The KMT Government's Relocation to Taiwan and Postwar Reconstruction

30-second overview: In 1949, the Republic of China government, defeated in the Chinese Civil War, retreated from China to Taiwan. About 1.2 million soldiers and civilians followed the government to Taiwan, bringing dramatic changes to the population structure. The KMT government established an authoritarian system in Taiwan, imposed martial law for 38 years, and at the same time carried out reconstruction programs such as land reform and economic development. These immigrants from China and their descendants now make up about 15% of Taiwan's population and have profoundly reshaped Taiwan's social structure.

📝 Curator's Note
Yen Chia-kan came from Changting, Fujian, and witnessed the KMT government's migration from China to Taiwan. His fiscal and economic reforms laid the foundations for Taiwan's economy, earning him the title "father of the New Taiwan dollar." He was the person to whom Chiang Ching-kuo handed power, and he witnessed the transition from authoritarianism to democracy.

A President Who Came from Fujian

Born in 1905, Yen Chia-kan served as head of the Department of Finance in Fujian in the 1930s and personally witnessed the KMT government's retreat from China to Taiwan. In 1949, he followed the government to Taiwan, served as minister of finance, and promoted the issuance of the New Taiwan dollar and currency reform¹.

"I had no right to choose. That was for the landlord to decide." — Taiwanese tenant farmer (from The Interviews on the Life and Conduct of President Yen Chia-kan)

This sentence appeared in rural Taiwan in 1949. At the time, the 37.5% Rent Reduction policy was being implemented, and tenant farmers only had to give 37.5% of their harvest to landlords. This policy initiated a fundamental transformation of Taiwan's social structure, from landlord-tenant relations into a society of owner-cultivators².

Yen Chia-kan said, "This was a historical inevitability, and also the helplessness of the times." This was his assessment of the government's 1949 relocation to Taiwan, and also his annotation on an entire era³.

The Great Migration of 1.2 Million People

In 1949, the Chinese Civil War entered its final stage. The Kuomintang suffered successive defeats in the three major campaigns of Liaoshen, Huaihai, and Pingjin, losing large numbers of elite troops. Facing the deterioration of the war situation in China, Chiang Kai-shek had already begun considering a strategy to "defend Taiwan" as early as 1948⁴.

From late 1948 to 1950, about 1.2 million soldiers and civilians came to Taiwan with the KMT government⁵. Military personnel numbered about 600,000, retreating from places such as Northeast China, North China, and East China. Large numbers of government officials and intellectuals also came to Taiwan, including university professors, engineers, and doctors. Among ordinary people, merchants, skilled workers, and students chose to leave because of fear of Communist rule.

On December 7, 1949, the Republic of China government formally relocated to Taipei. On December 10, Chiang Kai-shek flew from Chengdu to Taipei and never returned to China for the rest of his life⁶.

📊 Data Source
According to National History Museum archives, the total number of soldiers and civilians who retreated to Taiwan in 1949 was about 1.2 million, including about 600,000 troops, about 400,000 government officials and family members, and about 200,000 ordinary civilians.

Martial Law and the White Terror

On May 19, 1949, Chen Cheng, chair of the Taiwan Provincial Government and commander-in-chief of the Taiwan Garrison Command, promulgated the "Taiwan Provincial Martial Law Order," which formally took effect at midnight on May 20⁷. This was Taiwan's first period of martial law, later incorporated into the scope of nationwide martial law.

Martial law lasted for 38 years and 2 months, until it was lifted by then-president Chiang Ching-kuo on July 15, 1987⁸. It has been called one of the longest periods of martial law in world history.

During martial law, about 140,000 people were implicated in political cases, of whom about 1,061 were executed⁹. These victims came from every social stratum, from intellectuals and students to ordinary citizens, and included both benshengren, people whose families had lived in Taiwan before the postwar period, and waishengren, people who came to Taiwan from China after the war.

The legal basis for martial law was the Temporary Provisions Effective During the Period of Communist Rebellion. These provisions froze the constitutional guarantees concerning people's freedoms and rights and granted the president almost unlimited power. The Taiwan Garrison Command became the most powerful institution of the martial-law period, responsible for maintaining public order, censoring publications, and monitoring people's thoughts.

⚠️ Contested Views
Figures for the White Terror vary across sources. Official statistics put the number of people implicated at about 140,000, but civil society groups estimate that the number may have reached 200,000. About 1,000 to 1,500 people were executed.

The Three Stages of Land Reform

To address rural problems and stabilize the regime, the KMT government carried out large-scale land reform in Taiwan, divided into three stages[^10]:

37.5% Rent Reduction (1949)

Farm rents were reduced to no more than 37.5% of production, easing the burden on tenant farmers. This was the first step in Taiwan's land reform, and also the most important.

Sale of Public Land (1951-1976)

Public land dating from the Japanese colonial period was sold to tenant farmers on preferential terms. From 1951 to 1976, a total of 138,957 hectares of land were released to 286,287 farming households¹⁰.

Land-to-the-Tiller (1953)

Landlords were forced to sell farmland exceeding 3 jia, a traditional Taiwanese land unit, which was then resold to tenant farmers. That year, 139,249 hectares of land were expropriated, creating 194,823 owner-cultivator households¹¹.

Land reform successfully eliminated the large-landlord class and realized the ideal of "land to the tiller." About 194,000 tenant-farmer households obtained land, and rural society underwent a fundamental structural change. Former landlords received land bonds and shares in state-owned enterprises as compensation. Many landlords therefore shifted toward investment in commerce and industry, providing capital for Taiwan's later industrial development.

📝 Curator's Note
Land reform was a social revolution. It changed Taiwan's class structure, turning farmers into landowners and landlords into capitalists. It was key to Taiwan's transformation from an agricultural society into an industrial one.

Economic Reconstruction and U.S. Aid

In the early period after the KMT government's relocation to Taiwan, Taiwan faced a severe economic crisis. A massive influx of people, serious inflation, and foreign-exchange shortages brought the economy to the brink of collapse.

Currency reform was implemented on June 15, 1949, issuing the New Taiwan dollar to replace the Old Taiwan dollar at an exchange rate of 1:40,000. This sharply reduced the money supply and effectively brought hyperinflation under control. Yen Chia-kan, as minister of finance, was the central figure in this reform¹².

After the Korean War broke out in 1950, the United States resumed economic aid to Taiwan. From 1951 to 1965, U.S. economic aid to Taiwan totaled US$1.482 billion¹³. U.S. aid allowed Taiwan to stabilize the exchange rate, control inflation, and promote agricultural and industrial development.

U.S. aid brought technology and management experience. American experts helped Taiwan establish a modern fiscal and financial system and promoted the development of agriculture and industry.

Social and Cultural Reorganization

The 1.2 million people brought by the KMT government's relocation to Taiwan changed Taiwan's population structure and social composition.

The formation of provincial-origin consciousness: Indigenous peoples, "benshengren" who had already been living in Taiwan during the Japanese colonial period, and "waishengren" who came to Taiwan after the war formed complex relationships of provincial origin. This distinction influenced Taiwanese society for a long time.

The establishment of military dependents' villages: To accommodate military dependents who came to Taiwan, the government established military dependents' villages across the country. These villages became communities where waishengren groups lived together and preserved strong cultural features from different provinces of China.

The increase in the educated population: Among those who came to Taiwan, intellectuals made up a relatively high proportion. This raised Taiwan's overall education level and also drove later educational development.

In cultural policy, the KMT government regarded Taiwan as "Free China" and emphasized the orthodoxy of Chinese culture. The government vigorously promoted Mandarin, or Standard Chinese, requiring its use in schools, the military, and government agencies, while the use of local languages such as Tâi-gí, the Taiwanese language, was restricted.

Changes in International Status

In the early period after the relocation, the KMT government still held the Republic of China's seat at the United Nations and represented China in international affairs. Against the backdrop of the U.S.-Soviet Cold War, Taiwan, as a member of the "free world," received support from the United States and other Western countries.

As the division across the Taiwan Strait became entrenched, the international community saw the emergence of the complex situation of "two Chinas." Some countries recognized Taipei, while others recognized Beijing, producing a split in international society.

In 1971, the United Nations passed a resolution recognizing the People's Republic of China as China's sole representative, and the Republic of China lost its UN seat. This became a major turning point in Taiwan's international status.

📝 Curator's Note
Taiwan's international status, from UN membership in 1949, to withdrawal from the UN in 1971, to today's "de facto independence and diplomatic predicament," is a complex story about sovereignty, realpolitik, and international recognition.

The Transition from Authoritarianism to Democracy

On April 5, 1975, Chiang Kai-shek died. Under the constitution, then-vice president Yen Chia-kan succeeded him as president¹⁴. In 1978, Yen completed his term and handed power to then-premier Chiang Ching-kuo.

During his tenure, Chiang Ching-kuo advanced a series of reforms, including lifting martial law in 1987, lifting the ban on political parties in 1987, lifting restrictions on newspapers in 1988, and allowing visits to relatives in China in 1987. These reforms opened the concrete process of Taiwan's democratization.

✦ "This was a historical inevitability, and also the helplessness of the times." — Yen Chia-kan

This sentence appears in interview records held by the National History Museum. It is both Yen Chia-kan's assessment of the government's 1949 relocation to Taiwan and his annotation on an entire era. From authoritarianism to democracy, Taiwan's transition involved neither a peaceful handover nor a bloody revolution; it was a slow loosening in the form of an "inevitable helplessness."

Historical Afterlives

At midnight on July 15, 1987, Chiang Ching-kuo lifted martial law. That night, there were no firecrackers in Taiwan's streets and no celebrations, only countless families silently watching the news in front of their televisions. An era had ended, just as Yen Chia-kan said: "This was a historical inevitability, and also the helplessness of the times."

Today, about 15% of Taiwan's population are descendants of waishengren groups. Their names, their memories, and their languages have already become part of Taiwan. The history of the KMT government's relocation to Taiwan and postwar reconstruction has gradually moved beyond the single framework of an "external regime" and come to be understood as a history in which an "immigrant community" and local society intertwined and reorganized each other.

If, in 2050, someone wants to know what Taiwanese people in 1949 cared about, what they read may be these Markdown files.

References

Further Reading: Martial Law Era, White Terror, 228 Incident, Taiwan Economic Miracle