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Taiwan
The People's Republic of China claims sovereignty over Taiwan and regards Taiwan as a province of China. The United Kingdom acknowledges the position of the Chinese Government that Taiwan is a province of China and recognises the Chinese Government as the sole legal government of China. The United Kingdom does not recognise Taiwan as a state and does not have diplomatic relations with Taiwan. The United Kingdom considers the Taiwan issue is one to be settled by the people on both sides of the Taiwan Straits. We are strongly opposed to any use of force and urge both sides to engage in constructive dialogue.
The United Kingdom enjoys a flourishing relationship with Taiwan based on trade, investment, financial, educational, cultural and other exchanges. The information provided below and all references to Taiwan and the Taiwan authorities should be read in this context.
Population: 22.77 million (2005)
Language(s): Mandarin Chinese (official); Taiwanese, Hakka.
Religion(s): Buddhist, Taoist 93%; Christian 4.5%; other 2.5%
Currency: New Taiwan Dollar (NTD)
Major political parties: Democratic Progressive Party (DPP), Kuomintang (Nationalist) Party (KMT), People First Party (PFP), Taiwan Solidarity Union (TSU), New Party (NP).
Government: Multiparty democracy with directly-elected President.
President: Chen Shui-bian
Prime Minister/Premier: Su Tseng-chang
Foreign Minister: James Chih-fang Huang
Membership of international groupings/organisations: Asia Pacific Economic Co-operation (APEC), Asian Development Bank (ADB), Intergovernmental Oceanographic Commission (IOC), World Trade Organisation (WTO), Organization for Economic Cooperation and Development (OECD): Observer status in OECD Committee, Member of the International Association of Judges. GEOGRAPHY
The island of Taiwan is found 100 miles across the Taiwan straits from mainland China. It is 250 miles long and 88 miles across at the widest point. A high and rugged mountain range runs north to south along the island's entire length. This range covers more than half the area of the island, and is the second highest in Asia after the Himalayas. About one quarter of the land area, mainly on the western plain, can be cultivated. The climate is sub-tropical, except for the extreme south, which is tropical. It is affected by the monsoon cycle and rainfall is extremely high, averaging 100 inches per year, falling mostly between late October and March. Summers are hot. The typhoon season lasts from May to November.
HISTORY
Longer Historical Perspective
Taiwan's aboriginal inhabitants arrived in around 1500BC, apparently from the Pacific islands. Chinese settlement began in the 12th century but not in any numbers until the 17th. Many of the Chinese immigrants were from Fujian province, which is just across the straits from Taiwan and whose Min-Nan dialect became what is known as Taiwanese (a dialect of spoken Chinese). The first Europeans to visit were the Portuguese, in 1517, who called Taiwan 'Formosa' (beautiful island). Later, the Spanish and Dutch contested control of the island until the Dutch expelled the Spanish in 1641. The Ming Dynasty loyalist, Cheng Cheng-kung (also known as Koxinga) expelled the Dutch in 1662. Koxinga went to Taiwan to escape the Manchu forces on the mainland which had established the Qing dynasty. Koxinga's forces hoped to use Taiwan as a base from which to re-capture the mainland. Instead, the Manchus defeated Koxinga in 1682.
Taiwan was a prefecture of Fujian province until the late 19th century when, in response to fears over Japanese encroachment, it gained provincial status. Following defeat in the Sino-Japanese War in 1895, Taiwan and Penghu (Pescadores) Islands were ceded to Japan under the Treaty of Shimonoseki. They remained under Japanese rule until 1945 when the Japanese surrendered and the islands were occupied by Chinese Nationalist (KMT) forces. In December 1949, following the Nationalists' defeat on the mainland, the government of the then 'Republic of China' under President Chiang Kai-shek moved to Taiwan, together with approximately two million supporters. The Nationalist (KMT) administration on Taiwan maintained its claim to be the legitimate government of the whole of China and set up a national central government on the island. Chiang Kai-shek held the office of 'President' until his death in 1975. Under his rule, the political system remained virtually frozen for almost 30 years.
Following Chiang Kai-shek’s death Taiwan embarked on a process of reform and gradual democratisation under his son, President Chiang Ching-kuo. In 1986, the main opposition groups came together to form the Democratic Progressive Party (DPP) and were allowed to contest parliamentary elections. They were formally legalised in 1989. Chiang Ching-kuo died in 1987, shortly after Martial Law was lifted. Lee Teng-hui succeeded him as President. Lee was the first Taiwan-born leader of the KMT and was symbolic of evolving 'Taiwanisation' of the KMT. Lee introduced a range of democratic reforms, including lifting restrictions of the press and introducing proper elections to the National Assembly. The first direct elections for the office of President were held in 1996. Lee Teng-hui won and continued as 'President'.
Presidential Elections
In March 2000 the DPP candidate, Chen Shui-bian, a former Mayor of Taipei, narrowly defeated James Soong, a former member of the KMT running as an independent to become Taiwan's first non-KMT President.
Opposition leaders, Lien and Soong fought a joint KMT-PFP campaign as Presidential and Vice-Presidential candidates respectively in the Presidential election of 20 March 2004. Chen Shui-bian narrowly won re-election after defeating Lien Chan by just under 30,000 votes.
The next Presidential elections in Taiwan are scheduled for March 2008.
Domestic Politics
Members of the Legislative Yuan (Parliament) are now elected for a four-year term. Despite losing the Presidential election, the Opposition KMT/PFP retained its outright majority of seats following the Legislative Yuan elections held on 11 December 2004. Stalemate in the Legislature has often prevented the Chen administration from implementing many of its planned reforms. Accepting responsibility for the election outcome Chen resigned from the DPP chairmanship.
The KMT held its first direct Chairmanship election on 16 July 2005. Taipei Mayor Ma Ying-jeou won comfortably with over 70% of the vote. Ma took charge of the Chairmanship on 19 August from Lien Chan, who was appointed 'Honorary Chairman' by the Party.
On 3 December 2005 Taiwan held its "three-in-one" elections (County Magistrates, County Councilmen and Township Governors). Voter turnout was a respectable 66.22%. The opposition KMT party scored an overwhelming victory to win 14 out of the 23 available County Magistrate seats whereas the ruling DPP only managed six. This was a setback to Chen's administration, which has also been rocked by a number of recent scandals.
Taiwan Mayoral Elections
On 9 December 2006, Taiwan held mayoral elections in Taipei and Kaoshiung. In Taipei, the KMT’s Hau Lung-Bin gained 54% of the vote with the former-Premier Frank Hsieh polling at 42% for the (DPP). The Kaoshiung election was closely fought, with DPP candidate Chen Chu winning by only 1114 votes or 0.14%. Her main opponent KMT Huang Chen-Ying challenged the result and has filed for a recount. The general media consensus is that it was a positive result for the DPP, with pre-election polls predicting a defeat in Kaoshiung.
The elections also signified a noticeable shift to a two-party system, with the smaller parties performing weakly. In the particular, founder of the Peoples First Party (PFP), James Soong, polled only 4% in the Taipei race, resulting in the veteran politician announcing that he will step down from politics. The party has since announced that it will work with the KMT in forthcoming legislative elections. The change in electoral system for the Legislative elections in December 2007 (single member constituencies) is likely to consolidate this shift.
Constitutional Reform
On 7 June 2005, a 300 member National Assembly, which had played little significant political role since 2000, voted to enact the Constitutional Amendments Bill passed by the Legislature in August 2004. This included abolishing the National Assembly, transferring powers to the Legislature and increasing Legislator terms from three to four years. Chen Shui-Bian has repeatedly declared his desire for further constitutional reform. However, in his maiden inaugural speech in May 2000 Chen made his "four noes, one not" pledge: no declaration of independence; no change of Taiwan's formal name from the Republic of China; no enshrining the description of cross-strait relations as "state-to-state" in nature in the Constitution; and no holding of a referendum on formal independence; not to abolish the National Reunification Council or the National Reunification Guidelines. Many analysts questioned whether he had reneged on the last part when he declared that the Council ‘ceased to function’ in March 2006.
ECONOMY
Over the last three decades, Taiwan has averaged around 8% annual GDP growth while in the process of turning itself into a dynamic capitalist economy becoming one of the Asian 'tigers'. Agriculture, although employing 12% of the workforce, now accounts for only 3% of GDP, compared to 35% in 1952. Taiwan's economic success was initially based on the manufacture of low technology goods. These labour-intensive industries are increasingly re-locating to lower cost bases, primarily in mainland China. Taiwan has successfully moved into higher value added manufacturing and exports, mainly in electronics and computers, which have continued to drive growth. High-tech products account for about 35% of Taiwan's exports (up from 18% in 1991), a higher proportion than that of its competitors (the equivalent figure for Japan is 20% and for South Korea 29%).
Taiwan weathered the 1997-98 Asian Financial Crisis much better than most of its neighbours. This reflected its lower dependence on external borrowing, and the strength and flexibility of the economy. Small and medium sized companies still make up a significant proportion of the economy. They are able to adapt quickly to changing conditions.
Taiwan fared less well in the world economic downturn in 2001. The slowdown in the US and a worldwide slump in demand for electronics products, hit Taiwan badly in 2001. Real GDP growth in 2001 was minus 2%, the first full-year decline in half a century. Exports declined by 17% and imports by 23%. Recovery was slow with growth of just 3.5% in 2002 and 3.4% in 2003. However growth for 2004 reached 6.07% and exports were up by 20.7% over 2003. Enjoying substantial trade surpluses (US$6.14bn in 2004), Taiwan's foreign reserves are the fourth largest in the world (amounting, excluding gold, to US$251.1 in March 2005). Taiwan has become a major regional investor, particularly in mainland China. In 2002 Hong Kong and mainland China, overtook the United States as Taiwan's main export market.
Basic Economic Facts
GDP: 346bn (2005); USD 363.3bn (2006 f)
GNP per capita: USD 15,676 (2005 ); USD 16,423 (2006 f)
Annual Growth: 4.09% (2005); 4.31% (2006 f)
Inflation: 2.3% (CPI, 2005); 1.1% (2006 f)
Unemployment: 4.13% (2005)
Major Industries: electronics, petroleum refining, chemicals, textiles, iron and steel, machinery, cement, food processing.
Major trading partners: China, Hong Kong, Japan, US, South Korea, Singapore, Germany.
Foreign Trade: (2005, visible) exports US$189.4bn, imports US$181.6bn.
Exchange rate: 1 US$ = NT$32.75 (August 2006); £1= NT$62.065 (August 2006)
Cross-Straits relations
Despite the establishment of the People's Republic of China in 1949, the Nationalists, though confined to Taiwan and a few smaller islands, still claimed to be the legitimate government of China, as the 'Republic of China'. Both sides considered the civil war not to have ended and continued an exchange of fire and later propaganda leaflets between the mainland and the offshore islands of Kinmen and Matsu into the 1970s. In 1991, the Taiwan authorities declared that the 'Period of Communist Rebellion' had come to an end, signalling that they considered the civil war to be over.
From 1979, the PRC developed the concept of 'one country, two systems' and put forward a series of proposals for reunification which would allow broad autonomy for Taiwan in return for it giving up claims of statehood. Taiwan refused to respond to these overtures, but in the 1980s began to relax restrictions on contacts with the mainland. In 1986, the first direct talks between the two sides were held in Hong Kong, to discuss how to deal with the hijacking to the mainland of a China Airlines (the Taiwanese 'national' carrier) flight. Taiwan allowed family visits to the mainland in 1987.
The level of political contact between China and Taiwan was raised in 1993 when representatives of non-official liaison bodies - China's Association for Relations Across The Taiwan Straits (ARATS) and Taiwan's Straits Exchange Foundation (SEF) met in Singapore. This was the highest level contact between China and Taiwan since the end of the civil war and marked a significant new stage in the relationship. While the meetings did not result in a political breakthrough, they did show incremental progress in practical issues. Reports of a consensus on the 'One China' Principle later proved difficult to sustain.
Talks broke off in June 1995 when Lee Teng-hui visited the United States. China believed that the United States had reneged on a promise not to let the visit go ahead. Tensions further increased when the PRC conducted military exercises in the Taiwan Straits and launched unarmed missiles off the coast of Taiwan in 1996 in advance of the island's first direct elections for President. Formal cross-straits dialogue between the heads of ARATS and the SEF resumed in October 1998. However, talks were again broken off in July 1999 following Lee’s statement that Taiwan-China relations were 'state-to-state' in nature.
From mid-2000 until mid-2002 there was a gradual lessening of tensions across the Taiwan Straits, but no new formal talks. In July and August 2002 Chen spoke of Taiwan 'going its own way' and of the existence of 'one country on each side of the Taiwan Straits'. This angered the Chinese who saw these remarks as a repetition of Lee Teng-hui's 'state to state' pronouncement.
China has been highly critical of Chen Shui-bian and his predecessor Lee Teng-hui because of their pro-independence leanings. China refuses to resume direct political contacts with Taiwan until it accepts a 'One China' formula as a precondition for negotiations. Taiwan's political parties have different positions on how to approach negotiations with the mainland, but all insist that the 'Republic of China' is a separate political entity from the PRC Government.
Although China has sought reunification through negotiation, the Chinese have not renounced the threat of military action against Taiwan.
China enacted its anti-secession law on 14 March 2005 to, 'oppose and check' Taiwanese independence. The anti-secession law reiterates the 'one-China' policy and sets out certain measures to maintain peace and stability in the Taiwan Strait and to promote cross-strait relations. But it also authorises the use of 'non-peaceful' means if peaceful reunification fails.
Despite the political stalemate, economic and people-to-people links continue to develop at an impressive rate. Some 450,000 Taiwanese business people and their families are said to be living in the Shanghai area alone. Although direct trade is still prohibited, Taiwanese investment in China is substantial: Taiwan's exports to mainland China and Hong Kong amounted to a record US$ 71.6 bn while imports totalled US$21.81 bn for 2005. Additionally, New Taiwan dollar-RMB currency exchange services were officially opened in October 2005 on a trial basis on the outlying islands of Kinmen and Matsu.
Recent Developments
Direct transport links between Taiwan and the mainland have been suspended since 1949 following the Chinese civil war. Special cross-Strait Lunar New Year charter flights were launched on 29 January 2005. The flights, which covered the Lunar New Year Period, were not required to stop in a third location en route although they were required to pass through Hong Kong airspace. Following further negotiations, it was agreed, on 14 June that there would now be regularisation of cross-Strait charter passenger flights for special holidays, special charter cargo flights and the operation of charter services for emergency medical needs and humanitarian purposes. Dialogue continues.
Several recent visits by Taiwanese opposition political parties to the Mainland have signalled a new development in party-to-party cross-Straits negotiations. Former KMT Chairman, Lien Chan, made a landmark visit to the Mainland in April 2005 and met with President Hu Jintao. Following the meeting, a joint communiqué issued agreeing 5-points: the resumption of cross-Straits negotiations based on the '1992 consensus'; establishment of a 'military mutual trust mechanism'; establishment of cross-Straits common market; promote consultations on Taiwan’s participation in international activities; and establishment of periodic party-to-party contact and other exchanges. On 5 May, PFP Chairman, James Soong arrived in China for similar talks.
On 1 March 2006 the EU released a statement noting concern over Chen Shui-bian's decision to "cease the functions" of the National Unification Council and "cease to apply" the National Unification Guidelines. This decision appeared to be at odds with Chen's "four noes, one not" pledge made during his inauguration speech in 2000.
Following increasing revelations about insider trading and other scandals involving advisors to Chen Shui-Bian and his own son-in-law, the opposition parties launched a motion to recall the President in May 2006. In response he announced that he would devolve power over domestic issues to the Premier and withdraw from discussions on party issues. Requiring approval by 2/3 of the legislature, the motion failed as Chen’s own party and the smaller TSU both opposed the motion. A further attempt took place in October 2006, again failing. During this time regular pro and anti Chen rallies took place in Taipei. On 3 November 2006, the first lady, Wu Shu-jen, and three presidential aides were indicted with corruption charges. This has led to a third recall motion against Chen Shu-bian. He has vowed to resign if the first lady is convicted.
Role of the United States
In 1979, after the US switched its recognition from Taiwan to the PRC, the US Congress passed the Taiwan Relations Act. It states that the US decision to establish diplomatic relations with the People's Republic of China rested upon the expectation that the future of Taiwan will be determined by peaceful means and the US would view any effort to resolve Taiwan’s future by any other means with grave concern. It also states that the US will provide Taiwan with arms of a defensive nature.
During the visit of Chinese Premier Wen Jiabao to the US in December 2003, President Bush said: 'We oppose any unilateral decision by either China or Taiwan to change the status quo, and the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally, to change the status quo, which we oppose.'
On 19 February 2005 the US and Japan jointly issued a statement which listed Taiwan as a common security concern. It said that in the region one of its common strategic objectives was to encourage the peaceful resolution of issues concerning the Taiwan Strait through dialogue.
In May 2006, Chen Shui-Bian refused to transfer via the US on the way to meetings with diplomatic allies in Central and South America. The US had reportedly refused Chen’s request to transfer via New York, instead offering transfer via Anchorage, Alaska. Some saw this as an indication at US displeasure at Chen’s recent moves with regard to the National Unification Council.
Relations with the International Community
Following the communist victory in 1949 most countries recognised the PRC. However a significant number, including the United States continued to recognise the 'Republic of China' authorities on Taiwan as the lawful Government of China. The balance shifted significantly in the early 1970s as China's relations with the US and other Western countries began to improve. The United Kingdom established diplomatic relations with the PRC in 1950 but maintained a consulate in Taiwan, accredited to the Provincial rather than central authorities, until 1972 when relations with the PRC were upgraded to full ambassador level. The PRC took over China's seat at the UN in 1971.
The number of countries with which Taiwan has diplomatic relations now numbers 24 (12 in Latin America, six in Africa, five in the Pacific and one in Europe - The Holy See). Taiwan has representative offices in 62 countries, without diplomatic status. China has also opposed Taiwan's participation in international organisations in which statehood is a prerequisite. It has sought to limit Taiwan's participation in other international organisations, insisting it do so under a name other than the 'Republic of China'. Taiwan is a member of APEC and the ADB under the titles 'Chinese Taipei' and 'Taipei, China' respectively, and joined the WTO in 2002 under the title 'The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu', or Chinese Taipei for short.
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