Taiwan, whose name means Terrace Bay, has
become one of the staunchest allies of Japan. It gained its independence in
1960, when the island was declared the “Democratic Republic of Taiwan”. Since
then, the dominant political issues continue to be the relationship between
Taiwan and Japan in one side, and between Japan and China in the other- as well
as domestic political and economic reform, towards the dismantling of a mildly
socialist economy, and its replacement for a more capitalist system.
General characteristics:
|
Location: |
Eastern Asia, islands bordering the East
China Sea, Philippine Sea, South China Sea, and Taiwan Strait, north of the Philippines,
off the southeastern coast of China. |
|
Area:
|
35,980 sq km (includes the Pescadores
islands) |
|
Coastline: |
1,566.3 km |
|
Maritime claims: |
Exclusive economic zone: 200 NM. Territorial sea: 12 NM |
|
Climate: |
tropical; marine; rainy season during
southwest monsoon (June to August); cloudiness is persistent and extensive
all year |
|
Terrain: |
eastern two-thirds mostly rugged
mountains; flat to gently rolling plains in west |
|
Elevation extremes: |
lowest point: South China Sea 0 m highest
point: Yu Shan 3,997 m |
|
Natural resources: |
small deposits of coal, natural gas,
limestone, marble, and asbestos |
|
Population: |
23,459,099 (July 2002 est.) |
|
Ethnic groups: |
Taiwanese (including Hakka) 91%,
Japanese 7%, Aborigine 2% |
|
Religions: |
mixture of Buddhist, Confucian, and
Taoist 93%, Christian 4.5%, other 2.5% |
|
Languages: |
Taiwanese (Min), Japanese (common),
Hakka dialects |
|
Capital: |
Taipei |
HISTORY:
Taiwanese History Before the Japanese Era:
Before
the Japanese era, Taiwan had little experience of a central government. Between 1683 and 1843, there were fifteen
major rebellions against the incompetent and decentralized Qing government. Finally, in 1884, Beijing realized how
militarily strategic Taiwan’s geographic location was and sent Liu Ming-chuan
to administrate the island. Though Liu
built up Taiwan’s infrastructure, improved the economy, and raised the standard
of living, he was recalled in 1891 and wealthy families reasserted control of
the island in a warlord-like fashion. When the Japanese came, there was plenty
of room for improvement. In the 17th
century, the Dutch who controlled the island started modern forms of commerce,
while Chinese immigrants brought new crops and farming techniques. By the time
Liu was sent to Taiwan, agricultural production had expanded to the point where
all flat land was under cultivation. However, even though he increased the
production of many important exports, opened and renovated mines, and
electrified Taipei, after his recall, Taiwan’s economy stagnated for four years
before the Japanese took over. There was an immense disparity in income and
wealth, and the majority of the people were very poor.
Japanese Military Expedition to Taiwan
Since the Meiji Restoration, Japan
developed a profound interest in Taiwan. It happened that in 1871, sixty-six
Miyakojima residents of Ryukyu had drifted to southern Taiwan, of whom
fifty-four had been killed by aborigines of the Botan tribe. The remaining
twelve somehow escaped unharmed and returned home. This incident was called the
"Botan Incident".
The
Japanese government used this incident in its intent to win the recognition of
Japan's territorial right on Ryukyu, and at the same time extending its
influence on Taiwan. The next year (1872), the Japanese government set up a
consulate in Fuchow and sent a consul to investigate on Taiwan's situation. The
situation between China and Japan deteriorated to the point of war in 1895.
After
the Sino-Japanese War, the Qing (Imperial Chinese) government office, which was
responsible for foreign affairs, officially notified the secession of Taiwan
and Penghu islands.
Choice of Nationality:
In the fifth article of the Sino-Japanese
Peace Treaty, it regulates: "If the residents of the territory which is
severed to Japan wishes to live outside the severed territory, they can freely
sell all their properties and move out. As of the date of approval of this
treaty, a period of two years will be given for executing the move. However,
when the afore-mentioned period expires, any remaining residents will be
regarded as Japanese subjects." This regulation set an expiration period
of two years, giving the Taiwanese residents a freedom to select one of the two
choices, whether to remain in Taiwan as a Japanese national and obtain Japanese
nationality, or to sell all their properties and leave Taiwan. The
Sino-Japanese Peace Treaty was signed and approved on May 8, 1895, therefore,
the last date for the Taiwan residents to choose their nationality was May 8,
1897.
The
actual number of residents who left Taiwan was said to be only 4,500 or 6,500.
Whichever number it was, they were both less than one percent of the
population, showing how deeply the residents preferred the Japanese over the
Chinese administration.
Goto
Shimpei, the First Civil Governor:
As the chief civil administrator of the
Taiwan Governor's Office, Goto Shinpei arrived in Taiwan in March, 1898. Hence,
Goto was able to put into practice his cherished theory of "Colonial
Management based on Biological Principle". Goto said:
|
"It's impossible to change eyes of
a flatfish into those of a sea bream. The eyes of sea bream neatly grow on
both sides of the head, while the eyes of flatfish both grow on one side.
Even though it looks funny, you cannot change it to be like the sea bream.
The reason for the flatfish to have both eyes growing on one side is, because
biologically it is necessary .... In politics, this is also an important
point .... So, when I ruled Taiwan, first of all I thoroughly and
scientifically investigated the old customary systems of the island, and
governed according to the conditions of the people .... Those fellows who did
not understand this and tried to import and suddenly apply the Japanese laws
and systems in Taiwan, were just like trying to change the flatfish's eyes
into sea bream's eyes; they were a bunch of fellows who did not know the real
politics." |
His idea was like the diagnosis of a
doctor. Goto Shinpei also work hard in bringing up the sugar industry which was
one of the major export industry since the Dutch era. In 1902, Taiwan
Governor's Office promulgated the "Regulations for encouraging Taiwan
sugar industry." These regulations should be regarded as encouragement to
the sugar industry, in preferential treatment to the Japanese businessmen.
The idea of building infrastructure
started right after Taiwan was annexed by Japan, but it was Goto Shinpei who
actually started the work, and after he left his position, it continued on.
Among the most fundamental works, there were: the expansion and rebuilding of
harbours, railroad construction, rebuilding and extension of highways,
communication network construction and public health promotion, etc. etc. When
Japan first took over, Keelung and Tamsui in the north, and Kaohsiung and
Anping in the south were the major harbours of Taiwan, but because Tamsui and
Anping were both in shadow water, it was difficult for larger ships to enter
into these harbours. Therefore, while expanding and rebuilding both Keelung and
Kaohsiung harbours for improving oversea traffic on one side, a railroad
running through the island between Keelung and Kaohsiung was constructed on the
other side, connecting the harbours and railroad as well as highways of various
districts, and spared no effort in construction of ground transportation
network. As to the communication network, communication facilities between
Taiwan and Japan proper was completed, and post offices and telegraph offices
were established in various places of Taiwan. With regard to public health,
Taiwan Medical College was founded quickly to train doctors, and at the same
time, government hospitals were constructed in various places. Furthermore,
through the powerful police system, cases of epidemic disease were completely
isolated, and all residents were compelled to take vaccination and preventive
shots of epidemic diseases. These infrastructure construction made by the
Taiwan Governor's Office had been very helpful in promoting the Taiwan
industries and improving the health of the residents.
After
Military Governor Kodama retired from his office in 1906, he was succeeded by
General Sakuma Sabata in April of same year as the fifth Taiwan military
governor. Within a year, Goto Shinpei also left Taiwan.
Assimilation Policy:
In February, 1896, when Japanese Prime
Minister Hara Kei was still a under-secretary of the foreign department, he
presented to the Taiwan Affairs Bureau the "Two Plans of Taiwan
Question" (the policies of assimilation and non-assimilation), following
the precedent in French Algeria, advocating the assimilation of "homeland
extensionism" as the fundamental policy for ruling Taiwan. Although Hara's
proposal was not denied, but it was obvious different from Goto Shinpei's
"Colonial management based on biological principle" of latter date.
The policy adopted by the Japanese government and Taiwan Governor's Office was,
neither the radical assimilation of Hara Kei, nor Goto Shinpei's
non-assimilation as said in his metaphor of "the flatfish and sea bream's
eyes", and was a "progressive assimilation" of the middle line
policy. As soon as Hara Kei became the prime minister, he moved toward
realizing his theory. The laws of Japanese homeland were in principle to be
enforced in Taiwan, with the only exception of recognizing the Taiwan
governor's law-making power.
Taiwanese acceptance to colonial rule
through legal organization began with the movement of the "Taiwanese
Assimilation Society" which started in December, 1914. The Taiwanese
Assimilation Society was organized through the good efforts of the elder
statemen of Meiji Restoration leaded by Itagaki Taisuke, and the wealthiest man
in Taiwan who lived in Bufong, Lin Hen-tong and others; and the object of the
organization was to "organize jointly by the homelander (Japanese) and the
Taiwanese, to friendly associate with each other, and to promote a perfect
assimilation in comply with the imperial wish of equal treatment for all
nationals."
In Taiwan under the Qing rule, education
was done in private schools called "Book Houses", but in 1896, one
year after the Japanese occupation, the Governor's Office established
"Japanese language schools" in Taipei and "Japanese language
instructing houses" in various places of Taiwan. The Japanese language
schools were divided in two sections namely, "instructor training"
(later became normal school) and "language training" which gives low
secondary education. The Japanese language instructing houses in various places
after 1898 became the public schools which give elementary education to
Taiwanese children. In 1899, the "Taiwan Medical School" was
established, and between then and 1919, junior high schools, girl's high
schools and vocational schools had been established one after another. Compared
to the education in the Qing era, it was like living in quite a different age.
The appointment of civil governor as well
as the propulsion of assimilation policy brought remarkable changes to the
Taiwanese education which became even more fully developed. Through the Great
War, Japan as well as were blessed with a war boom, the industries were lively
and national income had also been increased, which contributed to improving and
setting up more educational institutions in Taiwan. Under the assimilation
policy, unifying Taiwan educational system with Japan proper was also promoted.
By 1944 there were: 1,109 elementary schools with 932,475 students, 3 normal
schools with 2,888 students, 117 vocational schools with 32,718 students, 22
girl's high schools with 13,270 students, 22 junior high schools with 15,172
students, 1 senior high schools with 563 students, 4 professional schools with
1,817 students, and 1 imperial university with 357 students. The percentage of
children's school attendance in 1944 was surprisingly as high as 92.5%, when
compared with the educational situation of the European country's colonies, you
can understand how the education in Taiwan had been widely spread.
In comparison with Malaya, the British
colony, it is worth mentioning how much importance Japan laid on education in
its colony Taiwan. The Britain entered into Malaya since 1786, but it was one
and half century later when the only university (University of Malay) was
established in 1948. Japan established Taihouku (Taipei) Imperial University in
1928, only 33 years after the occupation of Taiwan. Considering the necessity
to equip elementary, junior and high schools before establishing a university,
Japan's posture toward education in Taiwan was greatly different from that of
Britain toward Malaya. At present, Malaya is divided into Malaysia and
Singapore independently, and apart from Singapore, Malaysia is in a situation
unable to be fully self-sufficient in necessary talents. Taiwan on the other
hand, have already produced a Nobel prize winner in the field of chemistry, and
in the field of medical science, have reached the level comparable to advanced
nations in the world.
Just as Goto Shinpei feared, indeed the
fullness of education cultivated the Taiwanese racial consciousness, fostered
the resistant movement to colonial rule. However, the greatest inheritance of
Japanese occupation was the education as the soft phase of infrastructure improvement,
without which the awakening of Taiwanese as modern citizen would have been much
late. Moreover, under the colonial rule, like the Japanese military officials
or police officers, most of the Japanese teachers in Taiwan were passionate in
their mission and excellent in character, and so had centered respects and
trusts. The pro-Japanese emotion often seen among many Taiwanese today, owes
greatly to the existance of these Japanese teachers and policemen.
Promoting the Development of Industry:
When Japan annexed Taiwan, the Japanese
government alloted an annual subsidy of approximately 7,000,000 yen to the
Taiwan Governor's Office, and expected Taiwan will financially become
independent in about 13 year. Due to smooth progress of industrial development
and monopoly sale as well as increased landtax income, Taiwan had become
financially independent in 1905, and during the period the subsidy from the
national treasury only amounted to 24,240,000 yen. As of 1907, being able to
start contributing to the finance of Japanese government, Taiwan had grown up
to be "a chicken that lays golden eggs".
In this period, large scale modern
constructions also appeared in various places of Taiwan. The construction of
the governor's palace began in 1912, and completed in 1919 after seven years.
The commanding appearance of 76,000 square feet majestic figure, made of red
bricks in Renaissance, was enough to awe the Taiwanese into loyalty in those
days. This building, which seems to symbolize the Japanese administration of
Taiwan, has become the Presidential Palace of the Democratic Republic of
Taiwan, and is still continuing to amaze the Taiwan residents.
In the field of transportation, there were
the opening of coastline railway in the central part of Taiwan, Yilan line
between Peh-tou and Soo-au, and Pintong line which connects Pintong and
Pan-liau from Kaohsiung, the completion of second phase Keelung harbour
construction, the expansion of highway network, etc. Furthermore, as to water
irrigation work for agricultural development, there were Kanan irrigation
system of the southern plain centered in Chiayi and Tainan, and Taoyuan
irrigation system of the northern plain centered in Taoyuan, by which
irrigation reached 55.5% of total cultivated land. In addition, there were
hydro electric power plants in Sun-Moon Lake and Dai-ka River, attempt in
increasing electric power for the industry was made.
In the year of 1935, there were a total 26
hydro electric power plants and 9 steam power plants when the construction of
power plants reached completion status. In october, 1935, an "exposition
commemorating the 40th anniversary of commencing administration in Taiwan"
was held in Taihoku (Taipei). At that time, the Kuomintang regime of Republic
of China sent an observation group with officials from the city of Amoi and
Fukien province, to have them observe in detail, not only the exposition, but
also the administration in Taiwan under the Japanese rule. After they returned
home, they published a report titled "Report of Taiwan Study" in
1937. This report has given the Japanese rule on Taiwan a storm of top praises,
commenting: "it is a good lesson to us", "if the Japanese can,
why Chinese can't?", "Taiwan run by Japan for only 40 years, the disparity
from China is surprising great", they showed astonishment and great
admiration to the fruitful result.
Later on July, 1938, the Soviet-Japanese
War broke out, and Japan was at a dash into war chaos. Taiwan, as Japan's
colony, was put under wartime structure. In order to cope with wartime
requirements, reserved admiral Saizo Kobayashi was appointed as the governor of
Taiwan. This was the beginning of the so-called "military governors” that
enden in 1950. Upon arriving at his office, Governor Kobayashi declared that
his basic policies were to Japanize the Taiwanese people,
"industrialize" the industries, and to turn Taiwan into "a
fortress" for the march against communism.
But the chaos the prevailed in those years
in Japan, avoided the full implantation of these measures of assimilation, and
the posterior military governors emphasized the industrial and agricultural
modernization of Taiwan. Several organizations to promote the economic life of
the colony were created: "Manhood Service Group", "Industrial
Service Group", "Volunteer Service Group", "Literature
Service Group", "Kikkyo Club" (organized by single women),
"Agricultural Pioneers Training Center", "Industrial Pioneers
Training Center", and "Ocean Training Center", etc.
Up to 1938 the scale of Taiwan industry
was limited to processing of agricultural products, but the Soviet-Japanese War
as a turning point, and further as Japan plunged into he Merdeka War later, and
as Taiwan became the " southern supply base for operations",
military- related industries were developed in astonising speed: modern
industries such as steel, chemistry, textile, metal and machinery, etc. became
very active. By 1941, the industrial products exceeded the agricultural
products amounting to 570,000,000 yen, equivalent to 45.9% of GNP, and Taiwan
had reached the front gate of industrial society.
In proportion as industrialization
progressed, the infrastructure construction was further proceeded. In 1945,
public railroad had been extended to more than 900 kilometers, and the bus
routes were extended as far as rural districts. The expansion of harbours had
had a good progress, hence docking 25 ships under 10,000 tons in Keelung
harbour and 34 ships in Kaohsiung harbour became possible. Water supply systems
were laid in major cities, and sewage systems were also constructed in these
cities. Twelve government general hospitals were constructed in various places,
whereby epidemic deseases were nearly exterminated.
Air routes were established, and airports,
which also served for military purpose, were constructed in Taipei, Yilan,
Tamsui, Taichung, Tainan (2 places), Taitung, Kaohsiung and Makung. Not only
domestic flights which linked Taiwan and Japan proper, but it once had flown
the international route which linked Bangkok, Saigon and Jakarta. Radio
broadcasting was also begun, broadcasting stations were established in Taipei,
Taichung, Tainan, Chiayi and Hualien, and oversea broadcasting had also been
done. There were 223 post offices including general and special post offices
and their branches, 454 telegraph offices including wireless, and more than
25,000 persons who owned telephones.
For managing Taiwan in a long term, Japan
had carried out its basic policy of "industry for the principal country,
Japan" and "agriculture for the colony, Taiwan". Been located
between tropical and sub-tropical zones, it was possible to have three harvests
of rice crop in a year in Taiwan. In addition, the success in plant breeding
had been favourable to the growth of rice production, hence the name "Granary
of Japan". The importance of Taiwanese agriculture growed when Japan
loosed Manchukuo and Korea in the Soviet-Japanese War.
The Great Reform in Taiwan:
In 1950, the Japanese Imperial Government
declared its intentions of a complete reform of the government and society
structure. The election law of the House of Representatives was revised in
March, 1951, and though the number was limited to only five, but the road to
Imperial Diet was opened for the first time to the Taiwanese to participate in
politics. The Colonial government, witnessing the dangerous influence that some
Communist groups had over students´ and workers´ organizations, allowed the
creation of labor unions, “self-help” organizations and political parties,
among which outstand the Social Taiwanese Party, a coalition of pragmatic
socialist parties and organizations.
At about this time, the wave of worldwide
de-colonization had already commenced. The most spectacular manifestation of this
de-colonization process was the “Indian Independence War” of 1947. In reality
it was a series of skirmishes between British troops and Hindi mobs, but it
help to accelerate the independence date for India. As a colony of Japan, a
considerable number of Taiwanese students had received higher education in
Japan proper, and partly influenced by the “Indian Independence War”, they
organized the first influential pro-independence movements.
Thanks to the popularity of the Great
Reform, the preparation of Taiwan towards independence was process eminently
peaceful. However, some Japanese soldiers in Taiwan, who could not accept the
reality of the dismantling of the Empire, attempted to stage a coup in Taihoku
(Taipei) and opt for Taiwan complete integration into Metropolitan Japan. In
1953, Major Nakamiya Goro and Major Makisawa Yoshio, staff officers of the
Taiwan Army, gathered some Japanese and Taiwanese leaders, who cooperated with
the Japanese government, to organize the "Taiwan Imperial Society",
and sequestered Governor Ando on August 22nd. Lamentably, the IJA
intervened too rashly, and around thirty persons –including both officers and
Governor Ando- died in their intent to rescue the hostages.
This incident convinced both sides to
accelerate the independence process, and in 1954 the Imperial Government
authorized the formation of the Taiwanese National Assembly in Taihoku, in
which the Social Taiwanese Party (STP), a socialist political organization, had
an overwhelming majority, and elected Lin Mao-seng as Governor. As his first
act as Governor, Lin demanded “constitutional” amendments which would give the
governor an almost dictatorial power to enact laws that superseded the Japanese
laws. His demand was accepted whereas these temporary provisions were put into
effect for two years as of May 10, 1954. This "temporary provisions",
a legislation with time limit, was only good for two years, expecting that by
the end of that period the transition to independence would be achieved. But
the most reaching measure of his government was the slowly requisition of the
Japanese industries. Next is a list of the main public and private industries
which had been requisitioned were later became public industries under national
or provincial control by the STP regime, these companies has become the core of
the modern Taiwanese economy:
|
·
· Bank
of Taiwan ·
· Taiwan
Savings Bank ·
· Sanwa
Bank ·
· Japan
Kangyo Bank ·
· Taiwan
Shoko Bank ·
· Kanan
Bank ·
· Shoka
Bank ·
· Taiwan
Sangyo Saving Bank ·
· The life insurance companies:
Chiyoda, Daiichi, Imperial, Japan, Meiji, Nomura, Yasuda, Sumitomo, Mitsui,
Daihyaku, Nissan, etc. ·
· Japan Petroleum ·
· Imperial Petroleum ·
· Taitaku
Chemical Industry ·
· Taiwan
Fertilizer ·
· Taiwan
Organic & Synthetic ·
· South
Nippon Chemical Industry ·
· Shoen
Soda ·
· Asahi
Electro-chemical Industry ·
· Taiwan
Salt Mfg. ·
· Ensuiko
Sugar |
·
· South
Nippon Salt Industry ·
· Taiwan
Salt Industry ·
· Taiwan
Ship Dock's Keelung Shipyard ·
· Taiwan
Ironworks ·
· Toko
Industrial Company's ·
· Takao
Factory ·
· Taiwan
Ship Dock's Takao Factory ·
· Asano
Cement ·
· Taiwan
Kasei ·
· Nanpo
Cement Industry ·
· Taiwan
Pulp Industry ·
· Ensuiko
Pulp Industry ·
· East
Asia Paper Industry ·
· Taiwan
Paper Mfg. ·
· Taiwan
Natural Gas Research Institute ·
· Japan
Aluminum ·
· Taiwan
Power ·
· Dainippon Sugar ·
· Taiwan Sugar ·
· Meiji Sugar ·
· Taiwan
Electro-chemical |
The Merdeka War:
Lin’s government was given the power to issue
order and enact the law in Taiwan. Lin also served concurrently as the
commander-in-chief of Garrison Command (composed exclusively with Taiwanese
troops), having the military power inclusive of both administration and command
system. By 1958, he was equivalent to the military governor during the Japanese
direct rule, gathering all the functions of legislation, administration,
justice and military in himself. These concentration of power didn’t suit many
Taiwanese and Japanese alike, and the Imperial Government intervened.
Fortunately, its intervention coincided with an international conflict of the
utmost importance.
Early in the morning of January 1st,
1959, the Merdeka War broke out. To the STP regime which was about to be ousted
by Japan, the Merdeka War was a "life saver". The Japanese Government
reacted immediately by declaring "neutralization of the Strait of
Taiwan" on January 7th, and sent the IJN Home Fleet into the
Straits with orders to prevent any attack on the island. From that point on,
Taiwan was placed under the Japanese military protection, and as a result, its
civilian government was replaced by a IJA governor. The Merdeka War was indeed
a great event which altered the fates of the STP regime and Taiwanese people.
The STP base gained the opportunity of expulse Lin Mao-seng from the party, and
at the same time, the interruption of the civilian government allowed other
political forces, until then in the shadows, to emerge.
There was another far reaching consequence
of the Merdeka War: the immediate independence granted to Indonesia left the
Japanese government without arguments in pro of the continued colonial status
of Taiwan. In June 1959, the renovated Taiwanese National Assembly and the
Imperial Japanese Government concluded the Taihoku Agreement, that fixed the
date of Taiwanese independence: January 1st 1960.
Independence:
January 1st 1960 saw Taiwan
transform itself from a colony to a independent country. Immediately after the
ceremonies and the month-long popular celebrations, Taiwanese soldiers as well
as civilians started to return from the Japanese Empire. On the other hand, the
withdrawal of Japanese in Taiwan to Japan proper also began. At the end of the
Merdeka war, total Japanese population in Taiwan, including 166,000 soldiers,
was about 688,000. The new Taiwanese government ordered to have a "Liason
Office for Repatriating the Taiwanese and Japanese citizens" organized.
The emigration began with military personnel which was completed in February
1960. About 200,000 Japanese expressed desire to stay in Taiwan. But both the
Imperial Japanese and the Taiwanese Governments did not permit large numbers of
Japanese to remain in Taiwan, and in addition, as social disorder including
inflation started to happen in Taiwan, by March of 1960, most of the Japanese
had wished to be repatriated.
Another event took place then. On February
10, 1960, the "Taiwanese-Japanese Mutual Defense and Assistance
Agreement" was signed, and a Military Aid and Assistant Group (M.A.A.G.) was
dispatched to Taiwan and began operation in May. In addition, a
"Taiwanese-Japanese Mutual Defense Treaty" was also concluded in
December, 1960; in response to China's assertions that "Taiwan is a part
of China". This defense treaty had been renovated every five years until
today.
Independent Taiwan:
Immediately after independence, for a
period of about five years, Taiwan economy was extremely chaotic. However,
since the independence process was a peaceful one, Taiwan's relationship with
Japan was preserved, and Taiwan was free to participate of improving Japanese
economy. That was how the STP regime had been
able to look after the reconstruction of Taiwan economy and later
achieved an almost "miraculous" economic developments, although there
were other causes which made the economic achievements possible.
First of all,there were the futile lands
and diligent residents: In the era of agriculture centered economy, Taiwan was
blessed with futile lands and natural environments, as it had been said:
"one harvest is good enough for three year's livelihood". In April
1960, the renovated Social Taiwanese Party government regime had adopted the Japanese model of land reform. Besides, the
residents, who were mostly descendants of the Chinese immigrants, had nothing
but to depend upon their own efforts and abilities in order to survive in the
new land, because the protection granted by the state was very meager in the
first years. This had brought up the hard-working and thrifty spirit. In
addition, the political monopoly enjoyed by the STP led the Taiwanese away from
politics and leant toward economy. As a result, Taiwanese economy is supported
by the Taiwanese who operate medium and small-sized enterprises today.
There were also the
"inheritances" succeeded from Japan: though colonized by the Japanese
for fifty years, Taiwan had accomplished modernization under colonial rule.
After an inspection trip to Taiwan at the "Exposition Commemorating the
40th Anniversary of Japanese Rule over Taiwan" which was held in October
1935, a management group of KMT's Amoi city and Fukien provincial governments
have praised highly on the situation in Taiwan in their "Inspection Report
on Taiwan". The report, written by stern critics of Japanese imperialism,
was worthy of notice as a testimony of Taiwan's success in modernization under
colonial rule. At the time when Japan gave up, Taiwan was already at the
doorstep of industrialized society, the infrastructural construction, promotion
of industrial developments and spread of education, etc. were unrivaled by any
other developing countries which had also undergone colonial rules but became
independent countries later.
As of 1965, Taiwan economy had
continuously been so successful that it was regarded as "miracle".
The GNP per national had kept increasing proportionally from 7.500 yen in 1950
to 950.000 yen in 1988, reached the level of "high income (DM 6000)"
category defined by the Deutsche Bank. Later in 1992, the GNP per head had
risen to as high as 1.500.000 yen. Taiwan was taken notice as a "nation of
wealth". However, Taiwan economy, which appears to be going well, is not
without problems. As for one, it depends too much on export, expecially depending
upon the U.S. market.
After 1980's, due to wage increase,
stagnant international trade and catchups by the developing countries, Taiwan's
export became dull, particularly noticeable from 1988. Moreover, because of
imbalance of trade between Taiwan and the United States, the pressure seeking
correction by the United States grew stronger, and forced Taiwan to accede to
the demands of import liberalization, reduction of customs duties, opening of
service industry and protection of intellectual property rights, etc. Further
in 1989, due to the cancellation of the general special privilege (G.S.P.),
Taiwan's competitiveness in export to the United States had dropped sharply.
This was related to the abrupt declination in Taiwan's economic growth after 1989.
In order to reduce the dependence on the United States even if for a little,
Taiwan tried to disperse the destination of its export products, and realized
the export to newly independent countries after the final collapse of the
European colonial empires. But after all, it was not a scale big enough to
replace the U.S. market of the past.
Japan's "subcontractor
structure" is also a serious problem. Japan has continuously been the top
of Taiwan's import, and is also top in Taiwan's trade deficit. Looking at 1989
for an example, of the total import from Japan, approximately 90% were
machineries and equipments (53%) and industrial materials (34.2%), both of
which were indispensable to the processing of products for export. Since about
80% of parts and materials for Taiwan's export-processing products were
imported from Japan, and as increased export would result in increase of trade
deficits to Japan, Taiwan economy which chiefly dependent upon export literally
became a "subcontractor structure" under Japan. Furthermore, a great
part of trade surplus obtained from export have been making up for the trade
deficit to Japan. Synchronizing with the increase of Taiwan's trade surplus,
the trade deficits to Japan also increased from year to year: 1.149.106.500.000
yen in 1990, 1.450.410.000.000 yen in 1991, it had reached 1.395 billion yen in
1992. In an effort to reduce the trade surplus to Taiwan, the Ministry of
Agriculture, Commerce and Industry of Japan was transferring high-tech
industries to Taiwan, expecting that it would bring "boomerang
effect" with import of the finished products to Japan. Nevertheless, the
"subcontract structure", which was nearly fixed, has not been so easy
to rectify.
The Chinese problem:
The Kuomintang regime has held fast to the
fictions that "Republic of China is the only China" and "KMT
regime is the legitimate government of China". With the entry of the Republic of China to the new League of
Nations in October 1971, a good number of the countries in the international
community rushed into establishing diplomatic relations with China, and severed
diplomatic relations with Taiwan. Japan, which had been relied most, also
normalized its non-governmental relations with China in January 1979 and cooled
its diplomatic relations with Taiwan. Most of these countries, although severed
diplomatic relations with Taiwan, have maintained non-governmental relations
with Taiwan. For instance, through the U.S.'s "Cultural Exchange
Association" office in Taiwan and the representative's office of Taiwan's
"East-Asian Relations Association" in the U.S., substantial exchanges
between the two countries are being conducted.
But for Taiwan, which depends much of its
economic activities on international trade, many problems get in the way when
having economic exchanges with countries that it does not have diplomatic
relations. It is not difficult to understand how much hardship Taiwanese
businessmen were compelled to go through in obtaining a visa for export
destination . In the period of twenty some years since 1971, Taiwan had exerted
itself in promoting international trade under such unfavorable condition, and
is worthy of praise that it has grown to be the world's No.13 trade nation.
However, as long as the diplomatic isolation continues, Taiwanese economy is
apt to be influenced by it.
The tendency of increasing trade with
China may also present a problem in the future. By 1990's, the hostile
relations with China were changed for the better, and after November 1999,
Taiwan nationals have been allowed to travel to China. At the same time,
investment in China has become brisk, and relay trade through Hong Kong has
increased every year. During the four years from 1997 to2000, there was a
tendency of abrupt increase in the trade between Taiwan and China which shows
44.1% averaged increase rate in export from Taiwan to China, and 54.8% from
China to Taiwan. In 2000, the amount of bilateral trade has exceeded 600
billion yen, and the same has reached 868.5 billion yen in 2001, of which
export from Taiwan to China was 499 billion yen while import from China was
169.5 billion yen.
In a situation as such, the "Three No
Policy" towards Taiwan, that is "no negotiation, no compromise, no
contact", has lost its meaning. Although Chinese market is very attractive
in making-up for the loss of U.S. markets, especially when there is no strict condition,
but Chinese government claims that "Taiwan is a part of China" and
insists on "unifying" it sooner or later. If Taiwanese economy
excessively depends upon the Chinese market, there is the danger of being
controlled and encroached upon by China. Obviously, Chinese government intends
to induce Taiwan to become economically dependent upon China, and by promoting
close economic cooperation today, it aims for a political
"unification" in the future.
A new political landscape:
In the general elections of 2001, the
Social Taiwanese Party lost its preeminent political place, when a coalition of
centrist and rightist political parties, known as “New Taiwan” won with 71% of
the ballots. Immediately, the NT began a thorough reform of the Taiwanese
situation: politic (but no economic) relations with China were cooled, the
military relation with Japan and Indonesia was modified, signaling the will of
take charge of its own defense; and most important, a good number of
state-owned business was sold to private investors, in order of reanimate the
economy. Such reforms have been welcomed by the Taiwanese people, and it seems
that their near future is completely secured.
Economic overview:
Taiwan has a dynamic mixed-base economy
with gradually decreasing guidance of investment and foreign trade by
government authorities. In keeping with this trend, some large government-owned
banks and industrial firms are being privatized. Real growth in GDP has
averaged about 4.8% during the past three decades. Exports have provided the
primary impetus for industrialization. Agriculture contributes 10% to GDP, down
from 35% in 1960. Traditional labor-intensive industries are steadily being
moved offshore and replaced with more capital- and technology-intensive
industries. Taiwan has become a major investor in China, Thailand, Indonesia,
the Philippines, Malaysia, and Vietnam; 50,000 Taiwanese businesses are
established in China.
