In 1895, military defeat forced China to cede Taiwan to Japan. Taiwan reverted to Chinese control after World War II. Following the Communist victory on the mainland in 1949, 2 million Nationalists fled to Taiwan and established a government using the 1946 constitution drawn up for all of China. Over the next five decades, the ruling authorities gradually democratized and incorporated the local population within the governing structure. In 2000, Taiwan underwent its first peaceful transfer of power from the Nationalist to the Democratic Progressive Party. Throughout this period, the island prospered and became one of East Asia's economic "Tigers." The dominant political issues continue to be the relationship between Taiwan and China - specifically the question of eventual unification - as well as domestic political and economic reform.

Geography

Location: Eastern Asia, islands bordering the East China Sea, Philippine Sea, South China Sea, and Taiwan Strait, north of the Philippines, off the southeastern coast of China

Area: total: 35,980 sq km; land: 32,260 sq km; water: 3,720 sq km. note: includes the Pescadores, Matsu, and Quemoy islands

Land boundaries: 0 km

Coastline: 1,566.3 km

Climate: tropical; marine; rainy season during southwest monsoon (June to August); cloudiness is persistent and extensive all year

Terrain: eastern two-thirds mostly rugged mountains; flat to gently rolling plains in west

Elevation extremes: lowest point: South China Sea 0 m
highest point: Yu Shan 3,952 m

Natural resources: small deposits of coal, natural gas, limestone, marble, and asbestos

People

22,858,872 (July 2007 est.)

Net migration rate: 0.61 migrant(s)/1,000 population (2007 est.)

Life expectancy at birth: total population: 77.56 years; male: 74.65 years; female: 80.74 years (2007 est.)

Ethnic groups: Taiwanese (including Hakka) 84%, mainland Chinese 14%, indigenous 2%

Religions: mixture of Buddhist and Taoist 93%, Christian 4.5%, other 2.5%

Languages: Mandarin Chinese (official), Taiwanese (Min), Hakka dialects

Government

Government type: multiparty democracy

Capital: Taipei

Administrative divisions: includes main island of Taiwan plus smaller islands nearby and off coast of China's Fujian Province; Taiwan is divided into 18 counties (hsien, singular and plural), 5 municipalities (shih, singular and plural), and 2 special municipalities (chuan-shih, singular and plural)
note: Taiwan uses a variety of romanization systems; while the Wade-Giles system still dominates, city of Taipei has adopted standard Pinyin romanization for street and place names within its boundaries; other local authorities use different romanization systems; names for administrative divisions that follow are in Wade-Giles system with Pinyin equivalents in parentheses counties: Chang-hua (Changhua), Chia-i (Chiayi) [county], Hsin-chu (Hsinchu), Hua-lien (Hualien), I-lan (Yilan), Kao-hsiung (Kaohsiung) [county], Kin-men (Kinmen), Lien-chiang (Lienchiang, also Matsu), Miao-li (Miaoli), Nan-t'ou (Nantou), P'eng-hu (Penghu), P'ing-tung (Pingtung), T'ai-chung (Taichung), T'ai-nan (Tainan), T'ai-pei (Taipei) [county], T'ai-tung (Taitung), T'ao-yuan (Taoyuan), and Yun-lin (Yunlin) municipalities: Chia-i (Chiayi) [city], Chi-lung (Keelung), Hsin-chu (Hsinchu), T'ai-chung (Taichung), T'ai-nan (Tainan)
special municipalities: Kao-hsiung (Kaohsiung) [city], T'ai-pei (Taipei) [city]

chief of state: President CHEN Shui-bian (since 20 May 2000); Vice President Annette LU (LU Hsiu-lien) (since 20 May 2000)

head of government: Premier (President of the Executive Yuan) CHANG Chun-hsiung (since 21 May 2007); Vice Premier (Vice President of the Executive Yuan) CHIOU I-jen (since 21 May 2007)

Economy

Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In keeping with this trend, some large, government-owned banks and industrial firms are being privatized. Exports have provided the primary impetus for industrialization. The island runs a trade surplus, and foreign reserves are the world's third largest. Despite restrictions on cross-strait links, China has overtaken the US to become Taiwan's largest export market and, in 2006, its second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Strong trade performance in 2006 pushed Taiwan's GDP growth rate above 4%, and unemployment is below 4%. Consumer spending recovered following a slowdown early in 2006, when banks tightened lending to address a sharp increase in delinquent consumer debt.

Labor force: 10.46 million (2006 est.); Labor force - by occupation: agriculture: 5.5%; industry: 36%; services: 58.5% (2005 est.)

Unemployment rate: 3.9% (2006 est.)

Industries: electronics, petroleum refining, armaments, chemicals, textiles, iron and steel, machinery, cement, food processing, vehicles, consumer products, pharmaceuticals.

information courtesy The World Factbook Spetember 2007