largest supplier of computer monitors and leaders in PC manufacturing. Textile production, though of declining importance as Taiwan loses its competitive advantage in labor-intensive markets, is another major industrial export sector. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports coal, oil and gas to meet most of its energy needs. Reflecting the large Taiwan investment in the mainland, China supplanted the United States as Taiwan's largest trade partner in 2003. In 2004, China (including Hong Kong) accounted for over 23% of Taiwan's total trade and almost 37% of Taiwan's exports. Japan was Taiwan's second largest trading partner with 15% of total trade, including 26% of Taiwan's imports. The U.S. is now Taiwan's third-largest trade partner, taking 16% of Taiwan's exports and supplying 13% of its imports. Taiwan is the United States' eighth-largest trading partner; Taiwan's two-way trade with the United States amounted to $49 billion in 2003 and rose 15% to $56 billion in 2004. Imports from the United States consist mostly of agricultural and industrial raw materials. Exports to the United States are mainly electronics and consumer goods. The United States, Hong Kong, the P.R.C. and Japan account for nearly 61% of Taiwan's exports, and the United States and Japan provide almost 40% of Taiwan's imports. As Taiwan's per capita income level has risen, demand for imported, high-quality consumer goods has increased. The U.S. trade deficit with Taiwan in 2003 was $14 billion and fell slightly to $13 billion in 2004. The lack of formal diplomatic relations with all but 24 of its trading partners appears not to have seriously hindered Taiwan's rapidly expanding commerce, but has made free trade agreements extremely difficult to pursue. Taiwan maintains trade offices in more than 96 countries with which it does not have official relations. Taiwan is a member of the Asian Development Bank, the WTO, and the Asia-Pacific Economic Cooperation (APEC) forum. Taiwan is also an observer at the OECD. These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy. Agriculture Economic Outlook DEFENSE Taiwan's armed forces are equipped with weapons obtained primarily from the United States. In recent years, however, Taiwan also has procured some weapons from other Western nations and has stressed military "self-reliance," which has resulted in the growth of indigenous military production in certain fields. Taiwan's legislature is currently debating the approval of a special defense budget proposal to purchase defensive systems the U.S. agreed to sell Taiwan in 2001 and earlier. The special budget would provide funds to purchase the Patriot Advanced Capability (PAC-3) missile defense system, P-3C maritime patrol aircraft, and diesel-electric submarines. Taiwan's opposition parties have blocked attempts to pass the special budget on the legislative agenda. These systems would give Taiwan key capabilities in missile defense and anti-submarine warfare to remedy vulnerabilities in countering the P.R.C.'s accelerated military modernization. Taiwan adheres to the principles of the nuclear Non-Proliferation Treaty and has stated that it does not intend to produce nuclear weapons. FOREIGN RELATIONS U.S.-TAIWAN RELATIONS On April 10, 1979, President Carter signed into law the Taiwan Relations Act (TRA), which created domestic legal authority for the conduct of unofficial relations with Taiwan. U.S. commercial, cultural, and other interaction with the people on Taiwan is facilitated through the American Institute in Taiwan (AIT), a private nonprofit corporation. The Institute has its headquarters in the Washington, DC area and has offices in Taipei and Kaohsiung. It is authorized to issue visas, accept passport applications, and provide assistance to U.S. citizens in Taiwan. A counterpart organization, the Taipei Economic and Cultural Representative Office in the United States (TECRO), has been established by the Taiwan authorities. It has its headquarters in Taipei, the representative branch office in Washington, DC, and 11 other Taipei Economic and Cultural Offices (TECO) in the continental U.S. and Guam. The Taiwan Relations Act (TRA) continues to provide the legal basis for the unofficial relationship between the U.S. and Taiwan, and enshrines the U.S. commitment to assisting Taiwan's defensive capability. Following de-recognition, the United States terminated its Mutual Defense Treaty with Taiwan. However, the United States has continued the sale of appropriate defensive military equipment to Taiwan in accordance with the Taiwan Relations Act, which provides for such sales and which declares that peace and stability in the area are in U.S. interests. Sales of defensive military equipment also are consistent with the 1982 U.S.-P.R.C. Joint Communique. In this communique, the United States stated that "it does not seek to carry out a long-term policy of arms sales to Taiwan" and that U.S. arms sales would "not exceed, either in qualitative or in quantitative terms, the level of those supplied in recent years," and that the U.S. intends "gradually to reduce its sale of arms to Taiwan." The P.R.C., in the 1982 communique, stated that its policy was to strive for a peaceful resolution of the Taiwan question. The United States position on Taiwan has been clear and consistent, as reflected in the Three Communique's and the Taiwan Relations Act (TRA). The U.S. "one-China" policy acknowledges that both Taiwan and the Mainland are part of China. The U.S. insists on the peaceful resolution of cross-Strait differences and encourages dialogue to help advance such a resolution. The U.S. does not support Taiwan independence. President Bush clearly stated U.S. policy on December 9, 2003. The United States is opposed to any attempt by either side to unilaterally alter the status quo in the Taiwan Strait. The United States has endorsed dialogue and exchanges between the two sides and has encouraged the P.R.C. to engage the democratically elected leadership of Taiwan. U.S. commercial ties with Taiwan have been maintained and have expanded since 1979. Taiwan continues to enjoy Export-Import Bank financing, Overseas Private Investment Corporation guarantees, normal trade relations (NTR) status, and ready access to U.S. markets. In recent years, AIT commercial dealings with Taiwan have focused on expanding market access for American goods and services. AIT has been engaged in a series of trade negotiations, which have focused on protection of intellectual property rights, market access, and issues relating to Taiwan's accession to the WTO, which occurred in 2002. Maintaining diplomatic relations with the P.R.C. has been recognized to be in the long-term interest of the United States by six consecutive administrations; however, maintaining strong, unofficial relations with Taiwan also is in the U.S. interest. The United States is committed to these efforts because they are important for America's global position and for peace and stability in Asia. In keeping with its one-China policy, while the U.S. does not support Taiwan independence, it does support Taiwan's membership in appropriate international organizations, such as the WTO, APEC forum, and the Asian Development Bank, where statehood is not a requirement for membership. In addition, the U.S. supports appropriate opportunities for Taiwan's voice to be heard in organizations where its membership is not possible. U.S. Representative Offices American Institute in Taiwan American Institute in Taiwan Taiwan Representative Office |
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