Taiwan The End of a Dynasty

By William R. Doerner

The announcement signaled the end of one of the century's longest-running political dynasties, a father-to-son reign that lasted more than six decades but also saw its dominion shrink from the world's most populous nation to a ( small island off the mainland of China. Shortly after 8 p.m. last Wednesday, programming on Taiwan's government-owned television and radio stations was suddenly interrupted. Premier Yu Kuo-hwa was shown addressing the central standing committee of the ruling Kuomintang (Nationalist Party). Speaking in somber, measured tones, he announced that President Chiang Ching-kuo, 77, son of Generalissimo Chiang Kai-shek, had died of heart failure in Taipei, the capital. A few minutes later, Vice President Lee Teng-hui, already sworn in as Chiang's successor, called on his fellow citizens to "unite together and fulfill the mission that Mr. Chiang was unable to finish."

Lee was doubtless making a pro forma reference to the old dream of reunifying China under Nationalist rule. But his observation applied equally to a more realistic mission that has been largely attained: transforming Taiwan from an impoverished paddyland backwater into a prosperous modern society. Today the island nation is a midsize economic powerhouse that produces the world's eleventh largest volume of exports.

Yet that proud accomplishment, along with almost everything else in Taiwanese life, is overshadowed by the pivotal question of the country's future relations with the mainland Communist regime, which still claims the island as a province. Clearly concerned that Taiwan's new leadership may lack Chiang's adamant belief that the island remain a part of China, Beijing's leaders went out of their way to pay tribute to the late President. Communist Party Chief Zhao Ziyang noted approvingly that Chiang "had upheld a 'one- China' policy." Taiwan's geopolitical status is also a matter of concern for Washington, which ceased to recognize Taiwan diplomatically in 1979 but continues to sell arms to the country and to count it as the fifth largest U.S. trading partner. President Reagan sent a personal message of condolence to Taiwan, and Washington praised Chiang as a "respected leader."

Lee's rise to power marked a historic turning point for Taiwan. For the first time since Chiang Kai-shek led his defeated Nationalist troops there in 1949, the Taipei government will be led by one of the native Taiwanese, who make up 80% of the total population of 20 million. Lee, 65, was born to a family of rice and tea farmers on the island's north coast. A devout Presbyterian who speaks English fluently, he was educated in Kyoto, Japan, and earned a Ph.D. in agricultural economics from Cornell in 1968. Lee joined the Cabinet as a Minister Without Portfolio in 1972 and later served as Taipei mayor and Taiwan province governor. The new President has no political base, however, and may wind up effectively sharing power with Premier Yu and Kuomintang Secretary-General Lee Huan for the remainder of his term, which runs until 1990. Despite his homegrown roots, Chiang's successor is no advocate of declaring a permanently independent Taiwan, a step Beijing has warned would provoke it to military action.

Lee's economic background should serve him well. Despite a spectacular average annual growth rate of more than 9% over the past two decades, Taiwan's economy now stands at a potentially hazardous crossroads. With an average manufacturing wage of $535 a month, the country can no longer claim to offer cheap labor by Asian standards, yet it has been slow to invest in higher- technology fields. Exports of textiles, a key industry, last year grew by an impressive 23%. But other sectors have been hurt by a 40% rise since late 1985 in the value of the New Taiwan dollar against the U.S. greenback, which has increased the price of the island's products in many overseas markets.

Politically, the new President is expected to follow through with the three major initiatives prepared in the final years of the Chiang regime. The first of these steps, the lifting of martial law, was accomplished last year. The second, permitting opposition political parties, was effectively taken with the formation in 1986 of the liberal Democratic Progressive Party, which is expected to be granted full legal rights later this year. More problematic is the goal of reorganizing the country's three legislative bodies. Lee's need to play consensus politics may prevent him from moving rapidly on that and other unfinished business. The new leader will almost certainly continue the policy, begun only last November, of allowing Taiwan residents to travel to the mainland to visit family members. So far, more than 11,000 former mainlanders have traveled legally to China, and thousands more have made the trip covertly.

One test of Lee's China policy will be his handling of trade and travel ties to Hong Kong as the British colony prepares to revert to mainland rule in 1997. According to an agreement signed by Britain and China in 1984, Hong Kong will be allowed to retain its capitalist system for 50 years, as well as a large measure of local control. Many Taiwanese will be watching Hong Kong's < experience for guidance on how to handle their future relations with the mainland. While a Taiwanese reunification even as tenuous as Hong Kong's is by no means inevitable, a gradual improvement of relations across the Taiwan Strait seems likely.

With reporting by Jay Branegan/Taipei, with other bureaus