The Story of Taiwan Chiang Kai-shek, defeated by the CCP fled in to Taiwan with over US$ million in gold reserves and crates of priceless art treasures and established the Republic of China. Taiwan had been a Japanese colony since the Chinese ceded it after the - war with Japan. The Cairo Declaration ( ) and the Potsdam Proclamation ( ) restored sovereignty to China. Massive demonstrations in February had led the GMD to brutally kill a whole generation of leading figures.
The GMD, under Chiang Kai-shek went on to establish a repressive government forbidding free speech and political opposition and excluding the local population from positions of power. However, they carried out land reforms that increased agricultural productivity and modernised the economy so that by Taiwan had a GNP second only to that of Japan in Asia. The economy, largely dependent on trade has been steadily growing, but what is important is that the gap between the rich and poor has been steadily declining. Even more dramatic has been the transformation of Taiwan into a democracy.
It began slowly after the death of Chiang in and grew in momentum when martial law was lifted in and opposition parties were legally permitted. The first free elections began the process of bringing local Taiwanese to power. Diplomatically most countries have only trade missions in Taiwan. Full diplomatic relations and After the Reforms, the Chinese were able to buy consumer goods freely.
embassies are not possible as Taiwan is considered to be part of China. The question of re-unification with the mainland remains a contentious issue but “ Cross Strait” relations (that is between Taiwan and China) have been improving and Taiwanese trade and investments in the mainland are massive and travel has also become easier. China may be willing to tolerate a semi-autonomous Taiwan as long as it gives up any move to seek independence.