Even those arguing that Taiwan has not undergone a true democratic transformation admit that rapid and substantial progress has been achieved. The electoral process is now open to a wide variety of parties, including communists, and the social status and civil rights of almost all former dissidents have been restored. As the 1998 Taipei mayoral elections were first to demonstrate, there is a truly competitive party system.

Although the New Party had lost most of its clout, the Democratic Progressive Party (DPP)  was a strong competitor to the Kuomingtang (KMT). Opposition parties are now protected by stature and legal requirements for the registration of new parties are minimal. The strong grassroots presence which developed in the 1980s has begun to establish new party links and there is no longer much worry of political intimidation. Native Taiwanese now have strong representation in national and local representational bodies, attained following the forced retirement of many mainlander incumbents at the end of 1991. Lee Teng-hui, Taiwan’s president from 1988-2000, became the country’s first native born president.

The events of the 1980s made clear the existence of a growing number of social movements and an increasingly vibrant civil society. Concurrently, the state’s influence over business and industry, labor, the mass media, schools, and state employees weakened. Nevertheless, while the advances were considerable,  obstacles needed to be overcome for Taiwan’s democratic consolidation to be truly consolidated.

Critics argued that:

residual authoritative elements . . . have been preserved under the largely KMT-initiated reforms. While the emerging political system may conform to many of the objective criteria of liberal democracy . . . the KMT has confined the scope of democratic reform to . . . ‘electoralism’. Some key elements of the abolished Temporary Articles, including the emergency power of the president and the presence of the National Security Agency within the office of the president, were revived under the new amendments  . . . the military and the national-security apparatus, citing presidential perogative, continue to evade attempts at direct supervision by members of the Legislative Yuan.

Relatedly:

. . . the KMT has been slow to respond to the opposition’s demand that the military, the national-security agencies, the judicial branch, and the civil service embrace true political neutrality. In response to the opposition’s call for a ‘nationalization of the  military’ . . . . The KMT has made cosmetic changes designed to allay criticism. Instead of abolishing its party cells in the military, the KMT moved them underground and away from the barracks . . . the military continues to dissuade its officers from joining the DPP, and the issue of Taiwan’s independence remains taboo.

Institutional problems were compounded by the  public’s own ambivalence regarding the democratization process. This is most often associated with Confucian cultural values which emphasize “the supremacy of the group over the individual, discipline over freedom, duties over rights, and personal wisdom over impersonal law.”

It is argued that many Taiwanese were concerned about the expansion of mass participation and competition in politics, preferring to remain “within the bounds of political conservatism and economic pragmatism.” According to this interpretation:

New subcultures of Western liberalism and pluralism have been merely grafted onto the dominant cultures of authoritarianism and collectivism because many are reluctant to jeopardize the political order for the sake of democratic political values such as freedom and equality.

The above assertions were backed by survey results designed to measure average levels of public preference for ‘democratization-in-principle’. Results indicate that, in Taiwan as a whole, the percentage of respondents favoring more democracy rose from 50 percent in 1991 to 66 percent in 1993, leveling off at 61 percent by 1995. Based on questions regarding the desirability of ‘social groups’ and the impact of ‘heterogeneous opinions’ on social order, less than a quarter of those surveyed (24 percent) were committed to expanding political freedoms at the risk of weakening social order and harmony. Of the participants who favor more ‘democracy-in-principle’, only a minority (35 percent) were committed to expanding political freedoms. In fact, the percentage committed to an expansion of freedoms changed little over the years, growing from 23 percent in 1986 to 24 percent in 1995.

Still, one must conclude that the process went beyond satisfying Huntington’s definition of liberalization as “partial opening of an authoritarian system short of choosing governmental leaders through freely competitive elections.” Moreover, if one turns to Huntington again for his definition of democracy, Taiwan might have met the test. According to this perspective, a twentieth-century political system would be defined as democratic it it meets the following criteria:

. . . its powerful collective decision makers are selected through fair, honest, and periodic elections in which candidates freely compete for votes and in which virtually all the adult population is eligible to vote. So defined, democracy involves the two dimensions — contestation and participation . . . . It  also implies the existence of those civil and political freedoms to speak, publish, assemble, and organize that are necessary to political debate and the conduct of electoral campaigns.

Using this definition, Taiwan certainly made the transition even thought the extent to which the process penetrated both the KMT hierarchy and the belief system of the average citizen is in disrepute. These questions, however, relate more to the permanence of the transformation than the reality of the process itself. If Taipei’s 1998 mayoral election was of any consequence, the enthusiasm surrounding the electoral  process would be difficult to reverse. Still, the  problems delineated above must be taken seriously.

Problems of institutionalization remain, and will be tested if (and when) there is renewed military threat from mainland China. Even more troublesome, however, is the recalcitrance of the KMT to comply with new realities. Persistent obstacles remain concerning the party’s huge business complex and its penetration of Taiwan’s military.

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Sources:

Huntington, Samuel P. Political Order in Changing Societies. New Haven, CT: Yale University Press, 1968, 9.

Yun,han Chu, “Taiwan’s Unique Challenges,” Journal of Democracy 7.3 (1996): 75.

At the national level, elections in 1991 and 1992 featured full-scale electoral and party competition for the first time.

In 1991, in Taiwan’s first multiparty popular election, voters elected 325 representatives of a new 405 seat National Assembly. Members previously serving life terms were forced to give up their seats.

In 1992, in the first full election of the Legislative Yuan, the opposition DPP (Democratic Progressive Party) wone 31% of the votes and doubled its representation in the legislature, winning 50 of 161 seats.

In 1994, Taipei’s first mayoral race in thirty years resulted in the election of the DPP (Democratic Progressive Party) contender. The contest was heated and the aspirants were outspoken with the DPP candidate calling the KMT incumbent the “nincompoop mayor.” The public was attentive and deeply interested — television debates attracted 40% of all viewers.

The 1998 mayoral election was even more open and raucous. The KMT regained the mayoral seat in a close and wildly fought race. There were two prominent candidates.

The DPP candidate, Chen Shui-bian (47) was born to illiterate parents, worked his way through law school in Taipei, and began his career as a militant opponent to reunification. As incumbent mayor, he was immensely popular with an approval rating hovering around 70%. He was credited with improving the flow of traffic, cleaning streets, and closing down most of the city’s “barbershop” brothels during his four year’s in office. In other words, he had done a good job of responding to many of he demands made by elements of the civil society previously described. (Click here to See our post on  Taiwan’s Cold War Activism.) This was important because, so far as local issues were concerned, the race was thought to be a vote of confidence for Democratic Progressive Party management of urban affairs.

The KMT candidate, Ma Ying-jeou (48) was raised in the midst of Taiwan’s ruling elite and educated in the US at Harvard Law, later serving as the country’s minister of justice. Although he had a reputation as a “graft-busting minister,” he had been forced to resign when as many as 50,000 demonstrators marched through the streets of Taipei protesting the government’s inability to keep law and order. He favored eventual reunification and gained support by promising to use his international credentials to make Taipei a “world-class city.” Ma had strong support from mainlanders and women and, although he lacked backing from native Taiwanese, he was able to convince President Lee, himself a native born Taiwanese, to campaign for him to help him capture the “local” vote.

Lee urged citizens to recognize Ma as a “new Taiwanese” and went on to say: “We are all new Taiwanese,  whether our ancestors came here 400 years ago, or 40 or 50 years ago. Lee was also able to associate Ma with the democratization process in Taipei because, importantly, Lee was seen not only as a proponent of reunification but also as a champion of democracy. When he was elected president in 1996, it was noted that

He will become a subversive role model for the 23% of humanity that is Chinese. Indeed, his election is a problem not just for communists, but also for advocates of authoritarian “Asian values” and others who consider democracy as an alien, Western-imposed concept that has no place in Asia and can even impede economic development.”

Lee’s willingness to campaign for Ma must be seen in the framework of national politics. Because the mayor of Taipei usually goes on to serve at higher levels of government, the race was perceived to be a preview of the presidential election in the year 2000.

The race also had international implications. China, especially, watched the vote to gauge public opinion since the KMT was thought to support reunification while the DPP was thought to be a pro-independence party.

When the results were in, the Nationalists made a strong showing, winning the election with 51.1% of the vote and recouping 1994 losses.

The DPP earned 45.9% of the vote, while the New Party had a poor showing at 2.97%. Other parties participated, but their results were statistically insignificant.

There were mixed reports of the impact of ethnicity on the campaign with some observers stating that it was a non-issue and others disagreeing.

One journalist stated: ” The races are nasty on the surface — plenty of disparagement and allegations of whoremongering.”

Another news report stated: “In the animated street argot of this capital the election race centered on ‘steamed bun versus pizza’, ‘street cur versus pup’, ‘native Taiwanese versus foreign-born Chinese’.”

Ethnic issues were, of course, related to the broader issue of Taiwan’s delicate status vis-a-vis mainland China. While many analysts argued that the race concerned local rather than  international issues, there is little evidence to support their view. In fact, if local issues had been the deciding factor, there is no reason why Chen’s strong record of achievement as mayor would not have guaranteed his re-election.

Results showed that the idea of independence for Taiwan lacked strong support on the island. Only 26.8% supported  an official split from the mainland while 52.9% rejected the split. The rest declined comment. Since, in Taipei, local, national, and international politics are inextricably linked, the poll provides insight into the KMT’s strong showing.

Regarding impressions of the election overall, the thoughts of members of mainland China’s unrecognized democratic party, the Chinese Democratic Party, are particularly relevant. One member, Jane Jin, was in Taipei to observe the elections and she said she was surprised by the freedoms she saw.

This is the first time for me. Before I came my impression of Taiwan’s democracy was of people hitting each other and overturning tables . . . . I did not expect to see a thriving democracy . . . . I really wish mainland China can have the same kind of democracy one day.

If, as Linz and Stepan assert, a democratic transition is completed when

a government comes to power that is the direct result of a free and popular vote, when this government de facto has the authority to generate new policies, and when the executive, legislative, and judicial power generated by the new democracy does not have to share power with other bodies de jure

then certainly Taipei’s mayoral elections of 1994 and 1998 are an indication that democracy is firmly entrenched.

Not surprisingly, democratization has been linked to Taipei’s close relationship to the US. Samuel Hungtington states that while

no definitive evaluation of the U.S. role in third wave democratizations. is possible . . . it would appear that U.S. support was . . . a contributing factor to democratization in . . .  Taiwan as well as in a  number of other countries.

He argues that

. . . the absence of the United States from the process would have meant fewer and later transitions to democracy.

The US role is symbolized by its actions during the campaign period for Taiwan’s first presidential race (1996) when a naval force moved into the Taiwan Strait to keep China from overtly threatening Taiwan’s electoral process.

Secretary of Defense William Perry

warned the Chinese leadership that ‘America had the best damned Navy in the world, and no one should ever forget that.”

Still, some dispute whether Taipei has actually democratized. While most acknowledge that there has been a process of political liberalization, some assert that it has led only to soft authoritarianism, no to actual democratization. What do you think?

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Sources:

Rone Tempest, “Taipei’s Mayoral Race is a Barometer for China: race in Taiwan capital filled with ethnic barbs, putting independence to the test,” Los Angeles Times, 6 December 1998, Part A, 10.

“Asia: An Epic Moment The Jubilant Voters of Taiwan Send Up a Resounding Answer to Beijing’s Rockets. The Next Move a Lee-Jiang Summit?” Time International, 1 April 1996, 18.

Dirk Beveridge, “Taiwan’s ruling party hopes to snuff opposition in mayor’s race,” AP Online, 4 December 1998.

Gallup, Reuters. 12 December 1998. Electric Library Personal Edition-Document.

Juan J. Linz and Alfred Stephan. Problems of Democratic Transitions and Consolidation: Souther Europe, South America, and Post-Communist Europe (Baltimore: Johns Hopkins University Press, 1996), 3.

Samuel P. Huntington, The Third Wave (Norman and London: University of Oklahoma Press, 1991), 98.

Photograph by FutUndBeidl.

From 1979 to the present, citizen groups have emerged in Taiwan. They actively promote their particular interests and concerns. One of their objectives has been to obtain some measure of autonomy from the KMT authoritarian state. In 2016 they reached a major milestone when Tsai Ing-wen, the Democratic Progressive Party’s (DPP) candidate for President received 56.1% of the vote.

To the extent that this autonomy has been realized, the groups meet Diamond’s definition of civil society as involving citizens acting collectively in the public spheres, exchanging information, achieving mutual goals, making demands on the state, and holding state officials accountable.

Demand Making

In Taipei, demand making has occurred in each of the seven areas Diamond specifies as relevant:

• economic
• cultural
• informational and educational
• interest-based
• developmental
• issue oriented
• civic.

Note that Diamond excludes:

“individual and family life, inward-looking group activity . . . , the profit-making enterprise of private business firms, and political efforts to take control of the state” from his definition of civil society.

Claims against the KMT state included the following:

• complaints against state inaction regarding consumer protection, pollution control, and ecological conservation
• protests against state policies regarding ethnic groups, minorities’ language rights, and cultural identity
• challenges to state control by key groups such as labor, farmers, students, and teachers
• demands to change established policy regarding political issues like the ban on contacts between Taiwan’s residents and the mainland as well as human rights issues.

Organizations falling into the category that Diamond defines as civil society include: The Consumers’ Foundation, the Society for Wildlife and Nature (SWAN), and various groups concerned with welfare policies for the elderly, handicapped, and disadvantaged.

Social Movements?

Other groups are clearly more contestational and may indeed qualify as social movements in Tarrow’s sense of the term whereby movements are created when political opportunities open up for social actors who usually lack them, and power in movement occurs when ordinary people join in antagonistic confrontation with elites, authorities, and opponents. Groups meeting the above criteria include:

• the Taiwan Environmental Union
• the Taiwan Greenpeace Organization
• the Aborigine Human Rights Protection Association
• the Farmers Rights Protection Association
• the ‘anti-nuclear power movement.’

(One of the groups that has most concerned the KMT has involved veterans demanding better subsidies from the Commission on Veterans. By the end of 1988, several veterans groups had been organized with their radical factions pressuring for institutional reform. Since this group has always been the most loyal to the KMT government, their actions have been both embarrassing and worrisome. This according to Hsin-Huang Michael Hsiao.)

All of the protests have transpired in the urban arena and each has demanded reforms from the KMT state. Interestingly, while the opposition party (DPP) did not initially play a significant role in their activities, there are now some attempts to form coalitions and alliances across movements. To date, the most significant collective sentiment has been a feeling of ‘victim consciousness,’ the ‘feeling of being ignored and excluded.’

The Anti Nuclear Movement

A good example of citizen involvement in Taipei can be seen in the city’s antinuclear movement. Because Taipei lacks its own energy resources, nuclear power has been seen by technocrats as an essential element in the program of high-speed growth. It has also been tightly linked to the military and American vendors.

US Corporations Invest In Taiwan’s Turn Toward Nuclear Energy

When the US cut off diplomatic relations with Taipei in 1979, the KMT/big business coalition saw nuclear energy as a way to induce US corporations to increase their economic investment in Taiwan. This was envisioned as a mechanism for retaining strong US interest in the island for it was presumed that if nuclear vendors and other American firms were involved in Taipei’s economy the US would hesitate to cut off all military and economic ties. Subsequently, General Electric supplied reactors for two nuclear plants while Westinghouse supplied the reactor for a third as well as generators for two plants. Bechtel Corporation provided architectural and engineering services.  The turn to nuclear energy also had military and governmental implications for Taiwan itself.

Bureaucratic Control

Nuclear plants provided an opportunity for bureaucratic control, and the ability to reprocess spent fuel from reactors to make weapons-grade plutonium supported the military. There are now two nuclear reactors within 30 miles of Taipei; a fourth nuclear plant has been delayed for over a decade due to protests in the national legislature.

In non-binding referendums held in Taipei Country and City in 1994 and 1996, over half the voters registered their disapproval of the nuclear endeavor.

On Going Problems

The local citizenry became actively involved when in July 1985 a fire at one of the plants forced the suspension of operations for 15 months and caused $300 million in damages. Meetings and rallies were organized to demand safer emergency and evacuation plans. Another fire broke out at the same plant in August 1987. Meanwhile, according to Bello and Rosenfeld, local newspapers accused another plant (plant number one) of setting a world record – 56 days of continuous radiation leakage outside the plant. In May 1998, two hundred maintenance workers at the same plant walked through a puddle of radioactive water that the plant manager knew was there.

In separate instances, children near Taipei played for weeks on a pile of scrap metal near their elementary school before it was discovered that it was radioactive, and parts of nuclear power plants were exposed to intense radiation, then replaced and sold as scrap metal that was recycled into metal for new buildings.

Opposition from the Grassroots

In response to such activities, a grassroots antinuclear movement emerged comprised of a network of antinuclear self-help associations. This movement became one  prong of a broader environmental movement which forced the suspension of the fourth nuclear power plant and stopped the construction of a $160 million titanium dioxide plant by DuPont Corporation. There was an average of one antipollution demonstration a day during 1987 – 1988, often involving civil disobedience.

The Green Party

Initially, many environmentalists working for the anti-nuclear cause were associated with the opposition (DPP) party which chose green as its party color. On January 25, 1996, however, the group formed its own Green Party, mounting 13 candidates in the March 1996 elections. The candidates won over 100,000 votes in the National Assembly. In other election districts where the Green Party participated, their candidate won an average of 2.97 % of the overall vote. The candidate in Yun Lin County actually won the election and earned the party’s first government position. Still, the party was not official because it did not cross the 5 % line necessary to become a recognized party.

One of the Green Party’s major concerns at that time was permanently halting construction of nuclear plant number four whose reactor contract was assigned to General Electric in cooperation with Hitachi, Mitsubishi, and Toshiba of Japan.

Update

As of 2015, according to Wikipedia, nuclear power in Taiwan makes up around 8.1 % of its national energy consumption, and 19% of its electricity generation. There are  3 active plants and 6 reactors.  The technology chosen for the reactors has been General Electric BWR technology for 2 plants and Westinghouse PWR technology for the Maanshan Nuclear Power Plant. Construction of the Lungmen Nuclear Power Plant using the advanced boiling reactor design has encountered public opposition and a host of delays, and in April 2014 the government decided to suspend construction.

Active seismic faults run across the island, and antinuclear environmentalists argue Taiwan is unsuited for nuclear plants. A 2011 report by the environmental advocacy group, the Natural Resources Defense Council, evaluated the seismic hazard to reactors worldwide.  As determined by Global Seismic Hazard Assessment Program data, all of Taiwan’s reactors were placed within the highest risk group of 12 reactors. 

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Sources:

Bello, Walden and Stephanie Rosenfeld. Dragons in Distress: Asia’s Miracle Economies in Crisis. San Francisco: The Institute for Food and Development Policy, 1992.

Diamond, Larry. “Rethinking Civil Society, Toward Democratic Consolidation.” Journal of Democracy vol 5 no 3 (July 1994).

Hsiao, Hsin-Huang Michael. “Emerging Social Movements and the Rise of a Demanding Civil Society in Taiwan.” The Australian Journal of Chinese Affairs no 24 (July 1990).

Tarrow, Sidney. Power in Movement: Social Movements, Collective Action and Politics. Cambridge: Cambridge University Press, 1994.

Photo courtesy of Travis Wise (Flickr).

 

During the years when the Americans had a strong presence and influence in Taipei, democracy was in scarce supply.

As previously discussed, a quasi-Leninist party and its supporting military deeply penetrated the city’s political environment, controlling all political activity and prohibiting competitive elections for the top city official.

Beginning with Taipei’s designation as a special municipality of the Republic on July 1, 1967, the mayor of Taipei became an appointed position with the candidate recommended by the Premier and approved by the President of the Republic of China. In fact, the city’s elevation was seen as

. . . a deliberate attempt on the part of the Kuomintang (Nationalist Party) to deny, inhibit, or restrict the political power of the city’s Taiwanese-speaking majority, and weaken the power bases of popular Taiwanese politicians. These goals would be achieved by the government of the mayor by the Prime minister.

The undemocratic tenor of Taipei’s politics should not surprise any student of Taiwan’s history.

Post war Taiwan did not inherit democratic institutions. Instead, power was transferred from an authoritarian, imperial Japan to the KMT regime without political struggle.

The political hegemony of the KMT was enshrined in the Constitution, but based on several so-called temporary provisions that were attached to, but actually superseded the Constitution in the name of the national emergency arising from the Communist regime on mainland China.  As in Cuba, this did allow for some political participation at the local level.

At first, the mayor of Taipei was a directly elected position, and city council members have remained so. And, for a time after its arrival from the mainland, the KMT allowed some intellectual dissent. However, the policy was re-evaluated in 1960.

The KMT regime tightened its grip on security, arrested political dissidents who dared to voice their views, appointed retired military leaders to govern the province of Taiwan, and silenced any sort of political discourse.

Despite such policy, the United States chose to interpret Taiwan’s limited subnational democracy as a sign of the KMT’s  commitment to the goal of full democracy.

Actually, it has been argued that “anticommunism was officially declared the most crucial characteristic, defining democratic political order” on Taiwan. At the same time, the US insisted that Taiwan shift its priorities from retaking the mainland to developing its economy.

Over the decade of the 1960s, the success of the regime’s export-led growth policies benefited the entire society, leading to social consequences that the KMT had not fully anticipated. As literacy increased and per capita income rose, expectations regarding liberalization of the political sphere escalated.

The success of the SMEs contributed to the formation of a professional middle class and business entrepreneurial class, adding to the momentum. These groups had links to the world economy and to internationally oriented organizations that were beyond the KMT’s monitoring capacity — for example, the Junior Chamber of Commerce, the Lions Club, and the Rotary Club.

As Cheng states, “the dynamic capitalist system had simply outgrown the regime’s political capacity.”

The new middle class, reacting to the ideas and institutions of their foreign business partners, began to insist that Taiwan move toward liberal democracy, and they put their ideas into action by offering political funds and ‘fallback careers’ to leaders of the political opposition.

The political reform movement gained momentum in the late 1970s and early 1980s, fueled by Taiwan’s deteriorating status in the world community and, especially, by its loss of membership in the United Nations. Efforts focused on building a legitimate opposition party.

In 1986, a new political party was announced, the Democratic Progressive Party (DPP) which obtained much of its funding and support from small business men.

Liberalization continued following the death of Chiang Ching-kuo, the son of Chiang Kai-shek, in 1988. Under his successor — a native Taiwanese named Lee Teng-hui –tolerance for street demonstrations was increased.

Still, as the 1990s approached, many were questioning whether ‘true’ democracy would ever take hold in Taipei. Some observers talked about democratic candidates while others argued that there had been merely a shift from a strong authoritarian state to a soft one,. More acknowledged, however, the emergence of new organizations. These groups were not interested in traditional KMT concerns — national security, political stability, and economic growth. Rather they cared about social issues such as environmental protection, public safety, and income distribution. They have been labeled both social movements and civil society.

Photograph by Prince Roy (Flickr)

America’s influence on Taipei’s successful economic development is generally accepted. However, there is much discussion about the relative contributions of endogenous and exogenous factors. While the contest will not be settled here, the differing positions of scholars Amsden and Cumings shed light on varying interpretations of the American legacy.

Alice Amsden argues, “U.S. aid kept the regime in power in its earliest years.” She goes on to say:

A champion of American policy reminds us: ‘U.S. economic assistance helped to preserve the cohesion of the Mainlander minority and to consolidate its political power. Had no external assistance come to douse the fires of inflation and improve the material conditions of the Taiwanese during the early 1950s, it is doubtful whether the ROC [Republic of China] would have endured in its present form.’

This statement is critical because Amsden believes that an understanding of development — successful or unsuccessful — can only occur when “endogenous productive and social relations are taken as primary.” Specifically, in the case of Taiwan, she asserts that etatisme and land reform were primary with etatisme, law and order, and much else rooted in the Japanese occupation. Nevertheless, she goes on to note that the Nationalist determination to reform the countryside involved a system of parcellation that was “engineered by an exogenous military force (backed by U.S. aid and hardware).”

If one accepts Amsden’s emphasis on endogenous factors, it is still necessary to acknowledge that the opportunity structure emanating from the closeness of the American-KMT [Kuomintang] relationship has marked Taiwan with a confluence of unusual circumstances that brand the nation, its cities, and the economy as a special case Amsden argues:

What sharply distinguishes Taiwan from other Third World economies are the scientific advances in agriculture made under Japanese imperialism and the subsequent success of the 1953 land reform . . . which was engineered exogenously, by the Guomindang, in alliance with the Americans. The Taiwanese landed aristocracy could be expropriated because the Americans and the Mainlanders were under no obligation to it. This most unusual situation was unlikely to be repeated.

Although a redistribution of land to the peasants in Taiwan undoubtedly strengthened the Guomindang, its authority was also guaranteed by U.S. foreign aid, in military and other forms.

In Taiwan, the Cold War partnership with the United States distinguished the nation from other developing countries. As Amsden asserts: “It would be idle . . . to hold Taiwan up as an example of capitalist development for other poor countries to follow.”

In addition to land reform, the KMT’s close partnership with the United States brought other opportunities and benefits. Many of these were related to the American role in regime consolidation which enabled the state to remain in power and make decisions from a position of surety. Others can be associated with the comprehensive information and counsel provided by American advisers which reduced the level of uncertainty  inherent in the decision-making process. A good example can be found in the regime’s decision to actively recruit foreign firms.

Given the attraction of multinationals for a secure production environment and the nearby communist presence on mainland China, the Nationalist attempt would have presented tremendous challenge without the presence of the US Seventh Fleet. Instead, US advisers, in partnership with the KMT military were able to entice American multinational firms to locate in Taipei in the early 1960s. This facilitated the emergence of small domestic suppliers.

Absent US involvement, it is questionable if an environment facilitating the emergence of such entrepreneurs would have developed.

As we have seen, SMEs (small and medium enterprises) faced difficult challenges even under these more favorable circumstances, depending heavily on the KMT state to forge the initial marketing links with foreign corporations which enabled them to establish subcontracting relationships. As one foreign executive remarked, “You really can’t consider Taiwan an exporting nation. Taiwan is simply a collection of international subcontractors for the American market.”

More authoritative insight into the problem faced by Taipei’s SMEs is furnished by a 1973 report produced by the consulting firm, Arthur D. Little. The report enumerated several problems:

1. lack of financing, especially from private banking institutions who seem to prefer the larger firms
2. low productivity
3. low efficiency due to poor economies of scale
4. deficient management practices
5. lack of marketing information and techniques.

Both the presence of American multinationals and the large American market provided the opportunity for SMEs to overcome the above deficiencies.

Some scholars go a step farther than Amsden, arguing that Taiwan remained under the hegemonic umbrella of the US. This position is defined by Bruce Cumings who argues:

In the postwar American case, hegemony meant the demarcation of a ‘grand area.’ Within that area nations oriented themselves toward Washington rather than Moscow, nations were enmeshed in a hierarchy of economic and political preferences whose ideal goal was free trade, open systems, and liberal democracy . . . .

Cumings ties American interest to the importance of Japan which, in the aftermath of World War II, was perceived by policymakers to be a buffer against the Soviets in Asia and a critical element in a revived world economy, particularly given the communist successes on mainland China. The ability of Japan to meet US expectations, however. depended on its ability to obtain raw materials and labor from a ‘hinterland.’ Previously, Japanese colonial interests in Taiwan, Korea, and Manchuria had fulfilled the requirement.

A 1948 document stated the dilemma quite clearly.

As in the past, Japan for normal functioning on an industrial basis, must have access to the Northeast Asiatic areas — notably North China, Manchuria, and Korea — now under direct, indirect, or potential control of the USSR.

Although the US sought to orient Japan toward Southeast Asia as an alternative, we have seen that the Korean War intervened to realign Japan and its former possession Taiwan.

In essence, while the extent of US influence on Taipei’s regime is clearly subject to argument, parties generally agree that the influence existed and that it was tied to America’s Cold War determination to contain communism. At the same time, Taiwan’s government was clearly authoritarian and Taipei remained under martial law.

The US tolerated authoritarian politics from its allies in the Cold War struggle, even though there is little doubt that the Americans hoped that a by-product of their support would be a conversion to the free trade and liberal democracy embodied by the neoliberal perspective.

Given the dollars and weapons flowing into Taipei during the early Cold War years, as well as the security support provided even after the break in diplomatic relations and recognition of communist China, it is worth examining whether the US was successful in meeting its goals in this particular instance.

Photography by Robert Huffstutter