Country Report: The History, Government, People and Economy of Taiwan by Taylor V. Smith History During its earliest years, Taiwan was inhabited solely by aborigines, though a few Chinese settlers did immigrate to the island during the 6[SUP]th[/SUP] century. Although unofficial relations between China and Taiwan did exist beforehand, Taiwan did not become a protectorate of the Chinese Empire until 1206. The island remained sparsely populated until the 1600s when a flux in Chinese settlement occurred. In 1624, Dutch traders occupied a major Taiwanese port until Koxinga of the Ming Dynasty drove them out in 1661. In 1684, Taiwan was made a prefecture of Fukien province, China. Finally, in 1887, China granted Taiwan official provincial status. During the Sino-Japanese War of 1894, Japan occupied and colonized Taiwan. Japan continued to govern Taiwan as a colony from 1895 until the end of World War II in 1945, when Taiwan was returned to China. In 1949, following Nationalist army’s defeat at the hands of the Communists, Chinese Nationalist left the mainland and took control of Taiwan. On December 8, 1949, the Nationalists, led by Chiang Kai-shek, established a harsh authoritarian regime to solidify their position on the island and provide governmental stability. In 1950, as the Korean War began, the United States made an agreement to defend Taiwan in the case of an attack by mainland China. An official U.S.-Taiwan defense treaty was signed in 1954, and the U.S. began supplying Taiwan with economic and military aid. Throughout this period, Taiwan was acknowledged by the United Nations as the sole governor of China. Taiwan continued to represent China at the United Nations until 1971, when the U.N. replaced Nationalist leaders with Communist China’s representatives. During the 1980s, Taiwan’s authoritarian Nationalist regime ended martial law and began instituting democratic reforms. The Taiwan Nationalist Party, called Kuomintang (KMT), began to allow opposition parties to compete in elections. In 1996, Taiwan held its first direct democratic presidential election, electing Lee Teng-hui of the KMT party. The KMT continued to govern the island until 2000, when Chen Shui-bian of the Democratic Progressive Party (DPP) was elected president. Presently, President Chen continues to serve as Taiwan’s president. Government Constitutional Provisions Taiwan’s government remains organized under the 1947 Constitution of the Republic of China. This Constitution provides for a president, a National Assembly, and five governmental Yuan (branches). The five Yuan include the Executive Yuan, Legislative Yuan, Judicial Yuan, Examination Yuan and Control Yuan. The Constitution may only be amended by the National Assembly. Governmental System Taiwan is currently a constitutional democracy. Its Constitution was developed by Dr. Sun Yat-sen based on the principles of nationalism, democracy and social wellbeing. Despite its authoritarian history, Taiwan’s democracy is surprisingly stable, though the president remains a very powerful governmental figure. Moreover, Taiwan’s democracy has become increasingly direct: whereas the president was once elected solely by the National Assembly, Taiwan currently holds direct elections for this office. Structure and Role of State Institutions Reminiscent of Taiwan’s authoritarian roots, the office of the president remains the nation’s most powerful governmental office. Taiwanese presidents are elected directly and serve four-year terms. In addition to conducting state functions and foreign relations, the president is Commander-in-chief of Taiwan’s armed forces. The president is further empowered to appoint the premier of the Executive Yuan and the Auditor General of the Control Yuan, although the Legislative Yuan retains the right to pass a vote of no confidence against the president’s premier appointee. Additionally, with the consent of the Control Yuan, the president may appoint the president, vice president and grand justice of the Judicial Yuan, as well as the vice-president and various members of the Examination Yuan. Finally, the president has the authority to dissolve the Legislative Yuan, should the need exist. Reciprocally, the Legislative Yuan is responsible for instituting presidential and vice-presidential impeachment proceedings. The National Assembly originally existed to elect Taiwan’s president and vice-president. However, with the continued spread of democratization, the National Assembly has lost this authority. Presently, the Assembly is elected ad hoc, solely for the purpose of authoring and enacting amendments to Taiwan’s Constitution. The Executive Yuan is Taiwan’s highest governmental body. It is headed by a premier, who is directly appointed by the president. The Executive Yuan also includes the heads of Taiwan’s various ministries, each of which are nominated by the Executive Yuan’s premier and appointed by the president. This Yuan’s function is to carry out the administrative operations of the government. The Legislative Yuan has two primary responsibilities: first, enacting laws and budgetary policies, and second, reviewing the administrative policies of the Executive Yuan. As of 1999, pursuant article four of Taiwan’s Constitution, membership in the Legislative Yuan was limited to two hundred and twenty-five members. By 2007, this number will be decreased to one hundred and thirteen members. Members of the Legislative Yuan serve four year terms. Approximately two-thirds of the Legislative Yuan’s members are elected directly, while the remaining third are selected based on proportional representation. Although the Legislative Yuan has the authority to pass a vote of no-confidence against the Taiwanese president’s candidate for premier of the Executive Yuan, the president may dissolve the Legislative Yuan. Theoretically, this system provides for checks and balances. In practice, however, this means that the president may appoint the premier without the consent of the Legislative Yuan. The Judicial Yuan wields authority to exercise control over the nation’s judicial system and to interpret Taiwan’s Constitution. Membership is comprised of fifteen grand justices, each of whom is appointed by the president with the consent of the Legislative Yuan. Taiwan’s Control Yuan exists to audit government accounts and review the conduct of government officials. If necessary, the Control Yuan may initiate impeachment proceedings against any government official, excepting the president and vice-president, who may only be impeached by the Legislative Yuan. Finally, the Examination Yuan of Taiwan has three main functions. First, it examines and selects government officials. Second, it determines pay scales. Third, it provides public insurance, retirement, and pension programs. Electoral System Taiwan employs three distinct electoral systems, including both plurality and proportional methods of election. First, for the election of presidents, mayors, and magistrates, a direct plurality vote determines which candidate is elected. Second, for the election of approximately two-thirds of the Legislative Yuan, as well as for other various council members, direct plurality votes are cast for specific candidates, but each party is granted a pre-established number of seats. Third, for the election of the remaining Legislative Yuan members, votes are cast for specific parties, while proportional representation determines how many seats each party receives. Current Government Officials Taiwan’s most recent presidential elections were held in 2004. Incumbent Democratic Progressive Party President Chen Shui-bian was re-elected to Taiwan’s highest governmental office. Annette Lu Hsiu-lien serves with President Chen as vice-president. President Chen is both liberal and progressive, seeking to encourage a global capitalistic market and a domestic social welfare program. Historically, President Chen has been very outspoken in favor of Taiwan’s independence from China. Accordingly, his presidency and recent reelection have provoked increased tensions between Taiwan and the Chinese mainland. The Executive Yuan is currently led by Primer Su Tseng-chang of the Democratic Progressive Party. Liu Yuh-san serves as its Secretary General. The Legislative Yuan is headed by President Wan Jin-ping. The Judicial Yuan is led by its current president, Yueh-sheng Weng. The Control Yuan’s presidential position is currently vacant. Finally, the Examination Yuan is led by President Yao Chia-wen. People and Politics Political Participation Voter Turnout First, for presidential elections, voter turnout in Taiwan is high. During Taiwan’s most recent presidential election, held 20 March 2004, 80.3% of the nation’s population turned out to vote. Second, contrary to their eager participation in presidential elections, Taiwanese voters appear less interested in Legislative Yuan elections. During Taiwan’s 1998 election for Legislative Yuan members, only 68.09% of Taiwan’s population cast their vote. Finally, voter turnout for Taiwan’s last ad hoc National Assembly election was very poor: only 23.4% of the population voted for members of the National Assembly. Interest Group Involvement Although Taiwan does have a few scattered interests groups, as do most countries with laws protecting free speech, none of these groups appear especially large or influential. There are two possible explanations for this phenomenon. First, due to their nationalistic underpinnings, in addition to their united stance against the mainland, Taiwanese nationals appear to be relatively homogeneous in their political objectives. Second, it may be that, because Taiwan’s two major political parties are so strong and energetic, it has not become necessary for Taiwan’s population to develop strong, well-organized interest groups. What interests groups do exist in Taiwan primarily exist to articulate very specific critiques of administration policies or legislative statutes. Additional Political Participation The Chinese mainland has attempted on numerous occasions to influence Taiwan’s election results and political participation. In 1996, China attempted to manipulate Taiwan’s first directly-democratic presidential election by conducting a series of naval exercises in the Taiwan Strait. Any possibility of a Chinese naval attack was precluded, however, when the U.S. responded to China’s naval activity by deploying two aircraft carriers to the Strait. Again in 2000, China attempted to influence Taiwanese election results by threatening to “adopt all drastic measures possible, including the use of force” if Taiwan refused to inaugurate reunification discourse. In response to China’s threats, the Taiwanese people promptly elected pro-independence candidate Chen Shui-bian to the presidency. Once elected, President Chen defused the conflict with China by speaking less zealously about the possibility of an independent Taiwanese state. Political Parties Although Taiwan’s mixed election system does allow various independent candidates to occasionally be elected as Legislative Yuan officials or National Assembly members, Taiwan ultimately has only two influential political parties: the KMT party and the Democratic Progressive Party. The Kuomintang (KMT) party was initially directed by the Chinese Nationalists who fled to Taiwan after World War II. Under this party’s name, the Nationalists organized a harsh authoritarian regime – Taiwan’s first national government. After a few years of operating under a strictly authoritarian system of government, the KMT party reorganized itself according to Leninist principles. Finally, during the 1970s, the party surrendered some of its ridged policies, becoming a soft authoritarian regime. During this period of governance, the KMT implemented a state-controlled economic program that allowed Taiwan to become one of the world’s most affluent newly-developed countries in the world. Beginning in the 1980s, the KMT party began aggressively pursuing democratic reforms. Incredibly, during this period of time, the KMT successfully reorganized itself into a conservative party, allowing Taiwanese nationals to assume leadership roles in the party for the first time. Additionally, in 1989, the KMT party began to allow opposition parties to develop and participate in elections. The KMT party remained in power until 2000, when a Democratic Progressive Party candidate won the presidential election. The Democratic Progressive Party is Taiwan’s main opposition party. The party came to power in 2000 when its presidential candidate, Chen Shui-bian, was elected president. Although the KMT party would likely also support Taiwan’s independence from the Chinese mainland, the DPP tends to be particularly outspoken toward this end. Accordingly, the DPP’s increasing popularity has been viewed by China with the utmost concern. The DPP currently occupies Taiwan’s presidential office, as well as a majority of the seats in the Legislative Yuan. Political Culture Values Heavily influenced by Taoist ideals, Taiwanese nationals typically have a strong, persistent work ethic. Historically, Taiwanese citizens have forgone leisurely activities, preferring rather to save the majority of their income. As the island has become more postmaterialist, however, its people have begun to invest more time and money toward the pursuit of leisurely activities, such as international travel and sports activities. Similarly, the government has made attempts to encourage the arts by developing many modern concert halls. Besides a vigorous work ethic, religion is central to the lives of many Taiwanese citizens. As of 2001, out of Taiwan’s total population of 22,405,568 people, 827,135 individuals identified themselves as Taoists, 382,437 as Protestant Christians, 216,495 as Buddhists, and 182,814 as Catholics. These numbers do not include the numerous animistic aborigine groups, each of which has their own myriad of gods. Moral Norms Among the older generations, Taoist and Buddhist values influence public opinion on moral norms. Respect, honor, hard work, and propriety are held as the highest moral values. The Christian populace, influence by western missionaries, tends to ascribe to western conservative-style moral values. Diverging sharply from the moral norms held by their predecessors, Taiwan’s growing youth subculture has tended to dismiss traditional ideas on morality altogether, much as western youth have done. This pattern has most likely been catalyzed by western motion pictures. Beliefs and Expectations Pursuant their Taoist and authoritarian foundations, Taiwanese people usually exercise a great deal of respect toward their government. Generally, as in most Asian countries, Taiwan’s citizens have emphasized the individual’s responsibility to his country. Increasingly, however, democratic ideals of liberalism and individualism have shaped citizens’ beliefs and expectations about the nature and purpose of government. Attitudes Based on the relatively high political participation in Taiwan’s recent presidential election, it can be safely assumed that most Taiwanese nationals have an interactive attitude toward their government. Although their political culture has historically emphasized submission to governmental authorities, which might indicate deferential participation, Taiwan’s strong protection of free speech rights seems to dismiss this theory. Moreover, while some may argue that Taiwan’s aborigine subculture is alienated, it appears evident that, if any disenfranchisement has occurred, it has not been promulgated by the government. Many aborigine villages are only accessible by train, while some are not accessible at all. Additionally, the aborigine constituency is generally disinterested in political affairs, being more concerned about their agricultural success. Thus, if any preclusion from political participation has occurred amongst the aborigine subculture, it has been self-imposed. Ideology As afore noted, Taiwan’s Constitution intends to encourage a liberal democratic government and a social welfare approach to domestic affairs. Taiwan’s two major political parties, to varying degrees, appear to uphold the values espoused by the Constitution. Current President Chen Shui-bian has expressed his interest in developing a globally-competitive capitalist economy and a compassionate social welfare initiative. In 2001, approximately 96% of Taiwan’s population was covered under Taiwan’s National Health Insurance program. Therefore, it appears that Taiwan’s ideology values liberalism in governance, capitalism in economics, and social welfare in its approach to domestic policy. Economy Economic Development Prior to the arrival of KMT Nationalists in 1949, Taiwan’s economic subsistence was agricultural. Rice and sugar trade provided a majority of the island’s income. Upon establishing Taiwan’s first national government, the KMT party began rapidly industrializing Taiwan’s economy throughout the 1950s. Through the KMT party’s state-controlled economic program, Taiwan began exporting cheap manufacturing goods throughout the 1960s and ‘70s, enabling Taiwan to develop one of the most successful newly-industrialized markets in the world. During the 1980s, Taiwan began to focus on exporting technology, chemicals and electrical equipment. Taiwan subsequently became the largest exporter of computer products in the world. By the end of the 1980s, democratic reforms began to allow for much more economic privatization. Despite its exclusion from such organizations as the United Nations and the World Bank, Taiwan is currently considered one of the world’s high-income democracies, counted among such other high-income countries as Switzerland, the United States, Japan, and the United Kingdom. Thus, Taiwan clearly has a well-developed economy. Economic System From the 1950s through the 1980s, Taiwan’s economy was centrally planned and operated. Beginning in 1989, however, the government began to implement a privatization program. The most notably privatization efforts include the banking, telecommunications, and industrial ventures. This trend toward privatization continued throughout the 1990s as the government became less involved in investment and foreign exchange. Because of Taiwan’s social welfare initiatives, the nation’s economy does not operate as under a strict laissez-faire capitalist system. However, it does appear evident that Taiwan is becoming progressively more capitalistic in its approach to economics. Economic Resources Prior to Taiwan’s industrialization in the early 1950s, the island’s major sustenance consisted mainly of agricultural products. However, due to Taiwan’s mountainous terrain, only about 25% of the nation’s land is usable, making Taiwan ill-suited for an agrarian economy. Taiwan’s natural resources are equally scarce. Although deposits of marble, coal, and other minerals can be found scattered throughout Taiwan, these deposits are typically too small to provide any sustainable exports. Taiwan’s forests are perhaps its only abundant natural resource. Unfortunately, due to the timber’s inaccessible and poor quality, Taiwan’s forests offer no real economic value for the nation. Because natural resources fail to provide the nation with economic stability, Taiwan’s economy relies primarily on manufacturing and foreign commerce. Economic Challenges First, as noted above, a scarcity of resources has prevented Taiwan from establishing a successful natural resource trade. Nevertheless, Taiwan responded to this challenge by becoming largely industrialized. Taiwanese manufacturers export numerous items, including textiles, electronic equipment, and plastic products. Additionally, Taiwan is one of the largest exporters of computer products in the world. Thus, despite Taiwan’s dearth of resources, it has managed to develop a successful, globally-competitive economy. Secondly, the nation’s foreign trade opportunities are significantly limited due to the unresolved status of Taiwan’s independence. In order to be allowed access to Chinese markets, most nations still officially affirm the “One China” policy, which considers Taiwan a province of China. However, because this policy disavows Taiwan’s statehood, nations which affirm “One China” are unable to interact with Taiwan on a nation-to-nation basis. Accordingly, Taiwan is unable to conduct trade with most foreign nations, which greatly inhibits its economy. “One China” also precludes Taiwan’s participation in such organizations as the World Bank, which is also economically damaging. Nevertheless, from the time of its establishment in 1949, Taiwan managed to maintain constant positive economic growth until 2001, when a recession caused Taiwan’s economy to suffer the first instance of negative growth since its founding. Since 2001, an increase in exports has allowed Taiwan’s economy to recover from the recession. Conclusion Taiwan is a remarkable country on many fronts. First, despite its harsh authoritarian history, Taiwan has managed to create a strong, stable democratic government. Secondly, departing from a traditional Asian political culture, Taiwanese citizens have demonstrated an interest in actively participating in their government. Finally, Taiwan is currently considered one of the world’s high income democracies, despite the many relatively-serious economic challenges that it has faced. Regardless, Taiwan is clearly motivated to pursue noble political goals. The nation’s future, however, depends a great deal on how it develops its foreign policy – first, with China, and secondly, with the rest of the world. Bibliography China External Trade Development Council. Doing Business with Taiwan R.O.C. Taipei: China External Trade Council, 1993. Economist.com. “Country Briefings: Taiwan.” Country profile, 6 December 2006. http://www.economist.com/countries/Taiwan/. IFES Election Guide. “1998 Voter Turnout.” Election information, 5 December 2006. http://www.electionguide.org/voter-turnout.php?search_year=1998&submit.x=16&submit.y=10. Price Waterhouse. Doing Business in Taiwan. Taipei: Price Waterhouse, 1991. 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Turner, ed., 335.  The World Book Encyclopedia, 2007 ed., s.v. “Taiwan.”  Ibid.  China External Trade Development Council, 4.  Turner, ed., 335.  Ibid.  China External Trade Development Council, 4.  The World Book Encyclopedia, 2007 ed., s.v. “Taiwan.”  China External Trade Development Council, 4.  Turner, ed., 335.  The World Book Encyclopedia, 2007 ed., s.v. “Taiwan.”  Turner, ed., 335.  Ibid., 338.  China External Trade Development Council, 4.  Turner, ed., 335.  China External Trade Development Council, 4.  Republic of China, “A Brief Introdution to Taiwan,” government information, 3 December 2006, http://www.roc-taiwan.org.uk/taiwan/5-gp/brief/info04_4.html.  Turner, ed., 335.  Michael J. Sodaro, Comparative Politics: A Global Introduction (New York: The McGraw-Hill Companies, Inc., 2004), 621-622.  Turner, ed., 335.  IFES Election Guide, “1998 Voter Turnout,” election information, 5 December 2006, http://www.electionguide.org/voter-turnout.php?search_year=1998&submit.x=16&submit.y=10.  Turner, ed., 335.  Sodaro, 621-622.  Ibid., 620-621.  Ibid., 621-622.  Turner, ed., 335.  Price Waterhouse, 5.  Turner, ed., 338.  Turner, ed., 335  Sodaro, 621  Turner, ed., 338.  Economist.com, “Country Briefings: Taiwan,” country profile, 6 December 2006, http://www.economist.com/countries/Taiwan/.  Sodaro, 81.  Turner, ed., 336.  China External Trade Development Council, 2.  The World Book Encyclopedia, 2007 ed., s.v. “Taiwan.”  Ibid.  Sodaro, 621.  Turner, ed., 336.