The international relations scholar Arnold Wolfers once noted that national security was an “ambiguous symbol.” While the Republic of China on Taiwan's (hereafter ROCOT or Taiwan) international status has certainly been ambiguous in recent years, its security has been crystal clear. Taiwan has lived under the threat of military attack or other coercive measures from the People's Republic of China (PRC) since 1949. The mainland Chinese authorities have repeatedly refused to renounce the use of force against Taiwan, claiming it a potentially necessary tool to reunify what it considers to be a renegade province with the “motherland.” As long as Taiwan lives under the threat of military force and coercion from the PRC, this will have a defining impact on the island's domestic life and international profile.

For old Taiwan-hands, the island's traffic serves as the best metaphor for society there: it lurches between extremes of Hobbesian chaos and paralysis. Drivers either rush frenetically with little regard for others or get stuck in traffic jams of epic proportions, all the time emitting dangerous pollutants into the air everyone must breathe. A superhighway may have six carefully demarcated lanes, but at any time there seems to be a minimum of ten discernible streams of traffic, as vehicles weave in and out, honking, bullying, dodging and frequently colliding. A frontier ethos still rules in this parvenu society, where 25 years ago motorcycles began to replace bicycles, and now privately-owned cars including all the priciest prestige models from around the world, are ubiquitous, riding and parking wherever their drivers feel able to stake out a claim. Sometimes it seems as if everyone is on the move, or trying to move, unwilling to yield to others, treating strangers with shocking incivility.

Taiwan's society today has been shaped primarily by four streams of influence: the traditional China stream, the Japanese stream, the Republic of China stream, and the cosmopolitan stream. The traditional China stream gave the people of Taiwan their language and their basic culture and customs. After 1895 the Japanese stream flowed into Taiwan for 50 years, causing many significant modifications to its society and cutting the people of Taiwan off from the critical changes that occurred in Chinese mainland society during that period. In 1945 the Republic of China (ROC) took over Taiwan, bringing from the mainland its ideology, its educational system; its constitutional structure, its political and social institutions, and a governing elite, most of whom spoke a different dialect of Chinese from the people of Taiwan. The purpose of this article is to identify the principal elements of this ROC stream of influence. The cosmopolitan stream, representing primarily the influence of the West, flowed into all the other streams, to some extent influencing traditional China before the fall of the Qing dynasty, but much more powerfully influencing the ROC on the mainland and Japan. Since 1945 the cosmopolitan stream, at first largely American, has also poured into Taiwan, gaining momentum and diversity with each passing year.

In 1994 one commentator described Taiwan's people as having “been nurtured and cultivated to acquire the characteristics of an ocean. Their former conservative character, like that of traditional China's, has been remoulded into another only concerned with goals and caring nothing about principles.”1 Another commentator has depicted the island's “break toward an independent existence of its own – neither Chinese, Japanese, or American but thriving on the synergism generated by all three – [is] partly due to its location, its strong economy, its strong defences, and its status as a world trader.”2 Unlike the Chinese people of mainland China, then, Taiwan's people have closely interacted with other peoples and civilizations.

Much attention has recently been paid to the difficult subject of estimating China's military expenditure (ME). This study seeks to contribute to this dialogue and research. Admittedly, this is not an easy task. A major problem with any analysis of China's ME is the veil of secrecy shrouding military allocations. Of course, the difficulty of gathering statistical data of sufficient reliability in this area is not peculiar to China. But Chinese leaders' traditional preoccupation with secrecy makes them extremely reluctant to publish details of the country's ME even in the crudest aggregated form. Until China published its first defence White Paper in November 1995, the annual state budget had contained only a single-line entry for defence. Even the White Paper did not reveal much about what was included in the official military budget. More important, a considerable amount of Chinese defence spending is not reflected in the official military budget. It is widely accepted by Western defence analysts, and occasionally admitted by their Chinese counterparts, that China's total defence spending includes three major components:

The literature on the political and economic transition from Communism, developed largely in the context of Eastern Europe and the Soviet Union, has been dominated by the idea that horizontal forms of social and political association displace the vertically structured, segmented forms of social control and organization which are characteristic of traditional Communist systems. Social forces, by linking together in broadly based, horizontally structured associations such as industry-wide labour unions and associations of private entrepreneurs, are able to break out of the vertical structures of control and strengthen their collective bargaining position vis-a-vis the state. New associations of entrepreneurs, workers, religious organizations and eventually political parties emerge and coalesce and further strengthen the power of civil society against the state. Economic liberalization is seen as a particular catalyst to this process. Market reforms weaken the state's centralized control and enable social forces to mobilize autonomously.