remainder of Chiang Kai-Shek's life (until 1975) and thereafter under the rule of his eldest son, Chiang Ching-kuo, who was President from 1978 until his death in 1988. ROC was a Cold War partner of the United States in East Asia under a 1954 Mutual Security Treaty (MST) and received during the 1950s and early 1960s substantial ($1.5 billion) in military and economic aid from the United States (Copper, 1999, p. 172). Since the 1950s Taiwan has had one of the fastest growing economies in the world. Political liberalization tentatively begun under Chiang Ching-kuo blossomed into a free multiparty electoral system under his KMT successor, Lee Teng-hui, President from 1988 to March 18, 2000 when for the first time an opposition candidate, Chen Shui-ban, the former mayor of Taiwan's capital city, Taipei, was elected President. The initial thaw in American relations with the PRC (1971-1980) resulted in Taiwan's loss of its seat in the United Nations in 1971, the rupture of diplomatic relations with the United States in 1979 and the ending of MST in 1980. However, the United States has continued to support a peaceful resolution of the status of Taiwan and to supply Taiwan with defensive arms. Relations between Taiwan and the PRC which improved somewhat during the time of Chinese leader Deng Xiaoping, have been tense since 1993, as the popular movement for Taiwanese independence has gathered momentum.
Economic Development and Foreign Investment Climate
According to Goldstein (1997), "Japanese rule was harsh at times, but there was none of the barbarism that characterized Japan's occupation of China," and other parts of East Asia (p. 11). The Japanese improved the efficiency of agriculture. Taiwan, then called Formosa, served as an important source of rice for Japan. Basic infrastructure, railroads, roads and ports, were constructed. Education was improved. As of 1950, however, the Taiwanese economy was still predominantly agricultur...