The Taiwanese experience, 1945–1986
After being liberated from Japan’s control in 1945, the Nationalists
from China occupied Taiwan and soon held the most important
positions in Taiwan’s societal center. As an extension of the civil war
in China, corruption and incompetence in the Nationalist government
resulted in a worsening economy and the Nationalists were bitterly
blamed by the local people. The sharp contradiction between the
political center and the centrifugal periphery eventually resulted in
a large-scale revolt in February 1946, which was suppressed with
military force by the Nationalists (Kerr, 1965 ). After that, the island
was controlled by a group of political elites who were mostly from
China. They claimed to be the orthodox regime representing the
whole of China, took advantage of the Korean War (1950–1953) to
obtain aid from the USA, and kept a seat in the United Nations with
the assistance of the USA and its allies. Meanwhile, they proclaimed
martial law in the name of defending Taiwan against invasion from
Communist China, which enabled them to maintain a majority of
seats in the people’s representative bodies at the societal center with-
out reelections for decades. Only a very few centripetal Taiwanese
elites were admitted to the political center or positions in local
government. Those centrifugal elites who held a differing ideology
were viewed as heterodox and excluded from the societal center.
During this period, the Nationalists had absolute control over the
politics of Taiwan, and initiated a revolution from above in the social
and economic domains (Gold, 1986 ). Based on the Principle of the
People’s Livelihood, they implemented the ‘‘375 Rent Reduction
Program’’ and the ‘‘Land-to-the-Tiller Program’’ to reorganize the
farm economy structure toward the equalization of landholding and
a small-scale farming system (Chen, 1961 ). Economic investment at
that time was aimed at repairing the serious damage caused by the
bombing by Allied air forces during World War II and at satisfying the
demands of the domestic market. By the end of the 1950s, manu-
facturing growth for light industrial products was slowing down
owing to saturation of the domestic market. The problems of indus-
trial inefficiency, price inflation, and imbalance in external payments
become more serious. After a few years of adjustments, the government
finally decidedtoacceptadvicefrom a groupofUS-educatedeconomists
and technocrats and took decisive steps in the 1950s to change the
overall thrust of policy incentives in favor of export activity (Lin, 1973 ).
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