Taiwan, officially the Republic of China, is a state in East Asia. Neighboring states include the People’s Republic of China (PRC) to the north-west, Japan to the north-east, and the Philippines to the south.
The island of Taiwan has an area of 35,808 square kilometers (13,826 sq mi), with mountain ranges dominating the eastern two-thirds and plains in the western third, where its highly urbanized population is concentrated. Taipei is the capital and largest metropolitan area. Other major cities include Kaohsiung, Taichung, Tainan and Taoyuan. With 23.7 million inhabitants, Taiwan is among the most densely populated states, and is the most populous state and largest economy that is not a member of the United Nations (UN).
Taiwanese indigenous peoples settled the island of Taiwan around 6,000 years ago.
In the 17th century, Dutch rule opened the island to mass Han immigration. After the brief Kingdom of Tungning in parts of the southern and western areas of the island, the island was annexed in 1683 by the Qing dynasty of China, and ceded to the Empire of Japan in 1895. Following the surrender of Japan in 1945, the Republic of China, which had overthrown and succeeded the Qing in 1911, took control of Taiwan on behalf of the World War II Allies. The resumption of the Chinese Civil War led to the loss of the mainland to the Communist Party of China and the flight of the ROC government to Taiwan in 1949. Although the ROC government continued to claim to be the legitimate representative of China, since 1950 its effective jurisdiction has been limited to Taiwan and numerous smaller islands. In the early 1960s, Taiwan entered a period of rapid economic growth and industrialization called the “Taiwan Miracle“. In the late 1980s and early 1990s, the ROC transitioned from a one-party military dictatorship to a multi-party democracy with a semi-presidential system.
Taiwan’s export-oriented industrial economy is the 21st-largest in the world, with major contributions from steel, machinery, electronics and chemicals manufacturing. Taiwan is a developed country, ranking 15th in GDP per capita. It is ranked highly in terms of political and civil liberties, education, health care and human development.
The political status of Taiwan remains uncertain. The ROC is no longer a member of the UN, having been replaced by the PRC in 1971.
Taiwan is claimed by the PRC, which refuses diplomatic relations with countries that recognize the ROC. Taiwan maintains official ties with 14 out of 193 UN member states and the Holy See. International organisations in which the PRC participates either refuse to grant membership to Taiwan or allow it to participate only on a non-state basis. Taiwan is a member of the World Trade Organization, Asia-Pacific Economic Cooperation and Asian Development Bank under various names. Nearby countries and countries with large economies maintain unofficial ties with Taiwan through representative offices and institutions that function as de facto embassies and consulates. Domestically, the major political division is between parties favoring eventual Chinese unification and promoting a Chinese identity contrasted with those aspiring to independence and promoting Taiwanese identity, although both sides have moderated their positions to broaden their appeal.
Various names for the island of Taiwan remain in use today, each derived from explorers or rulers during a particular historical period. The name Formosa (福爾摩沙) dates from 1542, when Portuguese sailors sighted an uncharted island and noted it on their maps as Ilha Formosa (“beautiful island”). The name Formosa eventually “replaced all others in European literature” and remained in common use among English speakers into the 20th century.
In the early 17th century, the Dutch East India Company established a commercial post at Fort Zeelandia (modern-day Anping, Tainan) on a coastal sandbar called “Tayouan”, after their ethnonym for a nearby Taiwanese aboriginal tribe, possibly Taivoan people, written by the Dutch and Portuguese variously as Taiouwang, Tayowan, Teijoan, etc. This name was also adopted into the Chinese vernacular (in particular, Hokkien, as Pe̍h-ōe-jī: Tāi-oân/Tâi-oân) as the name of the sandbar and nearby area (Tainan). The modern word “Taiwan” is derived from this usage, which is seen in various forms (大員, 大圓, 大灣, 臺員, 臺圓 and 臺窩灣) in Chinese historical records. The area occupied by modern-day Tainan represented the first permanent settlement by both European colonists and Chinese immigrants. The settlement grew to be the island’s most important trading center and served as its capital until 1887.
Use of the current Chinese name (臺灣) became official as early as 1684 with the establishment of Taiwan Prefecture. Through its rapid development the entire Formosan mainland eventually became known as “Taiwan”.
Over subsequent decades, the Republic of China has become commonly known as “Taiwan”, after the island that comprises 99% of the territory under its control. In some contexts, especially ROC government publications, the name is written as “Republic of China (Taiwan)”, “Republic of China/Taiwan”, or sometimes “Taiwan (ROC)”.
The Republic of China participates in most international forums and organizations under the name “Chinese Taipei” due to diplomatic pressure from the People’s Republic of China. For instance, it is the name under which it has competed at the Olympic Games since 1984, and its name as an observer at the World Health Organization.
Taiwan was joined to the mainland in the Late Pleistocene, until sea levels rose about 10,000 years ago. Fragmentary human remains dated 20,000 to 30,000 years ago have been found on the island, as well as later artifacts of a paleolithic culture.
Around 6,000 years ago, Taiwan was settled by farmers, most likely from mainland China. They are believed to be the ancestors of today’s Taiwanese aborigines, whose languages belong to the Austronesian language family, but show much greater diversity than the rest of the family, which spans a huge area from Maritime Southeast Asia west to Madagascar and east as far as New Zealand, Hawaii and Easter Island. This has led linguists to propose Taiwan as the urheimat of the family, from which seafaring peoples dispersed across Southeast Asia and the Pacific and Indian Oceans.
Han Chinese fishermen began settling in the Penghu islands in the 13th century. Hostile tribes, and a lack of valuable trade products, meant that few outsiders visited the main island until the 16th century. During the 16th century, visits to the coast by fishermen and traders from Fujian, as well as Chinese and Japanese pirates, became more frequent. The Kingdom of Middag that existed from before the Portuguese and Spanish colonial period was a supra-tribal alliance located in the central western plains of Taiwan that was brutally conquered by Qing troops and collaborative indigenous communities in 1732.
The Dutch East India Company attempted to establish a trading outpost on the Penghu Islands (Pescadores) in 1622, but were driven off by Ming forces. In 1624, the company established a stronghold called Fort Zeelandia on the coastal islet of Tayouan, which is now part of the main island at Anping, Tainan. When the Dutch arrived, they found southwestern Taiwan already frequented by a mostly-transient Chinese population numbering close to 1,500. David Wright, a Scottish agent of the company who lived on the island in the 1650s, described the lowland areas of the island as being divided among 11 chiefdoms ranging in size from two settlements to 72. Some of these fell under Dutch control, while others remained independent. The Company began to import laborers from Fujian and Penghu, many of whom settled.
In 1626, the Spanish Empire landed on and occupied northern Taiwan, at the ports of Keelung and Tamsui, as a base to extend their trading. This colony lasted 16 years until 1642, when the last Spanish fortress fell to Dutch forces.
Following the fall of the Ming dynasty, Koxinga (Zheng Chenggong), a self-styled Ming loyalist, arrived on the island and captured Fort Zeelandia in 1662, expelling the Dutch Empire and military from the island. Koxinga established the Kingdom of Tungning (1662–1683), with his capital at Tainan. He and his heirs, Zheng Jing, who ruled from 1662 to 1682, and Zheng Keshuang, who ruled less than a year, continued to launch raids on the southeast coast of mainland China well into the Qing dynasty era.
In 1683, following the defeat of Koxinga’s grandson by an armada led by Admiral Shi Lang of southern Fujian, the Qing dynasty formally annexed Taiwan, placing it under the jurisdiction of Fujian province. The Qing imperial government tried to reduce piracy and vagrancy in the area, issuing a series of edicts to manage immigration and respect aboriginal land rights. Immigrants mostly from southern Fujian continued to enter Taiwan. The border between taxpaying lands and what was considered “savage” lands shifted eastward, with some aborigines becoming sinicized while others retreated into the mountains. During this time, there were a number of conflicts between different ethnic groups of Han Chinese, Quanzhou Minnanese feuding with Zhangzhou and Hakkas peasants, and major clan fights between Minnans (Hoklos), Hakkas and aborigines too.
Northern Taiwan and the Penghu Islands were the scene of subsidiary campaigns in the Sino-French War (August 1884 to April 1885). The French occupied Keelung on 1 October 1884, but were repulsed from Tamsui a few days later. The French won some tactical victories but were unable to exploit them, and the Keelung Campaign ended in stalemate. The Pescadores Campaign, beginning on 31 March 1885, was a French victory, but had no long-term consequences. The French evacuated both Keelung and the Penghu archipelago after the end of the war.
In 1887, the Qing upgraded the island’s administration from being the Taiwan Prefecture of Fujian Province to Fujian-Taiwan-Province, the twentieth in the empire, with its capital at Taipei. This was accompanied by a modernization drive that included building China’s first railway.
As the Qing dynasty was defeated in the First Sino-Japanese War (1894–1895), Taiwan, along with Penghu and Liaodong Peninsula, were ceded in full sovereignty to the Empire of Japan by the Treaty of Shimonoseki. Inhabitants on Taiwan and Penghu wishing to remain Qing subjects were given a two-year grace period to sell their property and move to mainland China. Very few Taiwanese saw this as feasible. On 25 May 1895, a group of pro-Qing high officials proclaimed the Republic of Formosa to resist impending Japanese rule. Japanese forces entered the capital at Tainan and quelled this resistance on 21 October 1895. Guerrilla fighting continued periodically until about 1902 and ultimately took the lives of 14,000 Taiwanese, or 0.5% of the population. Several subsequent rebellions against the Japanese (the Beipu uprising of 1907, the Tapani incident of 1915, and the Musha incident of 1930) were all unsuccessful but demonstrated opposition to Japanese colonial rule.
Japanese colonial rule was instrumental in the industrialization of the island, extending the railways and other transport networks, building an extensive sanitation system, and establishing a formal education system in Taiwan. Japanese rule ended the practice of headhunting. During this period the human and natural resources of Taiwan were used to aid the development of Japan and the production of cash crops such as rice and sugar greatly increased. By 1939, Taiwan was the seventh greatest sugar producer in the world. Still, the Taiwanese and aborigines were classified as second- and third-class citizens. After suppressing Chinese guerrillas in the first decade of their rule, Japanese authorities engaged in a series of bloody campaigns against the mountain aboriginals, culminating in the Musha Incident of 1930. Intellectuals and laborers who participated in left-wing movements within Taiwan were also arrested and massacred (e.g. Chiang Wei-shui (蔣渭水) and Masanosuke Watanabe (渡辺政之輔)).
Around 1935, the Japanese began an island-wide assimilation project to bind the island more firmly to the Japanese Empire and people were taught to see themselves as Japanese under the Kominka Movement, during which time Taiwanese culture and religion were outlawed and the citizens were encouraged to adopt Japanese surnames. By 1938, 309,000 Japanese settlers resided in Taiwan.
Taiwan held strategic wartime importance as Imperial Japanese military campaigns first expanded and then contracted over the course of World War II. The “South Strike Group” was based at the Taihoku Imperial University in Taipei. During World War II, tens of thousands of Taiwanese served in the Japanese military. Over 2,000 women, euphemistically called “comfort women“, were forced into sexual slavery for Imperial Japanese troops.
The Imperial Japanese Navy operated heavily out of Taiwanese ports. In October 1944 the Formosa Air Battle was fought between American carriers and Japanese forces based in Taiwan. Important Japanese military bases and industrial centers throughout Taiwan, such as Kaohsiung and Keelung, were targets of heavy raids by American bombers.
After Japan’s surrender ended World War II, most of Taiwan’s approximately 300,000 Japanese residents were expelled and sent to Japan.
Republic of China Rule:
While Taiwan was still under Japanese rule, the Republic of China was founded on the mainland on 1 January 1912, following the Xinhai Revolution, which began with the Wuchang uprising on 10 October 1911, replacing the Qing dynasty and ending over two thousand years of imperial rule in China. From its founding until 1949 it was based in mainland China. Central authority waxed and waned in response to warlordism (1915–28), Japanese invasion (1937–45), and the Chinese Civil War (1927–50), with central authority strongest during the Nanjing decade (1927–37), when most of China came under the control of the Kuomintang (KMT) under an authoritarian one-party state.
After the Surrender of Japan on 25 October 1945, the US Navy ferried ROC troops to Taiwan to accept the formal surrender of Japanese military forces in Taipei on behalf of the Allied Powers, as part of General Order No. 1 for temporary military occupation. General Rikichi Andō, governor-general of Taiwan and commander-in-chief of all Japanese forces on the island, signed the receipt and handed it over to General Chen Yi of the ROC military to complete the official turnover. Chen Yi proclaimed that day to be “Taiwan Retrocession Day“, but the Allies considered Taiwan and the Penghu Islands to be under military occupation and still under Japanese sovereignty until 1952, when the Treaty of San Francisco took effect. Although the 1943 Cairo Declaration had envisaged returning these territories to China, it had no legal status as treaty, and also in the Treaty of San Francisco and Treaty of Taipei Japan renounced all claim to them without specifying to what country they were to be surrendered. This introduced the disputed sovereignty status of Taiwan and whether the ROC has sovereignty over Taiwan or only remaining over Kinmen and Matsu Islands.
The ROC administration of Taiwan under Chen Yi was strained by increasing tensions between Taiwanese-born people and newly arrived mainlanders, which were compounded by economic woes, such as hyperinflation. Furthermore, cultural and linguistic conflicts between the two groups quickly led to the loss of popular support for the new government, while the mass movement led by the working committee of the Communist Party also aimed to bring down the Kuomintang government. The shooting of a civilian on 28 February 1947 triggered island-wide unrest, which was suppressed with military force in what is now called the February 28 Incident. Mainstream estimates of the number killed range from 18,000 to 30,000. Those killed were mainly members of the Taiwanese elite.
After the end of World War II, the Chinese Civil War resumed between the Chinese Nationalists (Kuomintang), led by Chiang Kai-shek, and the Communist Party of China, led by Mao Zedong. Throughout the months of 1949, a series of Chinese Communist offensives led to the capture of its capital Nanjing on 23 April and the subsequent defeat of the Nationalist army on the mainland, and the Communists founded the People’s Republic of China on 1 October.
On 7 December 1949, after the loss of four capitals, Chiang evacuated his Nationalist government to Taiwan and made Taipei the temporary capital of the ROC (also called the “wartime capital” by Chiang Kai–shek). Some 2 million people, consisting mainly of soldiers, members of the ruling Kuomintang and intellectual and business elites, were evacuated from mainland China to Taiwan at that time, adding to the earlier population of approximately six million. In addition, the ROC government took to Taipei many national treasures and much of China’s gold reserves and foreign currency reserves.
After losing most of the mainland, the Kuomintang remained in control of Tibet, portions of Qinghai, Xinjiang, and Yunnan along with Hainan Island until 1951 when the Communists subsequently captured these territories too. From this point onward, the Kuomintang’s territory was reduced to the island of Taiwan, Penghu, Kinmen and Matsu Islands (Fujian Province), and two major islands of the Dongsha and Nansha island groups. The Kuomintang continued to claim sovereignty over all of “China”, which it defined to include mainland China, Taiwan, Outer Mongolia and other areas. On mainland China, the victorious Communists claimed they ruled the sole and only China (which they claimed included Taiwan) and that the Republic of China no longer existed.
Chinese Nationalist One-Party Rule:
Martial law, declared on Taiwan in May 1949, continued to be in effect after the central government relocated to Taiwan. It was not repealed until 1987, and was used as a way to suppress the political opposition in the intervening years. During the White Terror, as the period is known, 140,000 people were imprisoned or executed for being perceived as anti-KMT or pro-Communist. Many citizens were arrested, tortured, imprisoned and executed for their real or perceived link to the Communists. Since these people were mainly from the intellectual and social elite, an entire generation of political and social leaders was decimated. In 1998, a law was passed to create the “Compensation Foundation for Improper Verdicts” which oversaw compensation to White Terror victims and families. President Ma Ying-jeou made an official apology in 2008, expressing hope that there would never be a tragedy similar to White Terror.
Initially, the United States abandoned the KMT and expected that Taiwan would fall to the Communists. However, in 1950 the conflict between North Korea and South Korea, which had been ongoing since the Japanese withdrawal in 1945, escalated into full-blown war, and in the context of the Cold War, US President Harry S. Truman intervened again and dispatched the US Navy’s 7th Fleet into the Taiwan Strait to prevent hostilities between Taiwan and mainland China. In the Treaty of San Francisco and the Treaty of Taipei, which came into force respectively on 28 April 1952 and 5 August 1952, Japan formally renounced all right, claim and title to Taiwan and Penghu, and renounced all treaties signed with China before 1942. Neither treaty specified to whom sovereignty over the islands should be transferred, because the United States and the United Kingdom disagreed on whether the ROC or the PRC was the legitimate government of China. Continuing conflict of the Chinese Civil War through the 1950s, and intervention by the United States notably resulted in legislation such as the Sino-American Mutual Defense Treaty and the Formosa Resolution of 1955.
As the Chinese Civil War continued without truce, the government built up military fortifications throughout Taiwan. Within this effort, KMT veterans built the now famous Central Cross-Island Highway through the Taroko Gorge in the 1950s. The two sides would continue to engage in sporadic military clashes with seldom publicized details well into the 1960s on the China coastal islands with an unknown number of night raids. During the Second Taiwan Strait Crisis in September 1958, Taiwan’s landscape saw Nike-Hercules missile batteries added, with the formation of the 1st Missile Battalion Chinese Army that would not be deactivated until 1997. Newer generations of missile batteries have since replaced the Nike Hercules systems throughout the island.
During the 1960s and 1970s, the ROC maintained an authoritarian, single-party government while its economy became industrialized and technology-oriented. This rapid economic growth, known as the Taiwan Miracle, was the result of a fiscal regime independent from mainland China and backed up, among others, by the support of US funds and demand for Taiwanese products. In the 1970s, Taiwan was economically the second fastest growing state in Asia after Japan. Taiwan, along with Hong Kong, South Korea and Singapore, became known as one of the Four Asian Tigers. Because of the Cold War, most Western nations and the United Nations regarded the ROC as the sole legitimate government of China until the 1970s. Later, especially after the termination of the Sino-American Mutual Defense Treaty, most nations switched diplomatic recognition to the PRC (see United Nations General Assembly Resolution 2758).
Until the 1970s the government was regarded by Western critics as undemocratic for upholding martial law, for severely repressing any political opposition, and for controlling media. The KMT did not allow the creation of new parties and those that existed did not seriously compete with the KMT. Thus, competitive democratic elections did not exist. From the late 1970s to the 1990s, however, Taiwan went through reforms and social changes that transformed it from an authoritarian state to a democracy. In 1979, a pro-democracy protest known as the Kaohsiung Incident took place in Kaohsiung to celebrate Human Rights Day. Although the protest was rapidly crushed by the authorities, it is today considered as the main event that united Taiwan’s opposition.
Chiang Ching-kuo, Chiang Kai-shek’s son and successor as the president, began reforms to the political system in the mid-1980s. In 1984, the younger Chiang selected Lee Teng-hui, a Taiwanese-born, US-educated technocrat, to be his vice-president. In 1986, the Democratic Progressive Party (DPP) was formed and inaugurated as the first opposition party in the ROC to counter the KMT. A year later, Chiang Ching-kuo lifted martial law on the main island of Taiwan (martial law was lifted on Penghu in 1979, Matsu island in 1992 and Kinmen island in 1993). With the advent of democratization, the issue of the political status of Taiwan gradually resurfaced as a controversial issue where, previously, the discussion of anything other than unification under the ROC was taboo.
After the death of Chiang Ching-kuo in January 1988, Lee Teng-hui succeeded him and became the first Taiwan-born president. Lee continued the democratic reforms to the government and decrease the concentration of government authority in the hands of mainland Chinese. Under Lee, Taiwan underwent a process of localization in which Taiwanese culture and history were promoted over a pan-China viewpoint in contrast to earlier KMT policies which had promoted a Chinese identity. Lee’s reforms included printing banknotes from the Central Bank rather than the Provincial Bank of Taiwan, and streamlining the Taiwan Provincial Government with most of its functions transferred to the Executive Yuan. Under Lee, the original members of the Legislative Yuan and National Assembly (a former supreme legislative body defunct in 2005), elected in 1947 to represent mainland Chinese constituencies and having held the seats without re-election for more than four decades, were forced to resign in 1991. The previously nominal representation in the Legislative Yuan was brought to an end, reflecting the reality that the ROC had no jurisdiction over mainland China, and vice versa. Restrictions on the use of Taiwanese Hokkien in the broadcast media and in schools were also lifted.
Democratic reforms continued in the 1990s, with Lee Teng-hui re-elected in 1996, in the first direct presidential election in the history of the ROC. During the later years of Lee’s administration, he was involved in corruption controversies relating to government release of land and weapons purchase, although no legal proceedings commenced. In 1997,”To meet the requisites of the nation prior to national unification”, the Additional Articles of the Constitution of the Republic of China was passed and then the former “constitution of five powers” turns to be more tripartite. In 2000, Chen Shui-bian of the Democratic Progressive Party was elected as the first non-Kuomintang (KMT) President and was re-elected to serve his second and last term since 2004. Polarized politics emerged in Taiwan with the formation of the Pan-Blue Coalition, led by the KMT, and the Pan-Green Coalition, led by the DPP. The former favors eventual Chinese unification, while the latter favors Taiwanese independence. In early 2006, President Chen Shui-bian remarked: “The National Unification Council will cease to function. No budget will be ear-marked for it and its personnel must return to their original posts…The National Unification Guidelines will cease to apply.”
On 30 September 2007, the ruling DPP approved a resolution asserting a separate identity from China and called for the enactment of a new constitution for a “normal country”. It also called for general use of “Taiwan” as the country’s name, without abolishing its formal name, the Republic of China. The Chen administration also pushed for referendums on cross-Strait relations in 2004 and UN entry in 2008, both of which held on the same day as the presidential election. They both failed due to voter turnout below the required legal threshold of 50% of all registered voters. The Chen administration was dogged by public concerns over reduced economic growth, legislative gridlock due to a pan-blue, opposition-controlled Legislative Yuan and corruption involving the First Family as well as government officials.
The KMT increased its majority in the Legislative Yuan in the January 2008 legislative elections, while its nominee Ma Ying-jeou went on to win the presidency in March of the same year, campaigning on a platform of increased economic growth and better ties with the PRC under a policy of “mutual nondenial“. Ma took office on 20 May 2008, the same day that President Chen Shui-bian stepped down and was notified by prosecutors of possible corruption charges. Part of the rationale for campaigning for closer economic ties with the PRC stems from the strong economic growth China attained since joining the World Trade Organization. However, some analysts said that despite the election of Ma Ying-jeou, the diplomatic and military tensions with the PRC had not been reduced.
In 2016, Tsai Ing-wen of the Democratic Progressive Party (DPP) became President of Taiwan. President Tsai called upon the international community to help Taiwan to preserve its democracy despite the threatening language used against Taiwan by Xi Jinping, General Secretary of the Communist Party of China (PRC paramount leader). President Tsai called upon the PRC to democratize, respect human rights, and renounce the use of military force against Taiwan.
On 24 May 2017, the Constitutional Court ruled that then-current marriage laws had been violating the Constitution by denying Taiwanese same-sex couples the right to marry. The Court ruled that if the Legislative Yuan did not pass adequate amendments to Taiwanese marriage laws within two years, same-sex marriages would automatically become lawful in Taiwan. On 17 May 2019, Taiwan’s parliament approved a bill legalizing same-sex marriage, making it the first in Asia to do so.
Taiwan is an island state in East Asia. The main island, known historically as Formosa, makes up 99% of the area controlled by the ROC, measuring 35,808 square kilometers (13,826 sq mi) and lying some 180 kilometers (112 mi) across the Taiwan Strait from the southeastern coast of mainland China. The East China Sea lies to its north, the Philippine Sea to its east, the Luzon Strait directly to its south and the South China Sea to its southwest. Smaller islands include a number in the Taiwan Strait including the Penghu archipelago, the Kinmen and Matsu Islands near the Chinese coast, and some of the South China Sea Islands.
The main island is a tilted fault block, characterized by the contrast between the eastern two-thirds, consisting mostly of five rugged mountain ranges parallel to the east coast, and the flat to gently rolling plains of the western third, where the majority of Taiwan’s population reside. There are several peaks over 3,500 m, the highest being Yu Shan at 3,952 m (12,966 ft), making Taiwan the world’s fourth-highest island. The tectonic boundary that formed these ranges is still active, and the island experiences many earthquakes, a few of them highly destructive. There are also many active submarine volcanoes in the Taiwan Straits.
The eastern mountains are heavily forested and home to a diverse range of wildlife, while land use in the western and northern lowlands is intensive.
The quick industrialization and rapid growth of Taiwan during the latter half of the 20th century has been called the “Taiwan Miracle“. Taiwan is one of the “Four Asian Tigers” alongside Hong Kong, South Korea and Singapore.
Japanese rule prior to and during World War II brought changes in the public and private sectors, most notably in the area of public works, which enabled rapid communications and facilitated transport throughout much of the island. The Japanese also improved public education and made it compulsory for all residents of Taiwan. By 1945, hyperinflation was in progress in mainland China and Taiwan as a result of the war with Japan. To isolate Taiwan from it, the Nationalist government created a new currency area for the island, and began a price stabilization programme. These efforts significantly slowed inflation.
When the KMT government fled to Taiwan it brought millions of taels (where 1 tael = 37.5 g or ~1.2 ozt) of gold and the foreign currency reserve of mainland China, which, according to the KMT, stabilized prices and reduced hyperinflation. Perhaps more importantly, as part of its retreat to Taiwan, the KMT brought the intellectual and business elites from mainland China. The KMT government instituted many laws and land reforms that it had never effectively enacted on mainland China. The government also implemented a policy of import-substitution, attempting to produce imported goods domestically.
In 1950, with the outbreak of the Korean War, the United States began an aid program which resulted in fully stabilized prices by 1952. Economic development was encouraged by American economic aid and programs such as the Joint Commission on Rural Reconstruction, which turned the agricultural sector into the basis for later growth. Under the combined stimulus of the land reform and the agricultural development programs, agricultural production increased at an average annual rate of 4 per cent from 1952 to 1959, which was greater than the population growth, 3.6%.
In 1974, Chiang Ching-kuo implemented the Ten Major Construction Projects, the beginning foundations that helped Taiwan transform into its current export driven economy. Since the 1990s, a number of Taiwan-based technology firms have expanded their reach around the world. Well-known international technology companies headquartered in Taiwan include personal computer manufacturers Acer Inc. and Asus, mobile phone maker HTC, as well as electronics manufacturing giant Foxconn, which makes products for Apple, Amazon, and Microsoft. Computex Taipei is a major computer expo, held since 1981.
Today Taiwan has a dynamic, capitalist, export-driven economy with gradually decreasing state involvement in investment and foreign trade. 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 fifth largest. The currency of Taiwan is the New Taiwan dollar.
Since the beginning of the 1990s, the economic ties between Taiwan and the People’s Republic of China have been very prolific. As of 2008, more than US$150 billion have been invested in the PRC by Taiwanese companies, and about 10% of the Taiwanese labor force works in the PRC, often to run their own businesses. Although the economy of Taiwan benefits from this situation, some have expressed the view that the island has become increasingly dependent on the mainland Chinese economy. A 2008 white paper by the Department of Industrial Technology states that “Taiwan should seek to maintain stable relation with China while continuing to protect national security, and avoiding excessive ‘Sinicization’ of Taiwanese economy.” Others argue that close economic ties between Taiwan and mainland China would make any military intervention by the PLA against Taiwan very costly, and therefore less probable.
Civilian transport in Taiwan is characterized by extensive use of scooters. In March 2019, 13.86 million were registered, twice that of cars.
Both highways and railways are concentrated near the coasts where the majority of the population resides, with 1,619 km (1,006 mi) of motorway.
Railways in Taiwan are primarily used for passenger services, with Taiwan Railway Administration (TRA) operating a circular route and Taiwan High Speed Rail (THSR) running high speed services on the west coast. Urban transit systems include Taipei Metro, Kaohsiung Rapid Transit Taoyuan Metro and New Taipei Metro.
Flag of the Republic of China:
The flag of the Republic of China (commonly known as the Blue Sky, White Sun, and a Wholly Red Earth) consists of a red field with a blue canton bearing a white disc with twelve triangles surrounding it. The disc and triangles symbolize the sun and rays of light emanating from it respectively.
It was first used in mainland China as the Navy flag in 1912, and was made the official national flag of the Republic of China (ROC) in 1928 by the Kuomintang (KMT). It was enshrined in the sixth article of the Constitution of the Republic of China when it was promulgated in 1947. The flag is no longer officially used in mainland China, as the People’s Republic of China was founded in 1949.
As the islands of Taiwan and Penghu were under Japanese rule until 1945, the flag was not in use in two territories, until ROC took control in 1945. The flag is now mostly used within Taiwan, Penghu, Kinmen, Matsu and other outlying islands, where the ROC relocated to in 1949 after its defeat in the Chinese Civil War.
The twelve rays of the white Sun symbolize the twelve months and the twelve traditional shichen (時辰; shíchén), a traditional unit of time which corresponds to two modern hours. Sun Yat-sen added the “Red Earth” to the flag to signify the blood of the revolutionaries who sacrificed themselves in order to overthrow the Qing Dynasty and create the ROC. Together, the three colors of the flag correspond to the Three Principles of the People: Blue represents nationalism and liberty; White represents democracy and equality; and Red represents the people’s livelihood and fraternity. President Chiang Kai-shek proclaimed on the National Day in 1929, “As long as a national flag with Blue Sky, White Sun, and a Wholly Red Earth flies on the land of China, it symbolizes the independence and liberty of the descendants of the Huang Emperor”.