For much of the past half-century, Taiwan's development has been inextricably tied to the drama of the Chinese civil war and the Cold War in Asia. Both the government on Taiwan and many of its supporters abroad have sought to link the island's history with that of the mainland. The result has been partially to obscure the distinctive history of Taiwan and, with this, to ignore factors which have decisively shaped the development of the island. The bulk of the papers in this volume seek to contribute to the ongoing efforts of scholars in Taiwan and abroad to illuminate the early 20th-century portion of this history and to join it to discussions of the post-war evolution of the island.

As I set out to write this contribution, a series of earthquakes transformed a large part of Taiwan causing me to rethink the project. They reconfirmed that humans are not the only factor determining a landscape – a point sometimes forgotten in an age when our ability to modify the earth seems to be increasing exponentially. The subsequent “earthshaking” election of Chen Shui-bian to president brought to the fore an age-old problem: how much do natural events like earthquakes or floods influence society? Is it merely the governmental response to a “natural” disaster that affects politics? Whatever the speculation, our ability to sort out the “human” from the “natural” landscape remains problematic. As work proceeded, it became clear that it would be difficult to gather comparative data in a fashion which could do justice to a sort of “sequent occupance” study of the Taiwan landscape with five slices of time as I had originally planned: the beginning of the century, around 1925, the middle of the century, around 1975 and the end of the century.

This article analyses Taiwan's economic changes that have occurred from the Japanese colonization of Taiwan in 1895 to the recent Asian financial crisis, focusing on the interplay between policy and structure. Pre-colonial Taiwan was a frontier society with a settlement economy, primarily subsistence-based, and with a thin state structure, politically barely governed by the Qing dynasty. Under Japanese rule, Taiwan was turned into an essentially open economy and an agrarian base of the Japanese Empire. In the post-Second World War era, the Taiwanese economy under the Nationalist regime was briefly turned inward for import substitution industrialization, but rapidly transformed into one based on industrial exports in labour-intensive sectors, and increasingly on modern services as well. By the end of the century, Taiwan had already become the world's third largest maker of information technology products, behind the United States and Japan. The permutation of ownership structure was equally drastic. Dominant Japanese capital in the pre-war era became omnipresent state capital in the immediate post-war era. Subsequently, however, indigenous private capital overwhelmed the industrial sector and, towards the end of the century, made inroads in the financial sector as well.

Economic performance in the long term is the result of interaction between an economy's internal characteristics and its external environment. The internal characteristics include economic and social institutions, governmental and legal frameworks, natural and human resources, and locational factors. The external environment consists of two parts, one made up of foreign resource configurations and potential opportunities for fruitful economic relationships, and the other of power networks and “rules of the game.” These broader frameworks determine the extent to which potential economic gains can actually be realized.

The major task of this article is to investigate Taiwan's social changes in the 20th century. The focus is on the social rather than the economic and political dimensions, even though it is very difficult to prevent mentioning Taiwan's economic development miracle as well as recent political democratization. This article mainly discusses how economic and political structures affect social changes, and then explores some impacts of social changes in subsequent political transformation.

Few notions in the contemporary world elicit such public demonstration and widespread passion as that of the nation. Even at the end of the 20th century, national conflagrations from Kosovo to East Timor still seize headlines from global treaties and space explorations. While scholars argue that the nation is intersubjectively imagined, discursively produced, and “narrated” and “performed” out of shreds and fragments, the notion, far from being an outmoded concept, shows every sign of gathering strength, intertwined with and supplanting deep-seated religious beliefs and social progress as a sanctified norm.For theoretical discussions of the nation, see especially Benedict Andersen, Imagined Communities (London: Verso, 1991); Ernest Gellner, Nations and Nationalism (Ithaca: Cornell University Press, 1983); Eric Hobsbawm and Terence Ranger (eds.), The Invention of Tradition (Cambridge: Cambridge University Press, 1992); and Homi K. Bhabha (ed.), Nation and Narration (London: Routledge, 1990). Between the local, the national and the supranational whose demarcations are themselves contested, various discursive strands intersect and dispute, vying to redraw maps or rewrite histories. The terrifying devastation allegiance to different nations can unleash therefore weighs heavily on a retrospective on Taiwan, in a double bind of dispassion and engagement. The subject is a particularly sensitive one, for the very invocation of the name “Taiwan,” depending on its context, manner and intonation, implicates particular ideological stances.

In the 20th century, Taiwan has experienced two cycles of regime evolution, during which the Japanese colonial regime and the Nationalist émigré regime consecutively dominated its political history each for about half a century.For our analysis, a political regime is defined as an ensemble of patterns that determines the methods of access to the principal public offices; the characteristics of the actors admitted to or excluded from such access; the strategies that actors may use to gain access; and the rules that are followed in the making of publicly binding decisions. See Philippe C. Schmitter and Terry Lynn Karl, “What democracy is... and is not,” Journal of Democracy, Vol. 2, No. 3 (1991). The two regimes, each wrestling with the challenge of subordinating the native society to its authoritarian rule, vision of nation-building and state-building agenda, travelled a comparable trajectory of institutional adjustment and adaptation. Each had shifted its heavy reliance on extensive use of coercive measures during the installation stage to selective co-optation, and to limited electoral opening as the incumbent elite tried to consolidate and partially institutionalize its rule.

During the Cold War period, particularly after the outbreak of the Korean War in 1950, Japan's political and security relations with the People's Republic of China and Taiwan had to cope with the realities of “two Chinas,” with the history of the Japanese colonization of Taiwan and its military aggression in China compelling post-war Japan to assume basically “non-strategic” security orientation. The fundamental argument in this article is that Japan's de facto “two Chinas” policy throughout much of the post-war period was not the result of careful consideration of its security priorities, but was rather a choice by default.

The United States has separate mutual security treaties with Japan and the Republic of Korea which provide for stationing American forces and have established procedures for close co-operation. These alliances constitute the keystone of the American security position in East Asia and, possibly, the trigger for future involvement in the area.

The relationship between the island of Taiwan and the states of South-East Asia during the 20th century has enjoyed only a limited temporal autonomy. Autonomy was denied during much of the first half of the century because of Japan's colonial rule over the island and because the countries of South-East Asia, with the exception of Thailand, were subject to Western colonialism. It was only with Japan's defeat in the Pacific War and the onset of decolonization, and also with the end of the civil war on the mainland of China that relations between Taiwan as a discrete expression in political geography and independent South-East Asian states began to assume a kind of autonomy.