An island then of 6 million people, Taiwan was the last refuge to which the Nationalist Kuomintang (KMT) army and government fled after their defeat in the civil war by the Chinese Communist Party in 1949. Today, it is an island state of 24 million that is economically, socially and technically on a par with the world's most advanced economies, and with a GDP per head of 41,500 dollars. It is the world's 20th largest economy.
Population and identity
The large majority of the population are descendants of Han Chinese, who migrated to the island in the centuries before its colonisation by the Japanese Empire at the end of the 19th century. In 1949 some 2 million soldiers and administrators, merchants, bankers and intellectuals associated with the KMT relocated to Taiwan after their defeat. Descendants of the latter represent approximately 12 percent of the current population but remain disproportionately represented in higher offices and ranks.
After the defeat of Japan in 1945 KMT one-party rule in Taiwan was brutal and oppressive. Martial law was imposed a year after the "228 incident" in 1947 when up to 30,000 Taiwanese were massacred in the suppression of a popular revolt against the corruption and brutality of the KMT administration. Martial law was not lifted for over 38 years (until 1987), and was used to suppress all political opposition and workers' organisations. That period was known as the "White Terror". Torture, imprisonment and execution were commonplace. As in the Stalinist states, the official trade unions were de facto extensions of the KMT-dominated state.
The KMT claimed to be the legitimate government of the whole of China, and from the 1950s to the 1990s aimed at replacing the CCP in Beijing. The People's Republic of China in Beijing refused, in turn, to recognise the KMT's Republic of China in Taiwan, and remains officially committed to military unification if there is any formal move to Taiwanese independence.
From the early 1970s the KMT government commenced a state-directed export-led industrialistion strategy, underpinned by political repression and martial law. This transformed Taiwan from a semi-developed to an advanced capitalist economy in 20 years. With Hong Kong, Singapore and South Korea, it became in the last part of the 20th century one of the "Asian Tiger" economies.
National income is highly unequally distributed. Inequality is worsening as a result of stagnant real incomes for most skilled workers, and rising unemployment for the semi-skilled.
As part of an evolving development strategy with an emphasis on hi-tech industry, many firms in labour-intensive industries have been relocated to mainland China in order to reduce labour costs. There are now some 50,000 Taiwanese companies operating in China along with 1 million Taiwanese managerial and technical staff and their families. This process has also increased unemployment on the island.
Democratisation began in the late 1980s, with the recognition of the Democratic Progressive Party. In 2000 and 2004 the DPP candidate was elected president. In 2008 and 2012 the presidency was won by the KMT candidate, Ma Ying-jeou.
The political picture is complicated by the Pan-Green and Pan-Blue coalitions of parties. The former, led by the DPP, favours eventual Taiwanese independence. The latter, led by the KMT, favours eventual unification with China. The island's population is divided between support for the two positions, and on their self-identity as Taiwanese or as Chinese. A poll in 2013 showed 64 percent in favour of the current situation but 71 percent for independence if the status quo was not an option.
Warring capitalist brothers
The rapid economic and technological transformation of Taiwan and the dramatic industrialisation of China have fundamentally altered the political relations between the states. Neither the KMT nor the Chinese Communist Party seek or expect a military reunification, and continued hostility is no longer mutually beneficial. Hence the framework agreement, and the trade agreement (see main article).
For many who have practised elements of democracy in Taiwan for the last 20 years, however, this stabilisation of relations, and the reduction in military tension, looks more like a long-term threat than a promise of peace. Reunification by stealth, and on China's terms, would represent the end of the democratic experiment, the end of the possibility of independent workers' organisations, and the end of a distinctive Taiwanese culture.
See Taiwan: a people reborn by Man-Yun Kao
See also Man-Yun Kao's interviews with Su Beng, Marxist historian and veteran Taiwanese independence fighter, and Lu Chyi-Horng, activist in the National Alliance for Workers of Closed Factories, about the protests against the Trade Agreement.