Taiwan, the 'other China,' also will mark its 60th anniversary

The Kuomintang (KMT), expelled from the mainland by Mao Zedong's Communists, started all over again on the small subtropical island, learning from their past mistakes.

They introduced economic reforms they had never been able to carry out on the mainland, and laid the groundwork for what would become a vibrant democracy — and one of East Asia's most astonishing success stories. “For China, 1949 was a new start, with a new government, for sure. But for Taiwan, it was a new start too,” said Philip Liu, an expert on modern Taiwan history at Singapore's Nanyang Technological University.

The Communist victory in China was such a humiliating defeat for KMT leader Chiang Kai-shek that he was compelled to reconsider what had gone wrong in order to ensure the survival of his new regime.

“The fall of the mainland served as a great lesson to Chiang Kai-shek when he assumed the leadership in Taiwan,” said Peter Wang, a historian at Taiwan's National Chung Cheng University, which is named after the late leader.

“Chiang's diary in the 1950s is full of reflections about his past failures in the mainland.”

The consensus among historians is that the key measure undertaken by Chiang on Taiwan was a decision to force rich farmers to sell most of their land to poorer peasants.

This created a class of motivated small land owners who boosted agricultural output, while the landlords spent the revenue from the land sale on investment in industry, setting the stage for Taiwan's manufacturing boom.

Chiang had tried to carry out similar policies on the mainland, which he had ruled since the 1920s, but was hampered by strong entrenched interests taking in everyone from powerful land owners to super-rich businessmen and sinister gang bosses.

As a result, he never had a completely free hand to implement his political vision. “The KMT did not really control a territory until they reached Taiwan. That was the first time they really solidly controlled any territory. It never happened on mainland China,” said Liu.

Chiang's forces gained the upper hand by arriving as an essentially alien force in Taiwan, which had only emerged from 50 years of Japanese colonial rule at the end of World War II in 1945, observers say.

“They did not have to worry about local factionalism or the needs of a superpowerful landlord class,” said Murray Rubinstein, a historian specializing in Taiwan at Baruch College in New York.

“They were able to make the changes that they might have tried to make — or did try to make — in China itself.”

Chiang loosened the reins on the economy, with remarkable results — the island of just 23 million people was the world's 26th largest economy in 2008, according to the International Monetary Fund.

But he remained a strict and often ruthless authoritarian, maintaining a dictatorship on the island until his death in 1975.

Martial law was not lifted until 1987, when Chiang's son, the almost universally beloved Chiang Ching-kuo, gradually liberalized the island's political scene, taking the first cautious steps towards democracy.

The chaotic politics that now characterize the island — with former President Chen Shui-bian recently sentenced to life in jail for corruption — make some Taiwanese pine for the stability of the past.

“Everything was much more orderly under Chiang Ching-kuo,” said Lili Wang, a 39-year-old Taipei businesswoman. “Society wasn't as messy as today.”

Some historians even argue that the predictable political framework that existed under Chiang Kai-shek was a condition for the initial economic take-off, similar to the situation on the mainland today.

“What Taiwan needed most in the 1950s was a stable, honest, and highly efficient government,” said Wang. “Maybe the authoritarian politics, though not ideal at all, indirectly contributed to this goal.”

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