When the Nationalist General Ch'en I received the Japanese surrender in Taipei on 25 October 1945 and took over as governor of Taiwan province, he assumed control of an area with a history very different from that of other parts of China. Settled relatively late, mainly by Chinese from Fukien province during and after the sixteenth century, Taiwan became a Japanese colony in 1895. The changes in material conditions and attitudes of the people of Taiwan during the fifty years of Japanese rule affected in important ways the subsequent development of Taiwan under the Nationalists.

An early and central objective of the Japanese was the establishment of law and order among a sometimes rebellious people. First through military operations and later through the creation of an extensive police apparatus, the Japanese introduced an administrative and legal system that fostered an orderly and peaceful society. Strict, and at times harsh and arbitrary, the Japanese rulers created an environment conducive to economic development and modernization that stood in sharp contrast to the civil war, warlordism, banditry, and military invasion by Japanese forces that plagued the Chinese mainland during the first half of the twentieth century.

Economic development in Taiwan was carried out along lines aimed primarily at benefiting the Japanese Empire rather than the people of Taiwan, but the process conferred on the Taiwanese a steadily rising standard of living. By 1945 the people of Taiwan enjoyed a style of life considerably more advanced than that of the average citizen on the mainland.