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Following on from Part 2, we now have the People’s Republic of China ruling over mainland China as of 1st October 1949. Prior to this, the then ruling party, the Republic of China (ROC) established the Taiwan Provincial Government in September 1945 and proclaimed on October 25, 1945 as "Taiwan Retrocession Day." This is the day in which the Japanese troops surrendered. A day that was hotly debated as being invalid.

Before the start of WWII, there were around 309,000 Japanese living in Taiwan. By 25th April 1946, about 90% of those Japanese had been repatriated back to Japan. In the immediate post-war period, the KMT conducted a very repressive and corrupt administration of Taiwan with bloody consequences. This was prior to Chiang Kai-shek relocating his Nationalist government to Taipei in 1949 and the start of Martial Law in Taiwan.

In post-war Taiwan and China, severe inflation was the results of many things including corruption so the KMT embarked on a program of drastic economic overhaul including nationalisation of 17% of the GDP. It also involved taking over much of the Japanese infrastructure.

The Kuomintang government also moved the entire gold reserve from the Chinese mainland to Taiwan,[91] and used this reserve to back the newly issued New Taiwan dollar to stabilize the new currency and put a stop to hyperinflation. AT that time the reserves amounted to well over 100 tons of gold! Taiwan also benefited for years from foreign aid especially from the US. This ensured a rapid economic recovery after WWII.

We are all aware of the economic success and strength of Taiwan today so it is interesting to look how this all started. The KMT authorities implemented a far-reaching and highly successful land reform program on Taiwan during the 1950s. The 375 Rent Reduction Act alleviated tax burden on peasants and another act 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 businessmen who fled from mainland China, they once again revived Taiwan's prosperity previously ceased along with Japanese withdrawal and managed Taiwan's transition from an agricultural to a commercial, industrial economy.

Chiang Kai-shek died in April 1975, and was succeeded to the presidency by Yen Chia-kan while his son Chiang Ching-kuo succeeded to the leadership of the Kuomintang as Chairman. Chiang Ching-kuo amongst other things allowed opposition political parties to exist even when still technically illegal. The Democratic Progressive Party (DPP) was established in 1986.

On the 15th July 1987, President Chiang ended marshal law and Taiwan’s path to democracy began. President Chiang Ching Quo did not live to see the huge advances – he died on 13th January 1988.

The first democratic election in Taiwan was held in 1996. The KMT retained control but as an government elected by the people. Their reign came to an end though in 2000 when the DPP won office and the new President Chen Shui-bian took over. He won again in 2004.

Of note during this term in 2007, was Chen’s proposed policy of Four Wants and One Without, which in substance states that Taiwan wants independence; Taiwan wants the rectification of its name; Taiwan wants a new constitution; Taiwan wants development; and Taiwanese politics is without the question of left or right, but only the question of unification or independence. This was not well received even by the US and was deemed ‘unhelpful’. All in all Chen’s term was basically corrupt and was bound to end badly.

The KMT resumed control in 2008 and again in 2012. In the combined elections in January 2016 the opposition candidate for president, Tsai Ing-wen, of the DPP won with 56% of the vote, and the opposition DPP was catapulted into an outright majority in the parliament. The election marked the first time a non-KMT party won a majority in the legislature.

After a setback in 2018 local elections, in January, 2020 Tsai Ing-wen was re-elected in the presidential election. In the parliamentary election President Tsai's Democratic Progressive Party (DPP) won majority 61 out of 113 seats. The Kuomintang (KMT) won 38 seats. She remains President today and is a strong advocate for Taiwanese independence.

Our next post will deal more specifically with China’s chest-beating and Taiwan’s continuing resistance. The Chinese Civil War remains unfinished business but is approaching a climax.


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