Though Chiang Kai-shek may vow to “sleep on faggots and drink gall” until the mainland is liberated, he has some reason to rest more easily today than at any time in his long career as Nationalist leader. On the mainland his government never clearly controlled more than one of China's three “key economic areas” (the Yellow River plain, the Yangtze valley, and the Szechuan basin). At least he can effectively control Formosa, a realm 1/260th the size of the mainland. Nationalist cells permeate schools, factories and government bureaux. Local police organisations, semi-autonomous in mainland days, are now under the central control of loyal mainlanders. The powerful security force, the Formosa Garrison Command (FGC), operates under martial law. The two minority parties are as impotent as their mainland counterparts. There are no treaty ports to harbour leftist critics and the mountainous half of the island is effectively patrolled by government forces painfully aware of the dangers of banditry and rebellion.

Fourteen years have elapsed since a shattered Nationalist Government fled to Formosa with the hope of reorganising and revitalising its forces and of building an effective base for a counter-attack against the Chinese Communists. At that time it appeared to have little chance of survival. However, because of changing international conditions and Formosa's impressive domestic economic performance, the Nationalist Government has been able to re-establish itself as an effective political force. Formosa's economic achievements have given the Government a certain international prestige and, combined with military assistance from the United States, have allowed it to maintain a large, well-equipped military establishment.

Formosa has the unenviable distinction of having proportionally more men under arms than any other country. With resources and manpower being poured into keeping approximately 600,000 men in readiness for an eventual return to the mainland the military presence inevitably pervades Formosan life. Military needs conflict with personal freedom and restrain economic growth. Yet for all the efforts of the Nationalist government—sustained by huge amounts of American aid—the changing international scene and difficulties within the Nationalist forces make a return to the mainland less likely as time goes by.

Nationalist China's diplomatic relations were in shambles as the disastrous year of 1949 came to a close. Major cities in southern China were falling rapidly to the Communists, Mao Tse-tung had arrived in Moscow on his triumphal trip and Chiang Kai-shek had fled to Formosa in bitter defeat. Only seven nations had established permanent missions in Formosa. Meanwhile, on the mainland a diplomatic never-never land existed; there were diplomats accredited to Peking, “negotiating representatives,” and ex-diplomats (in Chinese Communist eyes) whose countries had not recognised Peking.

America's policy towards Formosa has come under fire in recent months from all three groups of Chinese. The Nationalists and the Communists alike share the heritage that China is one state; some of the facts of international life, however, have given American policy a preference for accepting two Chinas in the world. The apparent American support for the Formosan independence movement is favoured neither by Peking nor Taipei. On the other hand the native Formosans criticise the contradictions and indecisions of American policy which, they say, encourages their democratic liberal movements, but at the same time helps Chiang Kai-shek to stay in office.

Until recent events so rudely contradicted them, the Nationalists officially regarded Mao Tse-tung et al. as a puppet government whose strings were pulled from Moscow; the Communists, for their part, have found it equally convenient to look at the Nationalists as a rebellious local government suffering under American “occupation.” However, in spite of the often renewed vows of one side to eliminate the other a sporadic dialogue has gone on between Peking and Taipei. This is not so surprising when one remembers the many short honeymoons which have occurred during the oft-renewed marriage of political convenience between the Nationalists and the Communists.

Chiang Kai-shek rebuilt his régime on Formosa not through his military might alone. Rather, he succeeded through rallying a group of intellectuals who could help him consolidate his rule on Formosa, work on propaganda, attract foreign aid and organise military control.

For decades, Formosa was a frontier for those people who set out from Kwangtung and Fukien in the waning days of the Ming dynasty, during the early part of the seventeenth century. By the time Koxinga defeated the Dutch in 1661 Formosa could claim a body of literature of its own. This, however, consisted mainly of histories and reports compiled by scholar-officials leaving an account of their stewardship, chronicles telling the story of settlement, cultivation and perennial skirmishes with the local aborigines, and poetry of the sort with which the learned men of China have traditionally amused themselves. This literature followed classical forms and was written in the traditional wen-yen.

In Taipei a pedicab driver, living on a dollar a day, waves a cheerful greeting. When he knows you better, he will roll up his sleeve and show the scars won by 28 years in the army—with never a victory in sight. Roast Peking duck, as succulent as ever, is brought to the table by a shouting waiter. Round the corner in the police station a twelve-year-old boy is beaten with bamboo rods for pilfering. Nearby lives one of the most famous Chinese scholars of the century. He would like to go on studying the ancient documents, but at eighty-eight he finds riding the rickety bus to the Academia Sinica a little too much. He totters in with tea and talks awhile with his guests. In his quiet moments he likes to write out classical poetry hi ancient calligraphy.

Eighteen years ago Formosa was liberated from half a century of Japanese colonial rule. When Kuomintang soldiers and administrators arrived to reassert Chinese sovereignty over the island province in October 1945 they were enthusiastically welcomed as liberators by the For-mosans. Within a few months, however, the Kuomintang had succeeded in alienating virtually all segments of the native population by inaugurating a military régime that treated Formosa as a conquered territory rather than a liberated area. The mass pillaging, official corruption and political repression that marked the early period of Kuomintang rule in Formosa set in motion the tragic events that culminated in the revolt of February 1947 in the course of which at least 10,000 Formosans were massacred. The Kuomintang has since done little to heal the scars of 1947 and today most of the 10,000,000 Formosans look upon the nearly 2,000,000 mainlanders who fled to Formosa with the collapse of Kuomintang rule as foreign overlords and describe the Chinese Nationalist régime as a colonial tyranny far more oppressive than the former Japanese rule. That the overwhelming majority of Formosans favour the establishment of an independent Formosan state, without ties to mainland China and, preferably, without the presence of mainlanders, is a fact that can no longer be ignored in considering the present condition and future status of Formosa.

The ancestors of the contemporary Formosans abandoned the Chinese mainland with its poverty and inequalities, in the latter half of the sixteenth century, and emigrated to Formosa in order to open up and settle in new territory. Yet they have had little independence. The Dutch East India Company conquered Formosa and used it as a commercial base between 1624 and 1661; Koxinga and his supporters expelled the Dutch in 1661 and used Formosa as an anti-Manchu base until 1683; then the Manchus of the Ch'ing Dynasty gained control of Formosa until 1895; the island was ceded to the Japanese in 1895 and it was not until the collapse of Japan hi 1945 that the Chinese Nationalist Government was able to rule Formosa.

It should not be difficult to understand that even if the device known as a “contract” in China is not a contract in the Western sense in terms of the descriptive definition offered at the beginning of the first part of this article, it may still perform some of the functions that contracts perform in the West. Further, in order to perform those functions it may be necessary that rules—laws—be adopted for purposes of efficiency and administrative convenience.

Ch'en Shao-yü, Ch'in Pang-hsien (Po Ku) and others of the “returned students” group later claimed they had opposed the June resolution of the CC. According to a Japanese source, opponents centred within the propaganda and labour departments hastily convened a Central Workers' Conference in late June to criticise the Li Li-san leadership. The article stated that Li was able to override this opposition through the support of Hsiang Chung-fa, Chou En-lai, Hsiang Ying and others. However, in fact, Ch'en Shao-yü had urged a virtual replica of the “Li Li-san line” including the use of the Red Army two years earlier, and just a month before the June resolution he had written:

Only those who are willing to protect the militarists, and the Iiquidationists who basically oppose armed uprisings can scold the CCP for preparing armed uprisings to seize power or term these actions adventurism….