Travel Reference
In-Depth Information
on refugees comprising soldiers, businessmen, landowners, monks, artists, gangsters,
peasants and intellectuals.
Despite bringing all of China's gold reserve with them, Chiang's regime was broken.
Many predicted it would fall soon to the communists, but the Korean War convinced the
US that Taiwan was too strategically valuable to hand over to the Chinese Communist
Party (CCP). In 1950 US President Truman ordered the US Navy to protect the Taiwan
Strait. US monetary aid followed, and for the next two decades it was vital in keeping the
Chiang government afloat and funding in part or in whole nearly every public works pro-
ject.
Chiang kept alive the hope of retaking the mainland until his death and his rule was
quick to crush any political dissent, real or imagined. However, concurrent with the bru-
tality and paranoia, there were also sound economic reforms that would soon make
Taiwan one of the wealthiest countries in Asia. Among the most famous of these were
US-guided land reforms, which saw rents reduced, leases extended and government land
sold off cheaply. Tenant farmers went from 49% of the total in 1949, to 10% in 1960.
Agricultural productivity rose, which helped fuel more demand for industrial goods. At
the same time, the reforms shifted the huge land capital of Taiwan's gentry class into in-
vestment in small- and medium-sized industrial enterprises. By 1960 industry had once
again replaced agriculture as the largest share of GDP.
The political changes in this era were no less startling. In 1971 the UN Security Coun-
cil admitted the PRC. Chiang Kai-shek responded by withdrawing the ROC. The follow-
ing year, US President Nixon travelled to China to normalise relations. In 1979, under
President Carter, the US switched official recognition from the ROC to the PRC. US
policy towards Taiwan would now be dictated by the Taiwan Relations Act, which al-
lows the US to provide defensive arms to Taiwan, and considers any move to settle the
status of Taiwan with military force to be a threat to US security. The act also officially
ended US recognition of the ROC government.
When Chiang Kai-shek died in 1975, Yen Chia-kan became president for a three-year
term and was then replaced by Chiang Ching-kuo (CCK), Chiang Kai-shek's only biolo-
gical son. CCK had held various positions in the KMT government, including head of the
secret police, and later premier. In the latter role, and as president, he initiated a series of
major infrastructure projects which helped accelerate Taiwan's economic growth and per
capita income.
CCK also began to bring native-born Taiwanese into the highest levels of government.
The most important of these was Lee Teng-hui, who had served as agriculture minister
and Taipei mayor. Lee was appointed vice-president.
