Editor’s Note: In a keynote address delivered at the Academia Historica in Taipei, Taiwan on September 13, 2012, Richard Bush discusses the creation of the Republic of China (ROC) a century ago, and highlights the importance of the ROC – particularly for Taiwan – as it seeks to shape its relationship with Mainland China and the world.

I am pleased to give the conference keynote address this morning. This is a great honor, one that I had no reason to expect, and one that I do not deserve. Actually, it’s rather presumptuous for any outsider to offer judgments on your history. But once my old friend Lu Fang-shang extended the invitation, I really could not say “no.” But I speak with some humility.

I am pleased that the 國史館 has chosen to hold its conference in 2012 and celebrate the founding of the Republic of China (ROC) one hundred years before. We understand the various reasons why many organizations, including the Brookings Institution, held anniversary conferences last year. Yet the events of 1911 were important primarily for what they destroyed. 1912 is important for what it created. Today, I will offer some random thoughts on that creation and what it means. In no way will I try to be comprehensive. But I will argue that the creation of the Republic of China a century ago remains important to this day, and particularly for Taiwan as it seeks to shape its relationship with the Mainland and the world.

We must acknowledge that it is something of a miracle that the ROC actually survived to celebrate a 100th anniversary. There were at least a couple of times (1949 and 1979) when some Americans, for example, believed that its days were numbered. And they were prepared to accept that outcome.

We can get a glimpse of the ROC’s troubled history merely by recalling what was happening at each of the decade anniversaries (each of the years that end in “2”):

1922: China was deeply divided among militarist groups that competed for territory and the capital in Beijing. The Kuomintang (KMT) was not yet a major force.

1932: Japan was completing the occupation of the Northeast; a conflict erupted in the Shanghai area; the Great Depression badly hurt the Chinese economy; and efforts to wipe out the Communist base areas in Jiangxi province were unsuccessful.

1942: Japan occupied much of East China; the road to victory in the Anti-Japanese War was obscure; China had just acquired a strong ally in the United States but the united front with the Communists had dissolved.

1952: The ROC had lost the Mainland to the Communists, and it was only because North Korea had invaded South Korea that the government was safe on Taiwan, with American protection. Reform had only just begun on Taiwan and there were a host of political and economic difficulties and tensions.

1962: The transition to export-led growth, which created Taiwan’s economic miracle, was underway, but the KMT regime was still quite authoritarian. There was a public dispute with the United States over ROC military action against the Mainland.

1972: The Taiwan economy was doing well, but the ROC lost its UN seat and Richard Nixon made his trip to China.

1982: The United States had terminated diplomatic relations with the ROC three years before and ended the bilateral defense treaty. In 1982, it also concluded an agreement with Beijing on limiting arms sales. With the deterioration of President Chiang Chingkuo’s health, the future of the island was quite uncertain.

1992: This year, the trends were actually quite positive. Mutually beneficial economic relations with the Mainland were expanding; there was some hope for a political understanding; and Taiwan was well on its way to becoming a full democracy.

2002: There was a new, negative trend. Political tensions within the island were deepening. Antagonism was growing with both Beijing and Washington. The People’s Liberation Army (PLA) had begun a serious, Taiwan-focused program of military modernization.

I have no intention of reviewing this history in any greater detail. Instead, I wish to examine three ways in which the idea of the ROC has been belittled in the past, and to assess whether those interpretations are justified. The first of these is the political implication of the ROC’s military defeat in what is called the Chinese civil war. The second is that the ROC, with its claim to be the government of all of China, is an anachronism. And the third view, held by some people on Taiwan, is that the ROC is the symbol of a tragic and a brutal past. I will offer my reasons for thinking that each of these views is wrong and superseded by new realities.

At the heart of this history is the issue of whether the ROC is a sovereign state or entity, as Taiwan leaders have claimed and as the People’s Republic of China (PRC) government has denied. The answer to that question has profound implications for Taiwan’s international role and for the future of cross-Strait relations. In this context, President Ma Ying-jeou’s statement on the evening of January 14th this year, that he would safeguard the sovereignty of the Republic of China with his life, is quite important. So is the formula, which he stated in his second inaugural address, of “one Republic of China, two areas.”

The ROC as the Defeated Side in a Civil War

Turning first to what we call the Chinese civil war, there is no question that the ROC armed forces were defeated in the military struggle with communist armies on the Mainland in the late 1940s. You all are more familiar with the reasons for that defeat than I am. And if Kim Il Sung had not invaded South Korea on June 25, 1950, Mao Zedong might well have carried out his plans to invade Taiwan and to achieve total victory. In fact, Taiwan was able to survive and thrive. But Beijing has taken the position that a state of cross-Strait hostilities still exists and has periodically proposed an accord to end the state of hostilities.

One possible implication of this view is, of course, that the PRC is the victor in the civil war and therefore the successor state to the ROC. Beijing thus takes the position that the ROC ceased to exist on the same day that Mao Zedong announced the creation of the PRC – October 1, 1949. Beijing’s theory about the ROC, as elucidated in a white paper issued in February 2000, included two points:

When the central government of the PRC was proclaimed on October 1, 1949, the ROC government was “replaced” as the government of all of China and its “historical status” was brought to an end.

Even though “the KMT ruling clique” continued to use the terms “ROC” and “government of the ROC,” it had “long since forfeited its right to exercise state sovereignty on behalf of China and, in reality, has always remained only a local authority in Chinese territory.”

Or, to quote Hu Jintao, the national division that has lasted since that time is not “a state of division of the Chinese territory and sovereignty. Rather, it is a state of political antagonism that is a legacy, and a lingering one, of the Chinese civil war that took place in the mid to late 1940s.” The state of division will be ended at some point in the future, preferably by peaceful means but nonpeaceful means are not ruled out.

By the way, you may know that Mao tentatively decided to keep the name “Republic of China” for his new government, when it became clear that his military forces were going to win the fight with Chiang Kai-shek’s army in the late 1940s. That was what Chiang had done when he established the KMT regime in 1928. But people convinced Mao that the Communist revolution was so special that the old title was no longer appropriate. Hence the name, “People’s Republic of China.”

I find that the term “civil war” is striking for its political and legal neutrality. It suggests that the combatant forces in the conflict somehow appeared out of thin air and started fighting. That may be true in some cases, but what usually happens is that a rebel group takes up arms against the established government. That government may be weak; it may not command much legitimacy. Yet it is still the government.

Consider the American example. We now refer to the conflict that began in April 1861 as the American civil war. But that was not the name that the Lincoln Administration used. The most common name in the North, both during the conflict and for years thereafter was “the war of rebellion.” The South, of course, called it something else: “war of secession” or “war of independence.” But as far as the national government was concerned, the South was in rebellion and it was the task of the national government to suppress that rebellion.

So this conception of civil war raises an interesting question. If the ROC was the government of China before October 1, 1949, as even Beijing seems to accept, what was the political character of the Chinese Communist Party (CCP) and its army prior to the proclamation of the PRC?

In fact, Mao Zedong and the Chinese Communist Party had an ambivalent attitude towards and relationship with the ROC government. For most of the period from the mid-1920s, when the KMT and the CCP formed their first united front, until the PLA’s victory on the Mainland in 1949, the two sides were locked in ideological and mortal combat. It is fair to say that the CCP rejected the KMT’s legitimacy as the ruling party of China and sought to replace it. The main justification for that project was classbased, the CCP assertion that the KMT served the interests of China’s landlords and big bourgeoisie and so was on the wrong side of history.

But there were a couple of times that the CCP accepted or contemplated accepting the authority of the ROC government. The first was the second united front, formed to oppose Japanese aggression. Under this arrangement, the CCP agreed to abandon its policy of armed revolt, abolish its soviet government, abolish the term “Red Army” and put its troops under government command, and to accept as its own the KMT’s program: the Three Principles of the People of Dr. Sun Yat-sen.

Mao, of course, was unwilling to totally give up class struggle or the independence of the CCP, but these had less priority than the united front and the national struggle against Japan. Mao’s Selected Works has items from this period in which he refers to the “central government” or the “national government.” He did so even as relations between the two parties were breaking down, and he made some efforts to reverse the downward spiral in the interest of continuing the “national struggle.” The problem, he asserted for awhile, stemmed from “ringleaders of the pro-Japanese clique,” not from the KMT regime itself.

The second instance was the immediate postwar era. In January 1946, the People’s Political Consultative Conference, at which all political parties including the CCP were represented, passed resolutions recognizing the national leadership of Chiang Kai-shek and calling for the writing of a new constitution, pending which a coalition government would be created. In February 1946, the KMT and the CCP reached an agreement which would integrate the communist armies into the national army. Of course, these agreements quickly fell apart in a climate of deep mutual mistrust. But their working assumption was that the CCP acknowledged and accepted – at least temporarily – the legal authority of the ROC government.

Therefore, what we call the Chinese civil war is, in essence, the CCP’s violent rebellion against the national government, which happened to be ruled by the Nationalist Party (the KMT). The ROC government enjoyed international recognition as the government of the Republic of China, and, as I have explained, even the Communists temporarily accepted that status. And just because the rebels won control of the Chinese mainland does not, in my view, negate the existence of that government. At least conceptually, the burden of proof should be on the CCP regime to justify its status rather than on the ROC to refute the allegations of its demise.

Note the curious phenomenon that since the 1950s, Beijing has sought to convince Americans that Taiwan’s continued separation is analogous to the American civil war, with the Mainland as the North and Taiwan as the South. Ironically, however, Beijing has the roles reversed. If anyone in the 1940s was analogous to Lincoln, it was Chiang Kai-shek. Mao Zedong was China’s Jefferson Davis and Robert E. Lee combined.

My point here is that even though the Nationalist armed forces lost the military struggle with the CCP, the political and legal character of that conflict preserves a degree of legitimacy for the ROC. It is a legitimacy that remains relevant to the current day. It should not be abandoned by accepting Beijing’s definition of history.

The ROC as Anachronism

Related to the idea of the ROC as The Defeated is the view of the ROC as an anachronism. After 1949, many observers and governments regarded as an illusion the claim of Chiang Kai-shek that the ROC was the government of all of China; that the communist rulers on the Mainland were bandits; and that someday, somehow the Mainland would be retaken. To be sure, U.S. diplomats worked hard for many years to keep the ROC in the United Nations, even though they feared it was a losing battle. They even suggested a two-Chinas rationale to forestall the ROC’s expulsion, but President Chiang rejected it out of hand until it was too late. Many of these same American diplomats and many American citizens believed that it was in the U.S. interest to accept the reality of the PRC and to free U.S. foreign policy from the constraints that Chiang imposed. This was related to the idea, in some quarters, that great powers like China are all that matter, and that small powers like Taiwan are unimportant. That logic has motivated U.S. policy from time to time, and there are still some who believe it.

A broader implication of the idea that the ROC was an anachronism was that the PRC was the wave of the future. This line of thinking goes back to the 1940s when the CCP cleverly created the impression for Americans and others that it was a reformist party that contrasted favorably with the corruption of the KMT regime. It was revived in the early 1970s at the time of Nixon’s opening to China; with the beginning of reform and opening up under Deng Xiaoping; and with the PRC’s emergence as a global manufacturing power house that appeared to be driving the global economy. The reality of the communist regime did assert itself regularly, of course: the Great Leap Forward, the Cultural Revolution, Tiananmen, and now the anxiety that a rising China will challenge the predominance of the United States in East Asia. Yet the positive perspective on the PRC’s trajectory persists.

The dark side of the CCP regime did create an opportunity for the ROC: an opportunity to distinguish itself as different and better. For too long, I think, the ROC did not take that opportunity, and preferred to complacently portray itself as “Free China.” The reality within Taiwan was quite different, but we understand the reasons why.

All that changed in the 1980s, when, under the leadership of President Chiang Ching-kuo, it was decided not only to reduce the barriers to human and business contact with the Mainland, but also to remove the barriers to political participation at home. President Chiang had the counter-intuitive insight that the KMT could more easily stay in power by opening up the political system rather than devoting more resources to repression. He also understood that the two sides of the Strait had begun a new competition and that Taiwan should emphasize political change. And his emphasis had the added value of creating a new, values basis for relations with the United States. As the first ethnic Chinese society to stably make the transition from an authoritarian political system to one that was liberal, pluralistic, and competitive, Taiwan became the poster child for the third wave of democratization. And it made that transition as the world was absorbing the sad lessons of the PRC’s Tiananmen crackdown. True, there was soon a period when many worried that the leaders that Taiwan voters had selected were pursuing policies that undermined peace, but the last two presidential elections have restored confidence in the pragmatism and good sense of the Taiwan electorate.

Taiwan’s democratization is relevant to a more general assessment of the ROC’s political development. Here I draw on the scholarship of Francis Fukuyama of Stanford University, particularly his Origins of Political Order. Fukuyama posits that a well developed political system must do three basic things: build an effective state; institute the rule of law; and create methods for accountability. The second two elements – rule of law and accountability – will check the potential excesses of a strong state. Fukuyama also makes the important point that political development as he defines it can be reversed and become political decay.

The history of the ROC displays many of the features of Fukuyama’s approach. The ROC state had to be built in the midst of conflict, usually military conflict, and was the object of competition of various military formations. After 1928, Chiang Kai-shek sought to increase the capacity of the state as he fought off various challengers, including the CCP and the Japanese. After a period of political decay and military defeat during the 1940s, and once the ROC government re-located to Taiwan, Chiang continued state-building to better contend with the communists. Indeed, the ROC’s first fifty years confirms Charles Tilley’s famous dictum: “War makes the state, and the state makes war.”

It was not until the late 1950s that the ROC, with U.S. aid and encouragement, made a fundamental policy shift and gave greater emphasis to economic development by adopting a strategy of export-led growth. This was remarkably successful, inserting Taiwan companies into global supply chains for the first time and spurring improvements in standards of living and social life. But it could not have occurred without the efforts of talented technocrats creating new capacity within the ROC state, even if priorities of their institutions conflicted with those of officials responsible for national security.

But this success story only took Taiwan partway down the path of political development. After all, the PRC today has achieved what Taiwan had accomplished by the mid-1980s. It has a state that is strong enough to ensure national security and rapid economic growth. But recall that Professor Fukuyama identifies two other tasks that must supplement state-building: establishing the rule of law and ensuring political accountability. I have already discussed democratization, and I can report that Fukuyama makes the judgment that no Chinese government has accepted a true rule of law except the Republic of China on Taiwan. It therefore remains the model for political development in the Chinese world and beyond. In that important regard, the ROC has created its own wave of the future and is definitely not an anachronism. However, and this is important, it must avoid the danger of political decay – a subject to which I will return.

The ROC as Symbol of a Tragic Past

There are those on Taiwan who do not identify positively with the ROC. This is because they associate the ROC with the repression and denial of liberty that occurred between the late 1940s and the mid-1980s. And the tragedy of those years was profound, just as the democratization that followed is impressive. The part of society that doesn’t like the term “Republic of China” is only prepared to accept it as the national title of the country or state that they prefer to call Taiwan. They accept that title for pragmatic political reasons, and probably hope that it is only a temporary expedient. I understand that not everyone on the island shares that view of history, but it is a reality that will only go away with time, if then.

Divergent views of the past and the different degrees of identification with the Republic of China would not be a problem if the island did not face a rather fundamental challenge of a PRC that is increasingly powerful and has clear goals concerning Taiwan. But it does, and a Taiwan that cannot agree on such fundamental political issues is in a position of greater weakness.

This difference was on display in the heated discussion surrounding the “one country, two areas” formula that KMT Honorary Chairman Wu Po-hsiung reportedly conveyed to PRC President Hu Jintao. Two issues are at play here. The first is whether the geographical territory of Taiwan and its associated islands belongs to the state called China (either the ROC or the PRC). Was it returned to China after World War II? On this issue, the PRC position and the traditional ROC position are the same: Taiwan was returned. The Democratic Progressive Party (DPP) position is that it was not. Japan gave it up in the 1952 peace treaties, but did not transfer it to another state. The second issue is the legal and political status of Taiwan (whatever name is used). Is it a sovereign entity for purposes of the international system and the resolution of the fundamental cross-Strait dispute? Here the PRC position is that it is not, and the KMT and DPP positions are more closely aligned: it’s an “independent, sovereign state.” But the disagreement between the KMT and DPP on the ROC remains. So when President Ma in his second inaugural address offered his formulation of “one Republic of China, two areas,” he was addressing both of these issues at the same time.

This disagreement between territory and the state relates to contending forms of nationalism. Scholars suggest that people can identify with their nation in different ways. One is identification with a specific territory or national-ethnic group, or both. This is the type of nationalism that we see in China from the nineteenth century on: a loyalty to the territory that the Qing Empire controlled (more or less) and to the Han nationality. I would argue that this same type of nationalism is animating around 25 percent of people on Taiwan. They identify with Taiwan itself and assert that the people whose families came here before 1945 are a separate, politically relevant ethnic group. But there is also the concept of what is called civic nationalism: an attachment to the political system and its associated institutions and norms. This is the nationalism that best characterizes the United States, which ethnically is a hodge-podge of various groups. Civic nationalism, I would suggest, is becoming the dominant type for a majority of Taiwan people. It is an attachment to the island’s democratic system and its norms of popular sovereignty and majority rule. To put it simply, it is an attachment to today’s ROC and all it stands for.

These differences between ethnic nationalism and civic nationalism and between territory and the state are not simply an abstract academic matter. They have significant consequences for cross-Strait relations. A Taiwan that cannot agree on these issues is a Taiwan that is in a weaker position visà-vis the PRC. If there were ever an issue on which a “Taiwan Consensus” is needed, this is it. To put it differently, a failure to agree on what aspects of Taiwan’s sovereignty must be defended at all costs and which are relatively trivial will only handicap Taipei’s negotiating position. When President Ma says that he will safeguard the sovereignty of the ROC with his life, I’m pretty confident that he knows what he is talking about. I also happen to think that the DPP would be better able to defend Taiwan’s core interests, as it defines them, if it were to embrace the ROC as a sovereign entity whose continuous history began a whole century ago, a history that is longer than that of the PRC by thirty-seven years.

The Second Century

Yet securing a Taiwan consensus on sovereignty and the significance of the ROC is only one part of the current challenge facing Taiwan. In its first century, the ROC succeeded in transforming itself into a truly modern state. To borrow the words of Professor Fukuyama, it has performed well the task of modern politics, which he defines as taming “the power of the state, to direct its activities toward ends regarded as legitimate by the people it serves, and to regulate the exercise of power under the rule of law.”

Professor Fukuyama also draws a useful distinction between the scope of the state and its strength. Scope refers to the tasks that the state undertakes. Strength means its capacity to implement and enforce the tasks that it assumes. On both measures, there is great variety. The PRC has broad scope and strong capacity. The United States has had limited scope and high capacity (although the future is in question). Turkey and Brazil have modest scope and high capacity. Weak or failing states have low scope and low capacity. I think it’s fair to say that the scope of the recent ROC state has been appropriate for good governance, focusing on those tasks that we associate with a modern, liberal state. Generally, it has done those tasks well. That is, the ROC state’s capacity has grown when necessary to meet new challenges.

Yet Fukuyama warns us that just as political systems can develop, increasing both capacity and scope, they can also decay. In that case, their capacity can decline in relation to their tasks. The pressing question for the ROC’s second century is whether the ROC state is capable of performing the tasks that face it. And these tasks are not small.

Economically, Taiwan faces the constant challenge of remaining competitive in an era of both globalization and rapid technological change. That is particularly complex since the magnetic power of the PRC economy is so strong. How then does Taiwan extract the benefits of economic engagement with China while preserving the ability to maintain an optimal position in global supply chains and so ensure high employment with good wages for all? If this requires liberalizing its economic relations with all major trading partners, as I believe it does, is Taiwan willing to remove the protectionist barriers that limit the market access of those trading partners? How should economic growth and environmental protection be balanced? And, returning to the issue of the capacity of the ROC state, is the economic technocracy that facilitated Taiwan’s twentieth century industrialization properly engineered to foster and guide an innovation- and knowledge-based economy in the twenty-first century?

Socially, Taiwan faces the challenge of an aging society with a very low birth rate. Does the ROC state have the correct policies to provide good health care at a moderate cost for all, and to ensure an adequate supply of employees with the right skills (even if it means expanding immigration)? Assuming the government has good policies, will it have the resources to meet the education needs of young people and the pension and health care needs of retirees?

When it comes to security, does Taiwan have a proper evaluation of the coercive threat posed by a PLA that continues to expand its war-fighting capabilities? Does Taiwan’s defense establishment need to find new ways to strengthen deterrence?

And do the institutions that usually facilitate public participation actually ensure sound, broadly supported public-policy decisions? Taiwan would be best off, I think, by achieving simultaneously the goals of prosperity, social welfare, and security; and, toughest of all, of coping with a China that seeks to complete its mission of unification. But one has to ask, is the political system, which is very good at stimulating intense electoral competition, distributing benefits, and pointing fingers, able to address these issues in ways that are effective and truly reflect the wishes and interests of Taiwan’s people? Will the island be blessed by both good leaders and good followers?

I do not have answers to those questions, but I do know they are important. I suspect that the answers will be formulated in the first decade of the ROC’s second century, for good or ill. In that decade, the ROC may constitute some of the most significant challenges that it has ever faced. If the latter decades of the ROC’s first century are any guide, decades when, as President Ma has said, the ROC was reborn on Taiwan, then we can have confidence that they will be answered well. Yet as the history of the first century has demonstrated, success will not come easily, and wisdom and hard work will be essential.