October 31, 2001

Chiang Kai-shek’s Legacy to Freedom in Taiwan 

Joe Hung  

Many advocates for Taiwan’s independence have condemned - and are still condemning - Chiang Kai-shek for imposing an “alien” government on the island. But they have forgotten one fundamental historical fact. They owe their freedom for openly calling for the sovereignty of the island nation to President Chiang, who was born 124 years ago today.

It is Chiang Kai-shek who gave Taiwan its status as a nation state. Taiwan would not have been what it is today if he had not brought his tattered Kuomintang government to Taipei and launched the island on its way to modernization.

There has been no public celebration of Chiang’s birthday in Taiwan for the past two years. It used to be a national holiday - his son, Chiang Ching-kuo, proclaimed October 31 a national holiday after the man who had ruled China in different capacities for half a century died in Taipei on April 5, 1975.

When on December 10, 1949, Chiang Kai-shek arrived in Taipei from the Chinese mainland - still technically in “retirement” from the Presidency which he did not reassume until March 1 the following year - the political and other fortunes of the Kuomintang government were at lowest ebb. As seen from Taipei at that time, the situation could hardly have been worse.

With regard to international status, the United States in its August China White Paper had written off President Chiang’s cause. A follow-up U. S. Department of State policy guidance paper of December 23, 1949 had advised American diplomats to prepare for the fall of Taiwan to the Chinese Communists. The words commonly used at that to describe the Kuomintang cause were “discredited,” corrupt,” “reactionary,” and hopeless.” Certainly the morale of those Kuomintang leaders who straggled into Taiwan beginning in 1948 and through 1650 was all but shattered. The Taiwan they came to had been bombed during World War II, production was down, inflation was rife, and there seemed no way to handle the more than million immigrants who became an almost intolerable burden.

In his balanced assessment “U.S. Aid to Taiwan,” Neil H. Jacoby points out,

“When U.S. economic aid to the Republic of China was resumed in the latter part of 1950, … the Nationalist government in Taiwan was in a critical financial and economic position. Food, clothing, and basic necessities of living were in short supply, as a consequence of wartime losses of production facilities and a rapid increase in population by natural causes and inflow from mainland China. Heavy military spending on defense had created huge deficits in the Chinese budget. Price inflation was threatening to repeat the tragic sequence of events that contributed to the Communist takeover of mainland China. During 1950, the Chinese government lost about $90 million in convertible currencies, reducing its foreign exchange resources below a minimum level. There was widespread popular unrest, which could have impaired the stability of the government as well as the military and economic viability of the country.”

One factor contributing to the loss of the mainland was the collapse of the gold dollar note, which, however, was not a legal tender in Taiwan. On March 1, 1949 the exchange rate between Taiwan dollars and gold “yuan” notes was three to one. Two months later the ratio changed to 1:2,000. Had the Taiwan currency been tied with the gold dollar, the island’s economy would have gone under as well. On the other hand, Taiwan was instructed to finance the National” government’s budget deficit. The deficit was financed by borrowing from the Bank of Taiwan, which played a dual role of commercial and central bank, and by directly increasing the issuance of notes. The huge issuance of Taiwan dollars was followed by a concomitant price rise at an annual rate of 776 per cent in 1947 and 1,144 per cent in 1948. The rate was 1,189 per cent up to June 30, 1949. Half a month before, on June 15, Taiwan issued a new currency, the new Taiwan dollar which is still in use now. The old currency, the Taiwan dollar, was called back at the ratio of 40,000 for NT$1. The inflation was finally tamed not until mid-1953.

Chiang was elected President of the Republic of China in 1948. Nearly two years before, in October 1946, he and his wife came to Taiwan for the first time on a visit to “shun the (public) celebration” of his 60th birthday. He was actually 59 years old on October 31, 1946, but he marked his 60th birthday on that day in accordance with China’s age-old custom. With donations, mostly private, the former Japanese Governor-Generals Office Building, damaged during an American aerial bombing, was repaired and presented to him as a birthday gift from the people of Taiwan. The building was named “Chieh Shou Kuan,” or Chiang Kai-shek’s Birthday Memorial Palace. President Chen Shui-bian has his offices there

President Chiang had no part in the suppression of the anti-Chinese uprising, started on February 28, 1947. After the bloody incident, in which at least 20,000 people were killed, Chiang met with U.S. Ambassador in Nanking (Nanjing) John Leighton Stuart and professed he was unaware of conditions on Taiwan. He relied on the findings of Pai Chung-hsi’s investigating mission whose findings were in large part published and exonerated Gen. Chen Yi, administrator-general of Taiwan. Pai was then the minister of defense. Chiang requested an independent report by Stuart, who complied. Chen Yi was relieved as administrator general in May. Wei Tao-ming, former ambassador to the United States, succeeded Chen as governor and the new administration was made a provincial government on a par with all its counterparts on the mainland.

After his arrival in 1949, President Chiang, except for two brief visits to Korea and the Philippines, never left Taiwan. He concentrated on consolidation of Taiwan as his base for a counteroffensive against mainland China.

Chiang reassumed the Presidency on March 1, 1950. Taiwan was given a new identity. The island, still a province, was now the Republic of China. With Taipei as its seat, the government of the Republic of China claimed to represent the whole of China. The country was a founding member of the united Nations and a permanent member of the U.S. Security Council. A few powers, including the Soviet Union and Great Britain, derecognized the Republic of China, but a majority of nations continued to maintain diplomatic relations with Taipei. Inasmuch as international relations are concerned, Chiang’s move turned Taiwan into a new nation state, although that nation state had existed as the Republic of China since January 1, 1912.

Taiwan’s de jure status as nation state had to be defended by the de facto control of the island. Two events, which occurred almost immediately after Chiang’s arrival in Taipei, consolidated his rule over Taiwan: the battle of Quemoy (Kinmen) and the Korean war.

Over 17,000 Chinese Communist troops landed on Quemoy on October 25, 1949. They had taken small boats and junks or even rafts to cross a narrow strip of waters separating Quemoy and the mainland. They were convinced that they could easily defeat the garrison on Quemoy. So far the Kuomintang forces, with a vew few exceptions, had always fled or surrendered in the face of a Communist attack. The invading Communist soldiers were mistaken. The garrison took a last-ditch stand, routing the invaders at Kuningtou, a cape on Quemoy. After a 56-hour battle, the invasion force suffered more than 8,000 casualties. Six thousand others were taken prisoner. It was the first victory the Kuomintang forces had won since their fiasco in Manchuria. The offshore island was secured.

With the outbreak of the Korean war on June 25, 1650, President Harry S. Truman made an about-face change in U.S. policy in China. Truman ordered the U.S. Seventh Fleet to prevent any attack on Taiwan, the Chinese Communist occupation of which “would be a direct threat to the security of the Pacific area and to the United States forces performing their lawful and necessary functions in that area.” American military and economic assistance started pouring into Taiwan.

Modernization is industrialization. Industrialization requires capital and entrepreneurs. Both were supplied in large part by the more than one million civilian immigrants who came to Taiwan in 1948-50. Most of them were teachers, factory owners, engineers, technicians, merchants, bankers, scholars, and professionals. They filled the gap of managerial skill for industrialization, which Japan had purposely left on the island under its “agricultural Taiwan” policy. They also provided the “seed money as well as entrepreneurs for Taiwan’s initial import-substitution manufacturing industry. And Taiwan continued on its way to industrialization, an economic “miracle” of the 20th century.

The United States severed diplomatic relations with the Republic of China in 1979. But the U. S. Congress adopted the Taiwan Relations Act as a law governing the conduct of unofficial relations with the island. All major powers of the world had ended diplomatic relations with Taipei by 1972. Only about 30 countries, mostly small, still maintain official ties with Taiwan. However, the Republic of China on Taiwan has been legally a nation state in the minds of most countries around the world. The Taiwan Relations Act restored this sovereignty as far as the United States was concerned.

And that status was first accorded Taiwan with Chiang Kai-shek’s move to Taipei in 1949. It is his legacy to Taiwan.

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