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After losing the presidency in 2000, the conservative Koumintang Party (KMT) lost control of Taiwan's parliament for the first time in the December 2001 elections. Analysts said the defeat could be a harbinger of the once-mighty KMT's eventual demise, as party leader Lien Chan's goal of eventual reunification with mainland China resonates little with the island's native-Taiwanese majority. The vote strengthened the political hand of President Chen Shui-bian, whose centrist Democratic Progressive Party (DPP) won the most legislative seats. The KMT had used its control of parliament to block Chen's legislation and frustrate efforts to deal with an economic recession that threw thousands out of work. Amid plunging global demand for its high-tech exports, Taiwan's economy was expected to show a full year of contraction in 2001 for the first time since records began in 1962. China, meanwhile, downplayed the pro-independence DPP's victory, but relations between Beijing and Tapei remained stalemated.
Located some 100 miles off the southern coast of China, Taiwan became the home of the KMT's government-in-exile in 1949, after Communist forces overthrew the nationalists following two decades of civil war on the mainland. While Taiwan is de facto independent, Beijing considers it to be a renegade province of China and has long threatened to invade if the island formally declares independence.
After four decades of authoritarian KMT rule, Taiwan's democratic transition began in 1987, when the government lifted martial law after 38 years. The KMT's Lee Tenghui in 1988 became the first native-Taiwanese president. This broke the stranglehold on politics by mainland refugees, who along with their descendants make up less than 15 percent of Taiwan's population. In his 12 years as president, Lee oversaw far-reaching political reforms including Taiwan's first multiparty legislative elections in 1991 and direct presidential elections in 1996. Lee also played down the KMT's historic commitment to eventual reunification with China, promoting instead a Taiwanese national identity that undermined Beijing's claim that there is only "one China."
Rifts within the KMT helped the DPP's Chen win the March 18, 2000, presidential election, ending five decades of KMT rule. In contrast to Lee's general reluctance to foster closer relations with China, Chen and his two opponents called for closer economic ties with the mainland. In addition to downplaying his party's formal advocacy of independence from Beijing, Chen, a former Taipei mayor, also pledged during the campaign to pass laws against financial and corporate corruption. Under an 82 percent turnout, Chen won 39 percent of the vote. James Soong, a former KMT secretary-general who broke with the party to run as an independent, took 37 percent, while Lien Chan, the vice president and KMT party leader, won 23 percent.
From the outset, Chen, 50, found his domestic initiatives stymied by a KMT-dominated legislature and his efforts to improve cross-strait relations frustrated by Beijing's suspicion of the president for his past support of Taiwanese independence. Chen's October 2000 order to halt construction of the island's fourth nuclear power plant led to a political crisis that lasted until January, when Taiwan's highest court ruled that the government had not followed proper procedures in its decision to stop the KMT-supported project. Chen backed down, and work resumed in February on the $6 billion plant.
The KMT fought the December 1, 2001, parliamentary elections deeply divided over whether to continue endorsing former President Lee's policy of promoting a Taiwanese national identity or to embrace recent efforts by party leader Lien to return the KMT to its traditional advocacy of eventual reunification. For his part, President Chen has had fairly little success in his efforts to foster closer economic links and high-level contacts with China. Beijing says it will hold formal talks on improving relations only if Taipei explicitly recognizes mainland China's sovereignty over Taiwan. However, Chen, along with many Taiwanese, is against entering into talks if the one-China principle is a precondition.
In the December vote, the DPP won 87 of parliament's 225 seats, up from 70 in 1998, while the KMT took 68, down from 123. The new People's First Party, headed by Soong, the KMT defector, won 46 seats, while the Taiwan Solidarity Union, backed by former President Lee, won 13 seats and a minor party took 1.
Taiwan's economy was mired in recession for much of 2001, as the global slowdown reduced demand for the island's exports, particularly electronic goods. They make up more than 35 percent of total export revenues. Overall, exports make up around half of gross domestic product. The economy shrank by 4.2 percent year-on-year in the third quarter, the second quarterly contraction in a row, after growing by 6.0 percent in 2000. Meanwhile, unemployment reached a record 5.3 percent in October. Beyond the immediate gloom, analysts say that the island needs to boost its high-end manufacturing and services industries to offset a continuing exodus of Taiwanese factories to mainland China.
Taiwanese can change their government through elections and enjoy most basic rights. The constitution vests executive power in a president who is directly elected for a four-year term. The president appoints the prime minister and can dissolve the legislature. The latter is directly elected for a three-year term and can dismiss the prime minister and cabinet in a no-confidence vote.
The administration of President Chen Shui-bian has taken some steps to crack down on what is widely known as the black money nexus of politicians, state resources, and organized crime that flourished under KMT rule. "Some legislative committees have become dominated by former gangsters who use their clout over government departments and state-owned businesses to line their own pockets or those of their friends," The Economist of London said in March 2000, just before Chen's victory. In an effort to curb the influence of money in politics, the justice department launched a crackdown in 2001 on vote buying in local elections.
Though it lost the presidency in 2000, the KMT continues to benefit politically from spoils racked up during its five decades as the ruling party. KMT members still hold key bureaucratic posts, and the party itself owns a major television station and has business interests reportedly worth $2.6 billion. Revenues from these firms help pay for KMT campaigns and, allegedly, are used to buy votes.
Despite recent judicial reforms, Taiwan's courts are still not fully independent. "Corruption and political influence remain serious problems" in the judiciary, according to the U.S. State Department's February 2001 report on Taiwan's human rights record in 2000. Moreover, police occasionally use force to obtain confessions from suspects, while judges at times accept confessions that clearly contradict available evidence or plain logic, the report added. Notwithstanding these concerns, defendants in ordinary cases generally receive fair trials. Recent judicial reforms include the creation of an independent committee to decide judicial appointments and promotions using secret balloting.
Taiwanese newspapers report aggressively on corruption and other sensitive issues and carry outspoken editorials and opinion pieces. However, laws used by past governments to jail journalists remain on the books. "The most serious threat to press freedom in Taiwan remains the persistence of criminal penalties for libel, defamation, and insult," the New York-based Committee to Protect Journalists said in its year-end report for 2000. In a positive development, the high court in 2000 upheld a lower court ruling that raised the legal barrier for news organizations to be convicted of libel.
Broadcast television stations are subject to some political influence by their owners, the U.S. State Department report said. The government, DPP, KMT, and armed forces are each the largest shareholder in or are otherwise associated with one of Taiwan's five islandwide broadcast television stations. The fifth is run by a nonprofit public foundation. Any party influence over regular television is offset, however, by the availability to some 80 percent of Taiwanese households of roughly 100 local and international private cable television stations.
Though it has refused to license private islandwide radio stations, the government has in recent years issued dozens of licenses for private regional stations. Critics say that many of these stations have limited broadcast ranges, many of the available frequencies are in remote areas, and licensing rules require radio station owners to have more capital than actually is required to operate stations. The government says the $50 million (U.S.$1.45 million) required capitalization is based on actual business costs and points out that radio stations serving designated ethnic groups or certain other socially beneficial purposes need put up only $1 million. Though no longer enforced, laws remain on the books barring Taiwanese from advocating communism or independence from China.
Taiwanese women face job discrimination, and violence against women is a major concern. In the absence of strong enforcement of laws against sex discrimination, women say they are often forced to quit jobs because of marriage, age, or pregnancy, and are promoted less frequently and receive lower salaries than their male counterparts, according to the U.S. State Department report. Women are also underrepresented in government and politics, although Annette Lu in 2000 became Taiwan's first female vice president. Rape and domestic violence are serious problems, according to the U.S. State Department report. Although two recent laws allow authorities to investigate complaints of domestic violence and prosecute rape suspects without the victims actually pressing charges, cultural norms inhibit many victims from reporting these crimes to the police.
Although there are no accurate statistics, anecdotal evidence suggests that child prostitution is a serious problem, particularly among Taiwan's 380,000 aborigines. Descendants of Malayo-Polynesians,aborigines also face discrimination in mainstream society and have few land rights. Ethnic Chinese developers use "connections and corruption to gain title to Aboriginal land," and aborigines say they are also prevented from owning certain ancestral lands under government control, the U.S. State Department report said. Taiwanese of all faiths can worship freely.
Most Taiwanese workers can join trade unions, but the law restricts the right to strike and collective bargaining is not practiced widely. The Chen administration recognized three islandwide labor federations in 2000, ending the KMT-affiliated Chinese Federation of Labor's long-standing status as Taiwan's sole labor federation. Teachers, civil servants, and defense industry workers are barred from joining unions or bargaining collectively. The labor law's restrictions on the right to strike include provisions allowing authorities to order mediation of labor disputes and banning work stoppages while mediation is in progress.
Roughly 30 percent of Taiwan's 9.7 million workers are unionized. Collective bargaining, however, tends to be practiced only in large firms, which make up fewer than 5 percent of all enterprises. Employers sometimes take advantage of illegal foreign workers by deducting money from their wages without their agreement and having them work extended hours without overtime pay, according to the U.S. State Department report.