Chiang Kai-shek - Dictator of Taiwan
In the two previous articles, we talked about the origin and political career of Jiang Jieshi (Jiang Zhongzheng, Chiang Kai-shek), who began his career as a devoted supporter of Sun Yat-sen and sometimes entered into a forced alliance with the communists, sometimes fought them fiercely. Having suffered a defeat in mainland China, he moved to Taiwan, introduced martial law on this island and ceased to be an independent political player, completely coming under the patronage of the Americans. Today we will continue and finish this story, talk about economic reforms, the peak of which came during the reign of Chiang Kai-shek's son - Chiang Ching-kuo. About two concepts of relations between Taiwan and the PRC: "one country - two systems" or "one country - two territories"? And also about the crisis of the Kuomintang party, which yielded primacy to the Democratic Progressive Party of Taiwan.
"Another China"
So, having suffered defeat at the hands of Mao Zedong's troops in mainland China, Chiang Kai-shek moved to Formosa (Taiwan) and was able to hold on to the island only thanks to brutal repression and American help. The danger came not only from Communist China. The population of this "beautiful island" was so unhappy with the newcomers that martial law had to be introduced, which lasted until July 14, 1987 - and this circumstance somehow does not fit with the propaganda myth of the happy and serene life of the Taiwanese under the rule of the Kuomintang and Chiang Kai-shek.
One of the results of Japan's victorious war with China in 1894-1895 was that country's acquisition of control over Formosa. And it must be said that the local population, on the whole, was loyal to the Japanese authorities, who, having decided to settle here for a long time, did a lot for the economic development of this island: they invested money in the construction of not only railways, power plants, chemical and textile enterprises, but also schools and hospitals. As a result, Taiwan was significantly ahead of all regions of mainland China in terms of economic development, and it had a solid basis for subsequent transformation into an "Asian tiger". The Japanese prohibited corporal punishment, encouraged the "Imperial Integration Movement" - the use of the Japanese language and Japanese clothing by local residents, and conversion to Shintoism. In 1935, the Japanese authorities even agreed to grant the island some elements of autonomy, and many Taiwanese voluntarily joined the imperial army during World War II. It is not surprising that General Chen, appointed Governor-General of Taiwan by Chiang Kai-shek, was prejudiced against the local residents, considering them all traitors.
On the other hand, the more cultured and educated Taiwanese despised the newcomers, calling them backward savages and even barbarians. And on February 27-28, 1947, an anti-Kuomintang uprising began in Taiwan, which lasted until the end of March of the same year. During its suppression, between 10 and 30 people were killed. The police and soldiers treated students most cruelly; many young people were arrested or even killed simply because they were wearing student uniforms. The immediate cause was the robbery and beating of a poor 40-year-old widow, Lin Jiangmai, by agents of the government's Tobacco Monopoly Bureau.
Huang Rongcan. Engraving "The Horrible Inspection"
Angry mob seizes Taipei branch of Tobacco Monopoly Bureau
In Taiwan, these events are often referred to as the "228 Incident" - from the date the massacre began (February 28 - 02/28).
The Cold War played into Chiang Kai-shek’s hands, as the US and its allies now saw Taiwan as a counterweight to Communist China and even decided to make it a showcase for the Western world in the Asian region. From 1951 to 1965, the Americans alone provided Taiwan with $3,5 billion in aid (in different years, this amounted to between 5 and 10% of Chiang Kai-shek’s GNP): $2 billion went to purchasing weapons and training of Taiwanese army personnel, 1,5 billion were invested in the island's economy.
US President Eisenhower, Chiang Kai-shek and his wife Soong Mei-ling, June 1960.
At the same time, the People's Republic of China and the Republic of China (Taiwan) still formally consider themselves part of "one China", arguing only about where exactly the legitimate government is located - in Beijing or in Taipei. Since the PRC authorities consider Taiwan their province, diplomatic recognition of this island state automatically entails a break in relations with "greater China". In 1979, even the United States made a choice in favor of the PRC. D. Carter then stated:
There is only one China, and Taiwan is part of China.
Reagan later called it a betrayal.
The Republic of China (Taiwan) is recognized by the Vatican and 12 countries: Belize, Guatemala, Haiti, the Marshall Islands, Palau, Paraguay, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Tuvalu, and Eswatini. Another dwarf state, Nauru, chose China in 2024. However, 59 countries, 3 “quasi-state entities” and the European Union maintain ties with Taiwan through economic and cultural missions. Incidentally, the Soviet Union also traded with Taiwan, but not directly, through Hong Kong, Japan, Germany, and some Eastern European socialist countries. True, the volume of trade operations was small; in 1987, for example, it amounted to only $7,6 million.
The beginning of reforms
Chiang Kai-shek was well aware of the precariousness of his position, and on May 20, 1949, martial law was introduced in Taiwan by his order, which lasted for more than 38 years: it was lifted only on July 14, 1987. From July 9, 1949, it was possible to enter the civil service only with a guarantor, who was personally responsible for the candidate's loyalty. According to official data, during the period of martial law in Taiwan, 140 thousand people were arrested, about 4 thousand were executed. In 1998, a law was passed to create a "Compensation Fund for Wrongful Convictions"; by 2014, only 20 people had received compensation.
Realizing that he could not remain in power with bayonets alone, Chiang Kai-shek initiated an agrarian reform in 1953, during which the slogan of his teacher Sun Yat-sen was implemented:
To every plowman his own field.
Poor farmers were given the opportunity to purchase public land in installments. Given the island's favorable climate, this reduced tensions in society and allowed other reforms to be launched under favorable conditions. To force sellers to pay taxes, Finance Minister Zheng Hsien Kun proposed in 1950 to make cash receipts lottery tickets - buyers began to demand receipts from sellers, and within a year, tax revenues increased by 57%.
At the same time, a fight against corruption and abuses by officials was conducted. Foreign trade was stimulated by undervaluing the national currency, reducing trade duties and introducing tax breaks. Young people were encouraged to study abroad – with mandatory return and employment in Taiwanese companies. Then money began to be invested in the development of the food and light industries. And only much later did it come to high technology. Moreover, at first, the new enterprises only assembled finished products from Japanese parts. But back in 1974 – a year before the death of Chiang Kai-shek, Taiwan exported mainly inexpensive clothing, cheap and not very high-quality televisions, radios, tape recorders and calculators.
However, in the same 1974, Pan Wenyuan proposed to the Taiwan government a project to create industrial enterprises for the production of integrated circuits, which turned out to be very successful. He estimated the required investment at 10 million dollars, but this amount was not enough: from 1976 to 1980, the Industrial Technology Research Institute spent 120 million dollars on acquiring licenses for the production of microcircuits abroad. In 1978, the first batch of integrated circuits for electronic wristwatches was released in Taiwan. In 1982, production of domestic telephones, calculators, watches, and electronic toys began. And in 1983, the main profit from foreign trade began to come from the export of electronics. However, let's not get ahead of ourselves.
The first foreign company that decided to move production to Taiwan in 1960 was the American Philco-Ford, which specialized in the production of radio electronics. The reason, as you probably guessed, was the cheapness of the local labor force. The average worker's salary in 1972 was only $1,62 per day, and the income level of the richest 20% and the poorest 20% of Taiwanese in the 60s differed by 15 times. Then the American corporation RCA (Radio Corporation of America) came here, actively cooperating with the Pentagon, fulfilling orders for the army. Other foreign companies followed suit.
Taiwan was also greatly helped by the economic blow to Japanese firms, which the Americans accused of cartel collusion in the 80s, restricting access of their goods to their market.
At the same time, Taiwanese enterprises often acted only as contractors: they carried out orders from foreign companies, and practically did not produce products under their own brands - unlike the same South Korea.
Foreign investment led to rapid growth in industrial production. However, Taiwan's political influence was declining, and, as we recall, on October 25, 1971, the Republic of China was forced to give up its seat on the UN Security Council to the People's Republic of China, Communist China.
Taiwan's economic performance grew rapidly, but it was not until 1974 that the average annual per capita income reached $700. Compared to other Asian Tigers, Taiwan's economic growth has traditionally been ahead of South Korea, but behind Hong Kong and Singapore.
The capital of Taiwan, Taipei, in 1964
Taipei in the 1980s
Taipei in 2015
Transfer of power
Meanwhile, Chiang Kai-shek's health was deteriorating, and by 1972 he had already begun to think about transferring power to his son, Chiang Ching-kuo (who was described in first article). Chiang Ching-kuo was appointed prime minister, but he did not manage to become president during his father's lifetime. The Taiwan dictator died at the age of 77 on April 5, 1975, and was formally succeeded by Vice President Yan Jiagan. But in 1978, as Chiang Caishek had intended, the post of president went to Chiang Ching-kuo (who was also the chairman of the Kuomintang). He remained in this post until his death on January 13, 1988.
President Chiang Ching-kuo
And to perpetuate the memory of Chiang Kai-shek, a memorial complex was built in Taipei in 1980, which, in addition to the mausoleum, contains a museum, halls for temporary exhibitions, a library, as well as a theater and concert hall.
National Memorial Hall of the Republic of China
Statue of Chiang Kai-shek in Yangmingshan National Park
Chiang Kai-shek Memorial Day (April 5) was established, but was abolished by the Kuomintang's opponents in the Democratic Progressive Party of Taiwan in 2007.
Chinese and Taiwanese views on the relationship between these countries
In 1979, Deng Xiaoping proposed the “one country, two systems” formula to build relations with Taiwan.
In September 1986, the aforementioned first opposition party in Taiwan, the Democratic Progressive Party, was created, based on the descendants of emigrants from southern China who settled on the island about 400 years ago, who make up the majority of the island’s population. The leaders of this party immediately declared the need to declare Taiwan’s independence and have since consistently advocated holding a referendum to change the country’s name: in their opinion, the “Republic of China” should become Taiwan. This runs counter to the official line of the Kuomintang, which nevertheless recognizes the potential for closer ties with mainland China – on its own terms, of course. In September 1990, the Kuomintang government of Taiwan put forward its own concept of relations with its large neighbor: “one country – two territories,” which provides for the preservation of sovereignty.
Recently, more and more people in Taiwan believe that their island should develop as a separate state – without looking back at China. According to the latest polls, only 3% of citizens there consider themselves Chinese. Another 28% are ready to agree that, being Taiwanese, they are also Chinese. And 67% identify themselves as Taiwanese.
Taiwan is becoming an 'Asian tiger'
Let's return to economic issues.
In 1980, the UMC Corporation was created on the basis of the above-mentioned State Research Institute of Industrial Technology, which was the first in Taiwan to produce microchips, as well as its own personal computers.
And in 1987, former vice president of Texas Instruments Maurice Chang (Zhang Chunmou), who returned to Taiwan, founded the famous Taiwan Semiconductor Manufacturing Company – TSMC, which offered the most favorable terms of cooperation to such giants as Intel, Apple, Qualcomm, Nvidia, AMD, Marvell Broadcom, MediaTek, Huawei. The result was quite unexpected for many: currently, TSMC is the world's largest chip manufacturer with a total share of the world market of 52%.
Maurice Chang and New York Stock Exchange President W. Johnston, 1997.
In 1987, another very well-known company was created – Acer. In 1988, its owners acquired the Californian firm Counterpoint Computers, which specialized in the development and production of personal computers – and moved production to Taiwan. Then the Dutch company Kangaroo Computer BV was purchased – in 1988, it became the European branch of Acer, which entered into cooperation with the aforementioned Texas Instruments – a joint venture for the production of microcircuits was created. In the first half of the 1990s, Acer began to promote its own brand, and personal computer production lines were opened in 32 countries. BenQ became a structural division of Acer, which then “gained independence” from the “parent” company. In 2005, it bought a subsidiary company producing mobile phones from the German concern Siemens, and in 2007 it was renamed Qisda (Quality Innovation Speed Driving and Achievements), and currently has five structural divisions. DMS specializes in the production of displays and projectors (and accounts for 49% of revenue), Brand continues to produce electronic devices under the BenQ brand (27% of revenue). Less significant are Material (production of optoelectronic films), Networks (development, production and sale of network equipment) and Medical.
In 1989, ASUSTeK Computer Inc., better known as Asus (the name comes from the word Pegasus), was founded. In 1993, a motherboard for the Pentium processor was developed there, and thanks to cooperation with Intel, by 1995, ASUSTeK Computer Inc. became the world's largest manufacturer of motherboards. In 1997, the Asus P6300 laptop was released here, and in 1999, video cards for Nvidia were produced. Since 2003, phones have been produced, and since 2005, LCD TVs.
In 1997, the HTC corporation was founded, which initially produced laptops and pocket personal computers, and since 2008 began producing smartphones, and since 2017 – augmented reality helmets.
Since 1986, Gigabyte has been manufacturing motherboards, video cards, personal computers and laptops.
Taiwanese firm MediaTek Inc. is currently the leader in smartphone chipset production, accounting for 32% of global production.
United Microelectronics Corporation is the world's third-largest manufacturer of semiconductor circuits.
Foxconn is the world's largest contract electronics manufacturing company, with a total workforce of about one million, 800 of whom work in Taiwan.
But at the same time, Taiwanese usually receive complex technological equipment for their factories from Japan, the Netherlands and the USA. And the main importer of Taiwanese electronic products is currently mainland China, which spends more money on semiconductors than on purchasing crude oil (in second place is the USA, in third place are the countries of the European Union). Taiwanese investment in production in mainland China from 1991 to 2023 amounted to 206,37 billion dollars. Reverse investment (of Chinese companies in the Taiwanese economy) is traditionally about 10 times lower.
In early 1990, the Taiwanese government lifted restrictions on direct trade and investment in the USSR, and in September 1992, Yeltsin signed the Decree "On Relations between the Russian Federation and Taiwan," which is still in effect. In 2014, trade between the countries reached its peak of $4,961 billion. By 2015, Taiwanese investment in Russian enterprises amounted to $275,3 million, and Russian investment in Taiwan's economy was $105,9 million.
In 1992, Taiwan's per capita GNP approached $10, which put it on par with other economically developed countries.
For many years, Taiwan's rapidly growing cities looked much more modern than even the largest metropolises of mainland China. However, the rapid growth of the PRC economy has led to the fact that now its megalopolises seem to be the "cities of the future", and, in the opinion of many, even Taipei (whose reputation is still trying to somehow support the 101-story tower) and Taichung (Taiwan's largest city) already seem hopelessly provincial compared to Shenzhen, Shanghai or Chengdu.
Taipei in 2017
Taichung, 2015
Shenzhen, 2007
Chengdu, 2020
Shanghai, 2017
In 2000, the Kuomintang lost power, losing the elections to the aforementioned Democratic Progressive Party. In 2008, it managed to regain its lost positions, but in 2016, the chairwoman of the Democratic Progressive Party, Tsai Ing-wen, became president of Taiwan, holding this post until 2022.
Tsai Ing-wen in a portrait from 2016.
Taiwan's current President Lai Qing-de is also the 13th chairman of the Democratic Progressive Party.
Lai Qingde photographed in 2022
Information