Taiwan, Island Bastion of Nationalist China

Taiwan, island in East Asia. Taiwan is bordered on the west by the Taiwan Strait, which separates the island from mainland China, on the north by the East China Sea, on the east by the Pacific Ocean, and on the south by the South China Sea. The government on Taiwan also administers the P’enghu Islands (Pescadores), the Chinmen Islands (Quemoy Islands) offshore from the mainland city of Xiamen, and the Matsu Islands offshore from Fuzhou, the capital of Fujian Province.

HISTORY Archaeological evidence consisting of primitive utensils indicates Taiwan was inhabited by humans as far back as 10,000 years ago. Bands of Japanese are said to have conquered portions of the island in the 12th century, and from the 15th century onward Japan regarded the eastern half of Taiwan as its possession. In 1590 the Portuguese became the first known Europeans to visit the island, which they called Formosa (Portuguese for “beautiful”). Subsequently, the Spanish attempted to found permanent settlements, but they were thwarted by the Dutch, who succeeded in taking possession of the P’enghu Islands in 1622. Three years later the Dutch established forts on the southeastern coast of Taiwan.

Currency and Banking Taiwan’s basic unit of currency is the New Taiwan dollar (32.334 New Taiwan dollars equal U.S.$1; January 1999). The bank of issue is the Bank of Taiwan. While Taiwan has permitted private banking since the 1990s, most banks remain government owned or controlled.GOVERNMENT The current constitution of the government on Taiwan was adopted during the Chinese civil war in 1947, two years before the leaders of the government retreated to the island from the mainland. A series of additional articles became effective in 1991, 1992, 1994, and 1997. Among the most significant changes was the 1994 adoption of presidential elections by popular vote. Voting is universal for all citizens aged 20 or older.

President The president is the head of state and represents Taiwan in its foreign relations and at state functions. Formerly, the president was elected by the National Assembly to a six-year term. Constitutional amendments reduced the presidential term to four years and called for direct elections by popular vote. The first popularly elected president took office in 1996.