Having gained control of China, Chiang's party remained surrounded by defeated warlords who remained relatively autonomous within their own regions. On 10 October 1928, Chiang was named director of the State Council, the equivalent to President of the country, in addition to his other titles. As with his predecessor Sun Yat-sen, the Western media dubbed him "Generalissimo". According to Sun Yat-sen's plans, the KMT was to rebuild China in three steps:
military rule,
political tutelage, and
constitutional rule. The ultimate goal of the KMT revolution was democracy, which was not considered to be feasible in China's fragmented state. Since the KMT had completed the first step of revolution through seizure of power in 1928, Chiang's rule thus began a period of what his party considered to be "political tutelage" in Sun Yat-sen's name. During this so-called Republican Era, many features of a modern, functional Chinese state emerged and developed.Communist revolution is fundamentally unsuited to China. Any revolution animated by hatred cannot accord with the moral character of the Chinese people. For once hatred becomes the motivating force, action inevitably descends into cruelty and moral debasement, seeking advantage through the injury of others. Such conduct stands in direct opposition to the ethical foundations of Chinese civilization. For several millennia, China's moral tradition has been oriented toward altruism rather than self-interest. The inherent disposition of the Chinese people has been one of peacefulness, magnanimity, and moral luminosity. They do not wish to endure cruelty inflicted by others, nor do they wish to impose cruelty upon others. They neither accept ignoble means applied to themselves, nor do they consent to employ ignoble means against others. Accordingly, methods characterized by cruelty and moral baseness cannot take root in China; at the very least, they will never command the approval of the great majority of the people. Moreover, revolutions prosecuted through cruel and ignoble means have never escaped failure. Since Communist revolution adopts precisely such methods, it is destined to encounter the opposition of the Chinese people as a whole—or, at minimum, of their overwhelming majority. Any revolutionary action that fails to secure the moral sympathy of the majority can never be legitimately undertaken. This constitutes the first and fundamental reason why the Soviet-style Communist revolution is incompatible with China.—Chiang, ''"The Differences Between Our Party's National Revolution and the Soviet Communist Revolution,"'' 25 April 1929. From 1928 to 1937, known as the
Nanjing decade, various aspects of foreign imperialism,
concessions and privileges in China were moderated by diplomacy. The government acted to modernize the legal and penal systems and attempted to stabilize prices, amortize debts, reform the banking and currency systems, build railroads and highways, improve public health facilities, legislate against traffic in narcotics, and augment industrial and agricultural production. Efforts were made to improve education standards, and the national academy of sciences,
Academia Sinica, was founded. In an effort to unify Chinese society, the
New Life Movement was launched to encourage Confucian moral values and personal discipline.
Guoyu ("national language") was promoted as the official language, and the establishment of communications facilities (including radio) was used to encourage a sense of
Chinese nationalism in a way that had not been possible when the nation lacked an effective central government. Under that context, the Chinese
Rural Reconstruction Movement was implemented by some social activists who graduated as professors of the United States with tangible but limited progress in modernizing the tax, infrastructural, economic, cultural, and educational equipment and the mechanisms of rural regions. The social activists actively co-ordinated with the local governments in the towns and villages since the early 1930s. However, the policy was subsequently neglected and canceled by Chiang's government because of rampant wars and the lack of resources after the Japanese War and the civil war. Despite being a conservative, Chiang supported modernization policies such as scientific advancement, universal education, and women's rights. The Kuomintang supported
women's suffrage and education and the abolition of
polygamy and
foot binding. Under Chiang's leadership, the Republic of China government also enacted a women's quota in the parliament, with reserved seats for women. During the Nanjing Decade, average Chinese citizens received education that they had been denied by the dynasties. That increased the literacy rate across China and also promoted the ideals of
Tridemism of democracy, republicanism, science, constitutionalism, and Chinese nationalism based on the Dang Guo system of the KMT. Any successes that the Nationalists achieved, however, were met with constant political and military upheavals. Many of the urban areas were now under the control of the KMT, but much of the countryside remained under the influence of weakened but undefeated warlords, landlords, and Communists. Chiang often resolved issues of warlord obstinacy through military action, but such action was costly in terms of men and material. The Central Plains War alone nearly bankrupted the Nationalist government and caused almost casualties on both sides. In 1931, Hu Hanmin, an old supporter of Chiang, publicly voiced a popular concern that Chiang's position as both premier and president flew in the face of the democratic ideals of the Nationalist government. Chiang had Hu put under house arrest, but Hu was released after national condemnation. Hu then left Nanjing and supported a rival government in Guangzhou. The split resulted in a military conflict between Hu's Guangdong government and Chiang's Nationalist government. '' magazine, 26 October 1931 Throughout his rule, complete eradication of the Communists remained Chiang's dream. After he had assembled his forces in
Jiangxi, Chiang led his armies against the newly established
Chinese Soviet Republic. With help from foreign military advisers such as
Max Bauer and
Alexander von Falkenhausen, Chiang's
Fifth Campaign finally surrounded the
Chinese Red Army in 1934. The Communists, tipped off that a Nationalist offensive was imminent, retreated in the
Long March during which Mao rose from a mere military official to the most influential leader of the Chinese Communist Party. Some academics and historians have classified Chiang's rule as
fascist. The
New Life Movement, initiated by Chiang, was based upon Confucianism mixed with Christianity, nationalism, and authoritarianism that have some similarities to fascism, which some historians alleged was an imitation of
Nazism.
Frederic Wakeman argued that the New Life Movement was "Confucian fascism". Chiang also sponsored the creation of the
Blue Shirts Society, in conscious imitation of the Blackshirts in the Italian
National Fascist Party and the
Sturmabteilung of the
Nazi Party. Its ideology was to expel foreign (Japanese and Western) imperialists from China and to crush communism. Close
ties with Nazi Germany also gave the Nationalist government access to German military and economic assistance during the mid-1930s. In a 1935 speech, Chiang stated that "fascism is what China now most needs" and described fascism as the stimulant for a declining society. Sino-German relations rapidly deteriorated as Germany grew closer to Japan and almost completely broke down when Japan launched a full-scale invasion of China in 1937, which Germany failed to mediate. However, China, throughout the 1930s, refrained from declaring war on the Axis powers, including Germany and Italy. China also did not formally declare war on Japan until after the
attack on Pearl Harbor in December 1941, which led to it officially declaring war on Japan, Germany, and Italy. Chinese Communists and many conservative anti-communist writers have argued that Chiang was pro-capitalist based on the alliance thesis (the alliance between Chiang and the capitalists to
purge the communist and the leftist elements in Shanghai, as well as in the resulting civil war). However, Chiang also antagonized the capitalists of Shanghai by often attacking them and confiscating their capital and assets for government use even while he denounced and fought against communists. Critics have called that "
bureaucratic capitalism". Historian
Parks M. Coble argues that the phrase "bureaucratic capitalism" is too simplistic to adequately characterize this phenomenon. Instead, he says, the regime weakened all social forces so that the government could pursue policies without being responsible nor responsive to any outside political groups. By defeating any potential challenge to its power, government officials could amass sizable fortunes. With that motive, Chiang cracked down pro-communist worker and peasant organizations, as well as rich Shanghai capitalists. Chiang also continued the anti-capitalist rhetoric of Sun Yat-sen and directed the Kuomintang media to attack the capitalists and capitalism openly. He supported
government-controlled industries instead. Coble says that the rhetoric had no impact on governmental policy and that its use was to prevent the capitalists from claiming legitimacy within the party or society and to control them and their wealth. Authority within the Nationalist government ultimately lay with Chiang. All major policy changes on military, diplomatic, or economic issues required his approval. The Soong family embezzled $20 million in the course of the 1930s and the 1940s when the Nationalist government's revenues were less than $30 million per year. Soong Mei-ling and Soong Ai-ling lived luxurious lifestyles and held millions in property, clothes, art, and jewelry. Soong Ai-ling and Soong Mei-ling were also the two richest women in China. Despite living a luxurious life for almost her entire life, Soong Mei-ling left only a $120,000 inheritance, and the reason is that according to her niece, that she donated most of her wealth when she was still alive. Chiang, requiring support, tolerated corruption with people in his inner circles, as well as high-ranking nationalist officials, but not of lower-ranking officers. In 1934, he ordered seven military officers who embezzled state property to be shot. In another case, several division commanders pleaded with Chiang to pardon a criminal officer, but as soon as the division commanders had left, Chiang ordered him shot. The deputy editor and chief reporter at the Central Daily News,
Lu Keng, made headline international news by exposing the corruption of two senior officials, Kong Xiangxi (
H. H. Kung) and
T. V. Soong. Chiang then ordered a thorough investigation of the Central Daily News to find the source. However, Lu risked execution by refusing to comply and protecting his journalists. Chiang wanting to avoid an international response and so jailed Lu instead. Chiang realized the widespread problems that corruption was creating, so he undertook several anti-corruption campaigns before and after World War II with varying success. Before the war, both campaigns, the Nanjing Decade Cleanup of 1927–1930 and the Wartime Reform Movement of 1944–1947, failed. Both campaigns following World War II and the KMT retreat to Taiwan, the Kuomintang Reconstruction of 1950–1952 and the Governmental Rejuvenation of 1969–1973, succeeded. Chiang, who viewed all of the foreign great powers with suspicion, wrote in a letter that they "all have it in their minds to promote the interests of their own respective countries at the cost of other nations" and saw it as hypocritical for any of them to condemn one another's foreign policy. He used diplomatic persuasion on the United States, Nazi Germany, and the Soviet Union to regain lost Chinese territories, as he viewed all foreign powers as imperialists that were attempting to exploit China.
First phase of Chinese Civil War During April 1931, Chiang Kai-shek attended a national leadership conference in Nanjing with Zhang Xueliang and General
Ma Fuxiang during which Chiang and Zhang dauntlessly upheld that Manchuria was part of China in the face of the Japanese invasion. After the
Japanese invasion of Manchuria in 1931, Chiang resigned as Chairman of the National Government. He returned shortly afterward. Chiang adopted the slogan "first internal pacification, then external resistance," contending that warlords and the CCP had to be eliminated before the invading Japanese could be opposed. This policy of avoiding a frontal war against Japan and prioritizing anti-communist suppression was widely unpopular and provoked nationwide protests. The CCP called for an end to civil war and a united front against the Japanese. Four million Chinese were left homeless. In 1939, the Muslim leaders
Isa Yusuf Alptekin and Ma Fuliang were sent by Chiang to several Middle Eastern countries, including Egypt, Turkey, and Syria, to gain support for the war against Japan and to express his support for Muslims. The Japanese, controlling the puppet state of
Manchukuo and much of China's eastern seaboard, appointed Wang Jingwei as a puppet ruler of the occupied Chinese territories around Nanjing. Wang named himself President of the
Executive Yuan and chairman, and he led a surprisingly large minority of anti-Chiang and anti-Communist Chinese against his old comrades. He died in 1944, a year before the end of World War II. The Hui
Xidaotang sect pledged allegiance to the Kuomintang after the party's rise to power, and Hui general
Bai Chongxi acquainted Chiang with the Xidaotang Juaozhu Ma Mingren in 1941 in Chongqing. In 1942 Chiang went on tour in
northwestern China in
Xinjiang, Gansu,
Ningxia, Shaanxi, and
Qinghai, where he met the Muslim Generals
Ma Buqing and
Ma Bufang. He also met the Muslim Generals
Ma Hongbin and
Ma Hongkui separately. , Egypt, in November 1943 A border crisis erupted with
Tibet in 1942. Under orders from Chiang, Ma Bufang repaired Yushu Airport to prevent
Tibetan separatists from seeking independence. Chiang also ordered Ma Bufang to put his Muslim soldiers on alert for an invasion of Tibet in 1942. Ma Bufang complied and moved several thousand troops to the Tibetan border. Chiang also threatened the Tibetans with aerial bombardment if they worked with the Japanese. Ma Bufang attacked the Tibetan Buddhist Tsang monastery in 1941. He also constantly attacked the
Labrang Monastery. After the attack on Pearl Harbor and the opening of the
Pacific War, China became one of the Allies. During and after World War II, Chiang and his American-educated wife, Soong Mei-ling, known in the United States as "Madame Chiang", held the support of the American
China Lobby, which saw in them the hope of a Christian and democratic China. Chiang was even named the Supreme Commander of Allied forces in the China war zone. He was appointed
Knight Grand Cross of the Order of the Bath in 1942. General
Joseph Stilwell, an American military advisor to Chiang during World War II, strongly criticized Chiang and his generals for what Stilwell saw as their incompetence and corruption. In 1944, the
United States Army Air Corps commenced
Operation Matterhorn to bomb Japan's steel industry from bases to be constructed in mainland China. That was meant to fulfill US President
Franklin D. Roosevelt's promise to Chiang to begin bombing operations against Japan by November 1944. However, Chiang's subordinates refused to take air base construction seriously until enough capital had been delivered to permit embezzlement on a massive scale. Stilwell estimated that at least half of the $100 million spent on construction of air bases was embezzled by Nationalist party officials. The poor performance of Nationalist forces during the Japanese
Ichigo campaign contributed to the view that Chiang was incompetent.
French Indochina President Roosevelt, through General Stilwell, privately made it clear that he preferred for the French not to reacquire
French Indochina (now Vietnam, Cambodia and Laos) after the war was over. Roosevelt offered Chiang control of all of Indochina. It was said that Chiang replied in English, "Under no circumstances!" After the war, 200,000 Chinese troops under General
Lu Han were sent by Chiang to northern Indochina (north of the 16th parallel) to accept the surrender of Japanese occupying forces there, and the Chinese forces remained in Indochina until 1946, when the French returned. The Chinese used the
VNQDD, the Vietnamese branch of the Kuomintang, to increase their influence in Indochina and to put pressure on their opponents. Chiang threatened the French with war in response to maneuvering by the French and
Ho Chi Minh's forces against each other and forced them to come to a peace agreement. In February 1946, he also forced the French to surrender all of their concessions in China and to renounce their extraterritorial privileges in exchange for the Chinese withdrawing from northern Indochina and allowing French troops to reoccupy the region. After France's agreement to those demands, 20,000 French soldiers landed in
Haiphong, North Vietnam, on 6 March 1946, under the leadership of general
Philippe Leclerc de Hauteclocque, followed by the withdrawal of Chinese troops which began in March 1946.
Ryukyus According to Republic of China's notes of a dinner meeting during the
Cairo Conference in 1943, Roosevelt asked Chiang whether China desired the
Ryukyu Islands as territories restored from Japan. Chiang said he would be agreeable to joint occupation and administration by China and the United States.
Second phase of Chinese Civil War Treatment and use of Japanese soldiers Because of Chiang's focus on his communist opponents, he allowed some Japanese forces and forces from the Japanese puppet regimes to remain on duty in occupied areas in an effort to prevent the communists from accepting their surrender. In 1949, a Nationalist court acquitted General
Okamura Yasuji, the chief commander of Japanese forces in China, of alleged war crimes, Nationalist China repeatedly intervened to protect Okamura from repeated American requests to testify at the
Tokyo war crimes trial. The war had severely weakened the Nationalists, and the Communists were strengthened by their popular land reform policies and by a rural population that supported and trusted them. The Nationalists initially had superiority in arms and men, but their lack of popularity, infiltration by Communist agents, low morale, and disorganization soon allowed the Communists to gain the upper hand in the civil war. After World War II, the United States encouraged peace talks between Chiang and the Communist leader, Mao Zedong, in Chongqing. Concerns about widespread and well-documented corruption in Chiang's government throughout his rule made the US government limit aid to Chiang for much of the period of 1946 to 1948 despite the fighting against Mao's Red Army. Alleged infiltration of the US government by CCP agents may have also played a role in the suspension of American aid. Chiang's right-hand man, the secret police chief
Dai Li, was anti-American and anti-Communist and a self-declared fascist. Dai ordered Kuomintang agents to spy on American officers. Earlier, Dai had been involved with the
Blue Shirts Society, a fascist-inspired paramilitary group within the Kuomintang that wanted to expel Western and Japanese imperialists, crush the Communists, and eliminate feudalism. Dai Li died in a plane crash, which some suspect to be an assassination orchestrated by Chiang; however, the assassination was also rumoured to have been arranged by the American
Office of Strategic Services because of Dai's anti-Americanism and since it happened on an American plane.
Conflict with Li Zongren A
new constitution was promulgated in 1947, and Chiang was elected by the
National Assembly as the first
President of the Republic of China on 20 May 1948. That marked the beginning of what was termed the "democratic constitutional government" period by the KMT political orthodoxy, but the Communists refused to recognize the new Constitution, and its government as legitimate. Chiang resigned as president on 21 January 1949, as Nationalist forces suffered terrible losses and defections to the Communists. After Chiang's resignation, vice-president Li Zongren became China's acting president. Shortly after Chiang's resignation, the Communists halted their advances and attempted to negotiate the Nationalists' virtual surrender. Li tried to negotiate milder terms to end the civil war but had no success. When it became clear that Li was unlikely to accept Mao's terms, the Communists issued an ultimatum in April 1949 that warned that they would resume their attacks if Li did not agree within five days. Li refused. Li's attempts to carry out his policies faced varying degrees of opposition from Chiang's supporters and were generally unsuccessful. Taylor has noted that Chiang had a superstitious belief in holding Manchuria. After the Nationalist military defeat in the province, Chiang lost faith in winning the war and started to prepare for the retreat to Taiwan. Chiang especially antagonized Li by taking possession of and moving to Taiwan US$200 million of gold and US dollars that belonged to the central government. Li desperately needed them to cover the government's soaring expenses. When the Communists captured the Nationalist capital of Nanjing in April 1949, Li refused to accompany the central government as it fled to Guangdong and instead expressed his dissatisfaction with Chiang by retiring to Guangxi. in 1949 The former warlord
Yan Xishan, who had fled to Nanjing only one month earlier, quickly insinuated himself within the Li-Chiang rivalry and attempted to have Li and Chiang reconcile their differences in the effort to resist the Communists. At Chiang's request, Yan visited Li to convince Li not to withdraw from public life. Yan broke down in tears while he talked of the loss of his home province of Shanxi to the Communists, and he warned Li that the Nationalist cause was doomed unless Li went to Guangdong. Li agreed to return if Chiang surrendered most of the gold and US dollars in his possession that belonged to the central government, and Chiang stopped overriding Li's authority. After Yan communicated those demands and Chiang agreed to comply with them, Li departed for Guangdong. In Guangdong, Li attempted to create a new government composed of both supporters and opponents of Chiang. Li's first choice of premier was Chu Cheng, a veteran member of the Kuomintang who had been virtually driven into exile for his strong opposition to Chiang. After the Legislative Yuan jas rejected Chu, Li was obliged to choose Yan Xishan instead. By then, Yan was well known for his adaptability, and Chiang welcomed his appointment. The conflict between Chiang and Li persisted. Although he had agreed to do so as a prerequisite of Li's return, Chiang refused to surrender more than a fraction of the wealth that he had sent to Taiwan. Without being backed by gold or foreign currency, the money that was issued by Li and Yan quickly declined in value until it became virtually worthless. Although he did not hold a formal executive position in the government, Chiang continued to issue orders to the army, and many officers continued to obey Chiang, rather than Li. The inability of Li to co-ordinate KMT military forces led him to put into effect a plan of defense that he had contemplated in 1948. Instead of attempting to defend all of southern China, Li ordered what remained of the Nationalist armies to withdraw to Guangxi and Guangdong. He hoped that he could concentrate all available defenses on the smaller area, which would be more easily defensible. The object of Li's strategy was to maintain a foothold on the Chinese mainland in the hope that the United States would eventually be compelled to enter the war in China on the Nationalist side.
Final Communist advance (1946–1950) Chiang opposed Li's plan of defense because it would have placed most of the troops who were still loyal to Chiang under the control of Li and Chiang's other opponents in the central government. To overcome Chiang's intransigence, Li began ousting Chiang's supporters within the central government. Yan Xishan continued in his attempts to work with both sides, which created the impression among Li's supporters that he was a stooge of Chiang, and those who supported Chiang began to bitterly resent Yan for his willingness to work with Li. Because of the rivalry between Chiang and Li, Chiang refused to allow Nationalist troops loyal to him to aid in the defense of Guangxi and Guangdong. That let Communist forces occupy Guangdong in October 1949. After Guangdong fell to the Communists, Chiang relocated the government to Chongqing, and Li effectively surrendered his powers and flew to New York for treatment of his chronic
duodenum illness at the Hospital of
Columbia University. Li visited President Truman, and denounced Chiang as a dictator and an usurper. Li vowed that he would "return to crush" Chiang once he returned to China. Li remained in exile and did not return to Taiwan. In the early morning of 10 December 1949, Communist troops laid siege to
Chengdu, the last KMT-controlled city in mainland China, where Chiang Kai-shek and his son
Chiang Ching-kuo directed the defense at the Chengtu Central Military Academy. Flying out of
Chengdu Fenghuangshan Airport, father and son were evacuated to Taiwan via Guangdong on the aircraft
May-ling and arrived the same day. Chiang Kai-shek would never return to the mainland. Historian Odd Arne Westad says the Communists won the Civil War because they made fewer military mistakes than Chiang had. Also, his search for a powerful centralized government made Chiang antagonize too many interest groups in China. Furthermore, his party was weakened by the war against Japan. Meanwhile, the Communists told different groups, such as peasants, exactly what they wanted to hear and cloaked themselves in the cover of Chinese nationalism. Chiang did not reassume the presidency until 1 March 1950. In January 1952, Chiang commanded the
Control Yuan, now in Taiwan, to impeach Li in the "Case of Li Zongren's Failure to carry out Duties due to Illegal Conduct" (李宗仁違法失職案). Chiang relieved Li of the position as vice-president of the National Assembly in March 1954.
In Taiwan Preparations to retake the mainland Chiang moved the government to
Taipei, Taiwan, where he resumed his duties as president on 1 March 1950. Chiang was re-elected by the
National Assembly to be the President of the Republic of China on 20 May 1954, and again in 1960, 1966, and 1972. He continued to claim sovereignty over all of China, including the territories held by his government and the People's Republic, as well as territory the latter ceded to foreign governments, such as
Tuva and
Outer Mongolia. In the context of the
Cold War, most of the Western world recognized that position, and the ROC represented China in the United Nations and other international organizations until the 1970s. , in 1957 During his presidency on Taiwan, Chiang continued making preparations to take back mainland China. He developed the JROTC army to prepare for an invasion of the mainland and to defend Taiwan in case of an attack by the Communist forces. He also financed armed groups in mainland China, such as Muslim soldiers of the ROC Army who had been left in Yunnan under
Li Mi and continued to fight. It was not until the 1980s that those troops were finally airlifted to Taiwan. He promoted the Uyghur
Yulbars Khan to governor during the
Islamic insurgency on the mainland for resisting the Communists even though the government had already evacuated to Taiwan. He planned an
invasion of the mainland in 1962. In the 1950s, Chiang's airplanes dropped supplies to Kuomintang Muslim insurgents in Qinghai, in the traditional Tibetan area of
Amdo.
Regime in Taiwan Despite an ostensibly democratic constitution, the government under Chiang was a de facto one-party state, consisting almost completely of
mainlanders; the "
Temporary Provisions Effective During the Period of Communist Rebellion" greatly enhanced the executive's powers, and the goal of
retaking mainland China allowed the KMT to maintain a monopoly on power and to prohibit real parliamentary opposition. The government's official line for the martial law provisions stemmed from the claim that emergency provisions were necessary since the Communists and the Nationalists were still in a state of war. Seeking to promote Chinese nationalism, Chiang's government actively ignored and suppressed local cultural expression and even forbade the use of local languages in mass media broadcasts or during class sessions. As a result of Taiwan's anti-government uprising in 1947, known as the
February 28 incident, the KMT-led political repression resulted in the death or the disappearance of up to 30,000 Taiwanese intellectuals, activists, and people suspected of opposition to the KMT. In the aftermath of the retreat to Taiwan, Chiang became increasingly disillusioned with the Kuomintang (KMT), believing that rampant corruption, power-brokering, and factional struggles—particularly the
CC Clique, which challenged Chiang's authority—had severely undermined the party's ability to govern effectively. At one point, he considered dissolving the KMT altogether and replacing it with a new party. However, in 1950, he ultimately chose to initiate a major reform effort within the KMT, launching the
Party Reform Program (國民黨改造方案) and establishing the Central Reform Committee (中央改造委員會). The committee aimed to emulate aspects of the Chinese Communist Party's organizational structure, seeking to create a highly disciplined, centralized, and people-supporting party apparatus that could exert top-down authoritarian control while incorporating grassroots feedback. The reform plan called for rapid party expansion, increasing membership from 80,000 to 500,000 within five years, and implementing KMT branches within public institutions such as schools. Additionally, Chiang sought to root out corrupt officials and establish a meritocratic system, mandating that government positions be filled primarily by technocrats selected from top universities. Most of those prosecuted were labeled by the Kuomintang as "bandit spies" (匪諜), meaning spies for Chinese Communists, and punished as such or
"Taiwanese Separatists" (台獨分子). Under the pretext that new elections could not be held in Communist-occupied constituencies, the
National Assembly, Legislative Yuan, and Control Yuan members held their posts indefinitely. The Temporary Provisions also allowed Chiang to remain as president beyond the two-term limit in the Constitution. He was re-elected by the National Assembly as president four times: in 1954, 1960, 1966, and 1972. Believing that corruption and the lack of morals were key reasons that the KMT had lost mainland China to the Communists, Chiang attempted to purge corruption by dismissing members of the KMT who were accused of graft. Some major figures in the previous mainland Chinese government, such as Chiang's brothers-in-law
H. H. Kung, T. V. Soong and nephew
Chen Lifu, exiled themselves to the United States. Although politically authoritarian and, to some extent, dominated by government-owned industries, Chiang's new Taiwanese state also encouraged economic development, especially in the export sector. A popular sweeping
Land Reform Act, as well as American foreign aid during the 1950s, laid the foundation for Taiwan's economic success to become one of the
Four Asian Tigers. After retreating to Taiwan, Chiang learned from his mistakes and failures in the mainland and blamed them for failing to pursue Sun Yat-sen's ideals of Tridemism and welfarism. Chiang's land reform more than doubled the land ownership of Taiwanese farmers. It removed the rent burdens on them, with former landowners using the government compensation to become the new capitalist class. He promoted a mixed economy of state and private ownership with economic planning. Chiang also promoted a nine-year free education and the importance of science in Taiwanese education and values. Those measures generated great success, with consistent and strong growth and the stabilization of inflation. After the government of the Republic of China had moved to Taiwan, Chiang Kai-shek's economic policy turned towards to economic liberalism and used
Sho-Chieh Tsiang and other liberal economists to promote economic liberalization reforms in Taiwan. However, Taylor has noted that the developmental model of Chiangism in Taiwan still had elements of socialism, and the
Gini index of Taiwan was around 0.28 by the 1970s, which was lower than the relatively-egalitarian West Germany. ROC (Taiwan) was one of the most equal countries in the pro-western bloc. Those in the lower 40% of income doubled their share to 22% of the total income, with the upper 20% shrinking their share from 61% to 39%, from the time of Japanese rule. The
Chiangist economic model can be seen as a form of
dirigisme, with the
state playing a crucial role in directing the market economy. Small businesses and state-owned enterprises in Taiwan flourished under the economic model, but the economy did not see the emergence of corporate monopolies, unlike in most other major capitalist countries. After the democratization of Taiwan, it began to slowly drift away from the Chiangist economic policy to embrace a more free market system, as part of the
economic globalization process under the context of
neoliberalism. Chiang had the personal power to review the rulings of all military tribunals, which during the martial law period tried civilians as well. In 1950, Lin Pang-chun and two other men were arrested on charges of financial crimes and sentenced to 3–10 years in prison. Chiang reviewed the sentences of all three and ordered them executed instead. In 1954, the Changhua monk Kao Chih-te and two others were sentenced to 12 years in prison for providing aid to accused communists. Chiang sentenced them to death after he had reviewed the case. That control over the decision of military tribunals violated the ROC constitution. After Chiang's death, the next president, his son, Chiang Ching-kuo, and Chiang Ching-kuo's successor,
Lee Teng-hui, a
native Taiwanese, would in the 1980s and 1990s increase native Taiwanese representation in the government and loosen the many authoritarian controls of the early era of ROC control in Taiwan, paving way for the democratization process.
Relations with Japan In 1971, the former Australian opposition leader
Gough Whitlam became Prime Minister in 1972, and
swiftly relocated the Australian mission from Taipei to Beijing, visited Japan. After meeting with Japanese Prime Minister
Eisaku Sato Whitlam observed that the reason that Japan was hesitant to withdraw recognition from the Nationalist government was "the presence of a treaty between the Japanese government and that of Chiang Kai-shek." Sato explained that the continued recognition of Japan towards the Nationalist government was largely because of the personal relationship that various members of the Japanese government felt towards Chiang. This relationship was rooted largely in the generous and lenient treatment of
Japanese prisoners-of-war by the Nationalist government in the years immediately after the Japanese surrender in 1945, and was felt especially strongly as a bond of personal obligation by the most senior members who were in power. Although Japan recognized the People's Republic in 1972, shortly after
Kakuei Tanaka had succeeded Sato as Prime Minister of Japan, the memory of the relationship was strong enough to be reported by
The New York Times (15 April 1978) as a significant factor inhibiting trade between Japan and the mainland. There is speculation that a clash between Communist forces and a Japanese warship in 1978 was caused by Chinese anger by Japanese Prime Minister
Takeo Fukuda attending Chiang's funeral. Historically, Japan's attempts to normalize its
relationship with the People's Republic were met with accusations of ingratitude in Taiwan.
Relations with United States in June 1960 Chiang was suspicious that
covert operatives of the United States were plotting a
coup against him. In 1950, Chiang Ching-kuo became head of Bureau of Investigation and Statistics, which he remained until 1965. Chiang Kai-shek was also suspicious of politicians who were overly friendly to the United States and considered them on the look out leaking confidential news Wu Kuo-chen was not in favor of a Soviet style snooping agency. After moved to United States the same year, Wu became a vocal critic of Chiang's family and government watch dog with US supported funds. Chiang Ching-kuo, who had been educated in the Soviet Union, initiated
Soviet-style military organization in the
Republic of China Armed Forces. He reorganized and Sovietized the
political officer corps and propagated
Kuomintang ideology throughout the military.
Sun Li-jen, who had been educated at the American
Virginia Military Institute, opposed those practices. Chiang Ching-kuo orchestrated the controversial court-martial and arrest of General
Sun Li-jen in August 1955 for plotting a coup d'état with the CIA against his father, Chiang Kai-shek, and the Kuomintang. The CIA allegedly wanted to help Sun take control of Taiwan and declare its independence. ==Death==