Henry C K Liu

Part 1: Two nations, worlds apart
Part 2: Cold War links Korea, Taiwan
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Part 3: Korea: Wrong war, wrong place, wrong enemy
Part 4: 38th Parallel leads straight to Taiwan

Part 5: History of the Taiwan time bomb

This article appeared in AToL on January 29, 2004

In 1949, having suffered across-the-board reverses in the civil war against the Chinese communists as a result of dwindling popular support despite massive military and economic aid from the Unites States, the government of the Republic of China (ROC) under the control of the Nationalist Party, or Guomindang (GMD, known as the Kuomintang, or KMT, on Taiwan), abandoned the Chinese mainland and fled with its core loyalists to Taiwan, a Chinese territorial island 90 miles off the shore of Fujian province.

From its exiled position, the ROC then entered into a defense treaty with the US, as a collateral development of the Korean War.

An "economic miracle" on Taiwan was subsequently nurtured by insatiable demands from US logistics needs in the Korean and Vietnam wars. Authoritarianism, a traditional cultural fixture of Chinese civilization - enhanced with the imposition of an Emergency Decree in 1949 - placed restrictions and limitations on civil rights, including freedom of political speech, freedom of the press and publication, right to peaceful assembly, and freedom of association. Although civil rights were guaranteed by the ROC constitution, they never were implemented by the government even before its arrival on Taiwan, and this freezing of basic liberties allowed GMD one-party rule to promote economic development in its new home in a "stable" political environment.

The Emergency Decree, a martial law in all but name, was not lifted until October 15, 1986 - 37 years after its imposition. The ROC held its first popular election on Taiwan for president and vice president of China in March 1996, 47 years after it left the mainland. It was an election of questionable legitimacy, producing a "president" of China through a local election by 21 million people in a country of 1.4 billion, making democracy a pathetic joke. The local election in reality produced a governor of a province of China who took on the delusional pretension of being the president of China.

Freedom and democracy, which have never existed on Taiwan in its entire history, including the 47-year period between 1949 and 1996 under the GMD, had not been the reason for US support of Taiwan during that time, nor could any credit be given to freedom and democracy for the Taiwan "economic miracle" of that period. In fact, evidence suggests that freedom and democracy were the result rather than the cause of rising economic prosperity on Taiwan, which had been the product of international geopolitical conditions and near-dictatorial home rule.

Brutal battles between the forces of the ROC and the People's Liberation Army (PLA) of the People's Republic of China (PRC) continued in the Battle of Quemoy at Kuningtou in 1949 and the Battle of Tachen Islands in 1954-55. In 1955, the PLA captured Yijiangshan Island, wiping out ROC forces stationed there. The two sides continued fighting on Kinmen, Matsu, and along the mainland Chinese coast, even extending to some mainland coastal ports. This was the first "Taiwan Strait crisis".

To facilitate progress in the Korean armistice negotiations, the 125-ship US 7th Fleet had been withdrawn on February 2, 1953, five months before the signing of the armistice. This was ordered by president Dwight D Eisenhower, who said that "the 7th Fleet [would] no longer be employed to shield Communist China" from possible attack by Nationalist Chinese forces. He added: "We certainly have no obligation to protect a nation fighting us in Korea."

During the Battle of the Taiwan Strait of August 23, 1958, the 7th Fleet re-entered the Taiwan Strait to support GMD forces against the PLA, because five years after the Korea armistice had been signed, GMD forces were again losing the initiative. An honorary badge of meritorious service was awarded by the government of the ROC on Taiwan to US military personnel for operations off Quemoy and Matsu and in the Taiwan Strait between August 1958 and June 1963. After the Battle of the Taiwan Strait, although sporadic skirmishes and minor sea battles continued, tensions between the two sides of the unfinished civil war gradually eased and the frequency of direct military clashes subsided after 1965.

US placed Taiwan on diplomatic life-support

Underpinned by diplomatic life-support from the US, the ROC on Taiwan continued to maintain official relations with most Western-bloc governments for two decades, except with Britain under a Labour government, which quickly recognized the PRC in 1949. At the United Nations, the ROC continued to be recognized, albeit as a fantasy, as the sole legitimate government of China until 1971. With its expulsion from the UN that year as a result of US-China rapprochement, the international status of the exiled ROC finally caught up with reality, and the number of countries that maintained diplomatic relations with Taipei declined sharply. Once more than a hundred, they were reduced to a handful of small, diplomatically insignificant nations whose recognition was bought with cash.

Official ROC historiography justifies the role of authoritarianism in promoting economic development, a strategy it notes as common and natural in developing countries. By definition, an authoritarian government does not tolerate any challenge to its power or policies. Still, an authoritarian system must operate within rational limits in the service of societal goals. ROC leaders pointed out that the authoritarian political system and industrial policy that operated in the early stages of Japan's modernization proved to be extremely efficient in getting Japan on the path toward successful economic development. Similarly, the ROC applied an authoritarian system in Taiwan to promote "modernization". The growth of Taiwan's economy in this period stood as one of the world's development successes, with per capita annual income rising from less than US$100 in 1949 to $186 in 1952 and to $1,193 by 1977 - a more than tenfold increase in less than 30 years.

Freedom, democracy and free markets had very little to do with Taiwan's economic success. ROK historians claim that the Emergency Decree had only a minor negative impact on everyday life or personal freedoms unrelated to politics. They argued that it produced visible benefits with respect to safeguarding the security of the ROC on Taiwan and promoting its economic growth. History is replete with examples of democracy before prosperity turning into dictatorships.

Restrictions were placed on the formation of new political parties on Taiwan to prevent multiparty politicking that would divide a nation's strength and political will. These restrictions not only prevented inter-party clashes and intra-party factional power struggles, but also allowed the government to maintain unity and harmony. The Emergency Decree prohibited strikes by workers, students, and shopkeepers, and forbade mass demonstrations and protests, allowing the government to maintain what GMD loyalists described as "an ordered society and stable political environment". Indeed, GMD loyalists assert to this day that there are still many on Taiwan who long for the stability under the Emergency Decree.

With the Emergency Decree restricting the formation of opposition political parties, the GMD ruled under a one-party system. The only legal non-opposition parties were the Young China Party and the China Democratic Socialist Party, both weak and non-influential. There were also independent candidates - commonly referred to as tangwai, or party outsiders - who sometimes challenged low-level GMD candidates in local elections and occasionally emerged victorious.

This one-party system had a positive impact on Taiwan's security and economic development. The GMD became a powerful institution capable of gradually binding together diverse socio-economic forces. The party's firm control of key political, economic, and social resources made it possible to assimilate, in an orderly manner, new groups into the political system, and its long reign in power allowed stability to be maintained in party mechanisms and personnel. The consistency and continuity of policies allowed long-term and future-oriented plans to be formulated and executed. The GMD recruited new talented party members from different cultural groups and various social strata, integrating mainlanders, native Taiwanese, Hakka and aborigines, all of them as Chinese nationals, and it internalized democracy within party politics. In that sense, the GMD on Taiwan at that time exhibited characteristics similar to those found in the Chinese Communist Party (CCP) today.

Economic development led naturally to increased political participation by those seeking to resolve tension and conflicts between newly emerged socio-economic groups. Prosperity enriched political and social resources, and drew into politics many who competed for the fruits of economic success. Rapid economic growth also led to greater population mobility in Taiwan, with students and young workers flocking to metropolitan areas. This migration phenomenon undermined traditional social institutions and altered feudal bonds. The resultant urban population became self-centered and vocally disgruntled with authoritarian feudal politics.

Taiwan's nouveaux riches demanded political power

A nouveau riche class created by rapid economic development started participating in politics in order to secure its financial gains and its rise in social status by demanding more political power. Universal education in Taiwan, fueled by the GMD-controlled government's implementation of a compulsory nine-year education policy, raised political consciousness along with marketable skills.

When the government proved incapable of fulfilling rising political demands, these new social forces exploited every opportunity to increase their influence on public opinion, putting pressure on an inert government. Many developing countries face similar problems of rapid economic development sharpening public expectations of government, which in turn creates political instability as the government finds it increasingly difficult to respond to and meet rising public demands. This phenomenon of rising expectations dominated the domestic political climate in Taiwan during this period of rising prosperity.

Until 1986, Taiwan politics was in effect controlled by one party, the GMD, the leader of which also was the ROC president. Many senior government officials were party members. The party claimed more than 2 million active members, and its net assets were reputed to total more than NT$61.2 billion (US$2.5 billion at the 1986 exchange rate), making it the richest political party in the world. On October 15, 1986, five years after US recognition of the PRC as the sole government of China, the GMD Central Standing Committee on Taiwan sought a new tactic beyond anti-communism to preserve US support - it made top priority the lifting the Emergency Decree and the ban on new political parties.

Ten months earlier, on February 25, 1986, Philippine president Ferdinand Marcos, after decades of rule by martial law, was forced by popular uprising abruptly to flee the presidential palace in Manila with his wife Imelda, and their 60-member entourage, for exile in Hawaii. His ouster had a sobering effect on Taiwan president Jiang Jing-guo. If the US would sacrifice a longtime anti-communist ally like Marcos in the Philippines, where US proprietary interests had been firmly entrenched for more than a century, what chance would Jiang have on Taiwan without political reform and the US blessing?

The series of Taiwan political reforms that quickly followed included lifting restrictions on newspaper licensing and publishing, passing the Law on (permitting) Assembly and Parades, allowing people to visit relatives on the mainland, re-electing all members of the Legislative Yuan and the National Assembly, ending the Period of National Mobilization for Suppression of the Communist Rebellion, and revising the constitution to allow local direct and popular election of the president, vice president, the governor of Taiwan province, and the mayors of Taipei and the industrial city of Kaohsiung.

However, the election for national office without the participation of an all-China suffrage remained constitutionally problematic. Up to that time, ROC national office holders had been frozen in place with indefinite terms in order to protect their residual legitimacy dating from the time when the GMD ruled the mainland. With the revision of the ROC constitution to permit local election of new holders of national offices, the ROC engaged in a suicidal exercise of abolishing its de jure legitimacy, on top of the loss of its de facto legitimacy when the GMD abandoned the mainland 37 years earlier.

The late president Jiang Jie-shi (Chiang Kai-shek, head of state and of the GMD) allowed token local elections on Taiwan during his authoritarian tenure to appease US liberal distaste for dictatorship. But US support for Jiang was never in danger on account of Jiang's anti-communist role in the Cold War. Jiang Jie-shi was the United States' own dictator "bastard". His son and successor, the late president Jiang Jing-guo (Chiang Ching-kuo), promoted political reforms and gradually opened up the local political system to counteract the adverse impact of US-China geopolitical rapprochement on ties between the US and ROC on Taiwan. He was responding to the new US strategy of abandoning sheltered dictatorial allies in favor of comprador democracies controlled by pro-US local financial elites.

Jiang Jing-guo in his later years lifted the Emergency Decree, scrapping the ban on the formation of new political parties and beginning a localization program within the ranks of the GMD party and the ROC government - following the dictates of US advisers. He did so under pressure from the US recognition of the PRC as the sole legitimate government of China almost seven years earlier. Jiang also following the advice from supporters in the US that a "democratic" Taiwan would make it easier for US domestic politics to continue to support Taiwan - this in spite of its declining geopolitical value to the US as the Cold War wound down and US hegemony through neo-liberal globalization took shape.

Taiwan plays the democracy card for US support

Moralistic imperative was identified as an effective counterbalance to geopolitical imperative. If Israel could lock in US support by claiming to be the only democracy in the Middle East, Taiwan could also play the democracy card. Lee Teng-hui, a native Taiwanese who had never lived on the mainland, and who had been quite happy growing up under Japanese military occupation of Taiwan with a Japanese name (Iwasato Masao), was hand-picked by US advisers as a born-again democrat, the vice-presidential nominee on Jiang Jing-guo's GMD ticket.

Jiang Jing-guo was presented with an offer he could not refuse: enact political reforms or lose vital US support. Continuing US support for Taiwan after the Cold War, framed in a US domestic law in the form of the Taiwan Relations Act, was conditioned on democratization and localization.

Still, Jiang Jing-guo's aim was to retain de facto US support of Taiwan with the introduction of democracy on Taiwan, but not to tolerate any move toward Taiwan independence. The GMD under the younger Jiang would have reached a political settlement with the Chinese Communist Party, many of whose leaders had been Jiang's former close comrades in their youth. But this positive accommodation was made impossible by the firm opposition of the US, which aimed at preventing China from ever regaining control of Taiwan from where it could challenge US interests in East Asia and Southeast Asia.

This geo-military strategy on Taiwan had been outlined clearly during the Korean War by General Douglas MacArthur. It is a policy that the US officially denied and still denies, but which it followed operationally under the guise of containing communism during the Cold War and promoting democracy on Taiwan afterward. Taiwan democracy is seen by the US as the way to keep Taiwan in friendly hands perpetually. The price the US sets for China to regain Taiwan would be for China to be ruled by a pro-US comprador class in the name of market-based capitalistic democracy. The irony is that such a ruling regime would inevitably fail in the Chinese political landscape, as the history of the GMD has proved.

China is not tiny Taiwan; it cannot be manipulated by US power, super or not. To the US, the formidable ROC military can also serve as a proxy fighting unit in case of war in Asia in order to reduce US casualties, the superpower's Achilles' heel. This strategy, first tested in Burma during World War II, was elevated to the level of military doctrine by MacArthur during the Korean War and became deeply imbedded in the mentality of the Pentagon leadership.

Jiang Jing-guo died in office in 1988 and Lee Teng-hui inherited the presidency. Lee, who openly expressed his nostalgic longing for the undemocratic colonial days of Japanese occupation, began to turn Taiwan domestic politics toward Taiwan independence in the name of democracy. The first direct local election for the national office of president of the ROC on Taiwan was held on March 23, 1996. The previous eight ROC presidential and vice-presidential elections were by the octogenarian deputies with indefinite terms in the National Assembly. Incumbent Lee Teng-hui of the ruling GMD won a major victory of 60 percent of the vote against the Democratic Progressive Party (DPP) candidate and independent candidates. What the GMD won in the illegal election was a fifth column in the top offices of the GMD party and the ROC government.

DPP membership is made up largely of Taiwanese natives. The DPP maintains that Taiwan is an entity separate from the mainland. It supports an independent "Republic of Taiwan" as part of its party platform. Recent moderated postures on Taiwan independence by the DPP led to the splinter of hardline advocates to form the Taiwan Independence Party in December 1996. Economics plays a significant role in the independence issue. Japanese colonial occupation policy emphasized agricultural development for Taiwan, with industrial development focused on Korea and Manchuria. The GMD has developed manufacturing on Taiwan with an effective industrial policy.

Taiwanese wary of integrating economy with mainland

To this day, the manufacturing and financial sectors are controlled by mainlanders, with land ownership remaining in the hands of Taiwanese natives who have profited handsomely through the astronomical rise in land value from urbanization and industrial uses. These landowners fear a drop in land value on Taiwan if Taiwan industry is allowed to benefit from wage arbitrage across the Taiwan Strait, robbing the landowners of their new prosperity as well as political power. Factories and banks can be moved to the mainland profitably for their owners, but land cannot. Wage arbitrage produces unemployment in the higher wage location, which on Taiwan falls mainly on Taiwanese natives due to demographics. Falling land value and rising unemployment are the chief economic fears behind the lack of enthusiasm on the part of Taiwanese natives to integrate the Taiwan economy with that of the mainland.

Chinese policymakers in Beijing seem to be aware of this problem, and they try to show, through Beijing's support of real property value in Hong Kong, that Taiwanese landowners could depend on Beijing to protect their economic interests. But so far there is no meaningful full-employment program in Hong Kong to show Taiwan that unemployment will not rise on Taiwan as Taiwanese companies take advantage of low-wage labor on the mainland.

To win over Taiwanese natives, China needs to show that political accommodation between the GMD and the CCP does not translate into economic loss for the Taiwanese natives who dominate the land-owning sector and who make up the bulk of wage earners. A full-employment guarantee by Beijing, for both Hong Kong and Taiwan, would go a long way to defuse this fear harbored by Taiwanese natives. Unfortunately, the "one country, two systems" policy, by allowing market fundamentalism to rule the economies of Hong Kong and Taiwan, precludes the introduction of any full-employment program. Even on the mainland, a full-employment program has not been adopted with full vigor, but it is vital in a world in which full employment has come to be recognized as a political imperative, regardless of economic ideology.

Some on Taiwan mistakenly argue for the right of self-determination for the Taiwanese. Taiwanese natives are all Chinese natives. The only indigenous Taiwanese are aborigines. Self-determination consists of the political and legal processes and structures through which a people gains and maintain control over its culture, society and economy. With the creation of the UN, the self-determination of peoples became an established principle of international law. The principle is embodied in the UN Charter and in both the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. Common Article 1 of these covenants provides that: "All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development."

The UN General Assembly invoked this principle in its 1960 Declaration on the Granting of Independence to Colonial Countries and Peoples, in which it stated that subjection of peoples to alien domination constitutes a denial of fundamental human rights and violates the peoples' right to freely determine their political status and pursue their economic, social and cultural development. This declaration also reaffirmed the principle of the territorial integrity of existing states against separation and secession and gave rise to the so-called "saltwater test" (which limits the rights of self-determination to colonized lands that exist across the oceans from the colonizing country). In accordance with the principle of self-determination and the saltwater test, the UN supported the independence of European and US overseas colonies in Africa, Asia and elsewhere, which were not taken from existing states.

Today, many indigenous communities throughout the world are claiming the right to self-determination. These are peoples, such as native Americans and Australian aborigines, who constitute a "first people", with a prior history of territorial occupation and an ancestral attachment to their land before it was conquered and occupied by others, such as Europeans. Both the UN's Draft Declaration on the Rights of Indigenous Peoples and the Inter-American Draft Declaration on the Rights of Indigenous People provide for the right of self-government or autonomy for indigenous peoples within their states of residence.

But this right of self-determination does not apply to Taiwan.

Next: Forget reunification, nothing to reunite