U.S. recognition of the Chinese Communists and severance of formal relations with the Republic of China last January 1 was unique. Never before in history had one of the world's great powers unilaterally tom up an alliance with a partner who had committed no offense and embarked on a relationship with the ally's sworn enemy.
Some observers of the international scene feared the switch would be the kiss of death for the Republic of China. They reasoned that the United States was the sine qua non of ROC existence. The shock of the U.S. blow was traumatic. For a brief moment, pessimism reigned in Taiwan. "How can we survive without the support of our old friend and ally? " some people asked.
When the Republic of China was unjustly compelled to depart the United Nations, which it had helped to establish, President Chiang Kai-shek told the people: "Don't be disquieted in time of adversity. Be firm with dignity and self-reliant with vigor."
As President Carter gave notice of the U.S. change of recognitions and severance of the Mutual Defense Treaty safeguarding Taiwan, President Chiang Ching-kuo declared that people and government have full faith in the future of the Republic of China. They will be faithful to their national objectives and international responsibilities, and "continue endeavors of progress in social and economic political fields" at home and abroad, he said.
The nearly 18 million people of Taiwan quickly got back to work. They contributed to a defense fund which is climbing toward the US$100 million mark. They combatted inflation and energy difficulties, and added new pages to the "Taiwan success story" that has given them one of Asia's highest standards of living.
Nothing came to a stop in the Republic of China, especially not the relationship with the Americans. The Council for North American Affairs opened on schedule in the United States as the successor to the Republic of China's embassy, consulates and other offices. The American Institute in Taiwan - similarly representing the United States - was opened a little later.
The U.S. Congress passed and President Carter signed the Taiwan Relations Act, which declares any effort to determine the future of Taiwan by other than peaceful means, including boycotts or embargoes, a threat to the peace and security of the Western Pacific area and of grave concern to the United States. The law also pledges the United States to provide Taiwan with defensive arms.
As the new U.S.-ROC relationship developed, other countries with informal free Chinese ties expressed a desire to 'upgrade them. The Republic of China has substantial relations with all states of the free world and is an important trading partner of many of them.
Taiwan's gates are wide open to all non-Communist peoples. Tourists (about 1.3 million this year) are led by Japanese with Americans second. Foreign and overseas Chinese investment stands at about US$2 billion. The investments of Americans continue to be eligible for coverage by the U.S. government-sponsored Overseas Private Insurance Corporation.
After President Carter's announcement, American military men and their families quietly left Taiwan. Not a single incident marred this withdrawal. In many cases, U.S. servicemen sought out Chinese friends and counterparts to express their regrets.
Except for momentary resentment shown toward negotiators dispatched to Taiwan by President Carter, the people of the Republic of China took the break in stride and with no show of animosity toward Americans. They understood and their government made clear that the American people remained good friends of the Republic of China.
This was especially evident in the U.S. Congress, where the Taiwan Relations Act was made more palatable to the Republic of China. Many Senators and Representatives said the U.S. government had acted precipitously in "nonnalizing relations" with the Chinese Communists and cutting diplomatic ties with Free China. Howard Baker, the Republican leader of the Senate, declared the United States had tarnished its integrity and credibility. Senator Jesse Helms said the new U.S. China policy sought to "consign the people on Taiwan to a fate which they would not freely choose." Senator Barry Goldwater said the Republic of China had been betrayed.
In public opinion polls, the American people continued to express support for the Republic of China's right to resist communization. At the time President Carter "normalized relations" with Red China, about 70 per cent of Americans were on record as saying they opposed such ties at the expense of the Republic of China.
Under the Taiwan Relations Act, 59 treaties and agreements between the United States and the Republic of China were kept in force. The Mutual Defense Treaty remains valid through December 31 of this year under the one-year notification of termination clause invoked by President Carter.
U.S.-ROC relations are continuing - although unofficially according to Washington's definition - in business and industry, medicine, science, nuclear energy and fuels, defense equipment (including aircraft manufacturing), navigation, transportation, agriculture, communications, meteorology and many other areas of endeavor.
Even the security treaty termination was challenged in a court suit brought by Senator Goldwater and 24 other members of the Congress. The federal court system of the United States was asked to declare that President Carter acted unconstitutionally in announcing the treaty's termination without seeking approval of the Senate or the whole Congress.
For a time, there was a Taiwan hiatus in the U.S.-ROC relationship. The U.S. embassy, consulate and other offices had closed, although some personnel remained to wait for Washington's official approval of AlT. No one could give a visa or approve a document. Travel of Republic of China nationals to the United States virtually ceased for a few weeks. But that time of difficulty was weathered. Trade and transportation were not interrupted. Life went on as the two peoples showed that nothing in their regard for each other had been altered.
Americans walked the streets of Taipei and other cities without hearing a single jeer or seeing any "Go Home" signs. U.S. installations were not bothered. The former American Armed Forces Radio Network Taiwan was turned over to Inter national Community Radio Taipei. The Chinese government made a gift of NT$7 million to help the station stay on the air with 24-hour programming.
It was "business as usual" for factories, schools and government. Military forces were placed on special alert. That was all. Stability was the watch word throughout the island.
People and leaders of the Republic of China have consistently maintained that Taiwan will be the model for the reconstruction of the Chinese mainland after Communism has been overthrown. That was still the case after U.S. "nonnalization of relations" with the Chinese Communists. People went about their usual activities, spurning the united front machinations of the Chinese Communists, because they realized that the Republic of China was still alive and well and destined to shape the course of the mainland's future as well as that of Taiwan.
The "year of difficulties" had been surmounted. The view was that having been through every trial imaginable, the way of the Republic of China can only lead upward. It was in fact doing so with virtual completion of the biggest construction program in Free Chinese history.
If a country's infrastructure does not keep pace With the needs of the people, economic growth is impossible. Recognition of this by President Chiang Ching-kuo in 1972, when he became the Republic of China's Premier, gave rise to the construction program.
The Ten Major Construction Projects - a US$ $7.5 billion undertaking that included six transportation facilities and four industrial expansions - got under way in 1974 and were essentially completed in 1979. Some will be continued and enlarged under the Twelve New Construction Projects just getting under way.
As the Ten Projects began, Taiwan's infrastructure was creaking under the weight of economic demands made by growth averaging 10 per cent a year. Today goods move freely and quickly. Heavy and sophisticated industries have been given the platform needed for economic take-off.
The Six Transportation Projects are the Sun Yat-sen Memorial Freeway, west coast mainline railroad electrification, Suao-Hualien railroad, Taichung and Suao Harbors, and the Chiang Kai shek International Airport serving Taipei. The Industrial Projects are nuclear power plants, integrated steel mill, big shipyard and petrochemical complex.
Transportation also dominates the Twelve Projects, including the around-the-island railroad, three cross-island highways, widening of two high ways, double-tracking of the railroad between Kaohsiung and Pingtung, and the second stage of Taichung Harbor. Industry will be served by expansion of the integrated steel mill and two additional nuclear power plants. Agriculture will be assisted through mechanization, improved drainage and building of dikes and levees. Social welfare will be augmented with the development of new towns and the construction of housing and cultural centers.
Although the Sun Yat-sen Memorial Freeway cost US$1.25 billion, it is already paying dividends in the shape of improved market accessibility and the halving of bus, truck, and passenger car time between the two biggest cities of Taipei and Kaohsiung. Traffic is growing so fast that studies are under way looking toward widening of the freeway or construction of a parallel system.
Electrification of 1,153 kilometers of west coast mainline railroad was completed in the summer of 1979. The running time between Taipei and Kaohsiung is four hours - down by half - and may be further reduced. Longer freight trains are carrying heavier loads at greatly accelerated speeds. Dependence on imported oil is reduced.
The Suao-Hualien railroad is the next-to-Iast step in development of the round-the-island system. When the Hualien-Taitung line has been widened from narrow gauge and another mountain line is built across the southern end of the island, the system will be completed. The line southward from Suao is being completed at the end of this year and includes 18 tunnels with length of 31 kilometers and 25 bridges of 5.5 kilometers. Travel time will be half that of the coastal high way. Mineral riches and tourism attractions of the east coast will be opened up.
Opened early in 1979 was the Chiang Kai-shek International Airport near the Tai wan Straits coast. This is the most modern landing field in Asia; every known safety system has been installed. Via the Sun Yat-sen Memorial Freeway and a feeder road, the time to the city is only 45 minutes. In the first stage, CCK Airport can handle 5 million passengers and 200,000 tons of cargo annually. Subsequent construction will raise the passenger potential to nearly 20 million and freight to 1 million tons. An airport hotel of 500 rooms will be built soon.
The two new harbors are near Taichung City on the west central coast and at Suao in the north east. Taichung serves a rapidly industrializing area and will be expanded to a capacity of 12 million tons of cargo annually. Suao will have capacity of more than 6 million tons by 1982. Both are already open to shipping.
Nuclear power generation was first contemplated in the 1960s. Taiwan has almost no oil, some gas, some coal and a moderate amount of hydroelectric power. The Taiwan Power Company's goal by the end of the 1980s is 30 per cent of generation from oil, 30 per cent from uranium, 30 per cent from coal and 10 per cent from turbines driven by water power. The first nuclear plant with capacity of 1,272,000 kilowatts is essentially complete. The first nuclear generator went on line in November of 1977. The second and third plants with capacities of 1.97 and 1.93 million kilowatts will be completed in 1983 and 1985. A fourth plant is contemplated.
The integrated steel mill was opened in 1977 with capacity of 1.5 million tons annually. Principal products are billets, bars, rods and plates. The second stage to add 1.75 million tons of capacity will be completed in 1982. A third stage will raise output to 6 million tons.
Although timing didn't favor the Kaohsiung shipyard, it hasn't done so badly. Two 445,000 ton tankers and numerous smaller ships have been built. Building capacity is 1.5 million tons and repair capacity 2.5 million tons annually. Construction of warships will contribute to national defense. This was the first of the Ten Projects to be completed (in June of 1976).
Growth of the petrochemical industry has played an important part in reducing Taiwan's dependence on sophisticated imports. Products of the Chinese Petroleum Corporation complex at Kaohsiung include ethylene, propylene, butadiene and benzene. Most downstream plants are now in operation, and a fourth naphtha cracker is planned.
The Ten Projects have given the Republic of China confidence in ability to build for its own future. Most of the financing has come from domestic capital formation. The public contribution kept capital formation growing at a rate of 8.2 per cent annually from 1974 to 1977 at a time when private investment was lagging.
In the early 1970s, Taiwan's harbors were jammed with export and import cargoes. Some shipping conferences threatened to pass up stops at Kaohsiung and Keelung because of the waiting time. The transportation projects haverelieved this situation. The major ports have been expanded at the same time Taichung and Suao facilities were being constructed.
The freeway has nearly doubled the capacity of Taiwan's highway transportation system. Electrification increased the capacity of the rail system by 50 per cent. The Suao-Hualien railroad can carry 10 times the volume of the narrow, largely one-way highway linking the east coast to the plains of north and west.
More sophisticated industries - especially petrochemicals - have added to the value of exports. US$60 million worth of synthetic fibers formerly had to be imported to make USSIOO worth of textiles for export. Now the import ratio to export earnings is about 1 to 10.
In the absence of nuclear power, Taiwan would confront serious shortages. The prospect for the next decade is for a steady rise in the nuclear content of energy output. This will allow economic growth without the burden of higher and higher payments for oil.
Construction of the Ten Projects and now of the Twelve Projects required foresight, daring and a certain amount of risk. No other country in Asia has completed such a program in such a brief period. President Chiang Ching-kuo deserves the lion's share of the credit for envisaging and pushing through these undertakings. At the same time, the projects could not have been contemplated without assurance of the hard work, moral support and financing of the people.
The 17 million people of Taiwan save more money than those of any other country in the world except Japan. Theirs are the funds paying for the Twenty-two Projects and building one of the most economically rewarding societies to be found anywhere.