TAIWAN: LOOKING TOWARD THE FUTURE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000101320001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: October 30, 2009
• Sequence Number: 1
• Publication Date: April 17, 1985
• Content Type: REPORT

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+(1 G i
Centu, Intelligence Agency 25X1
6~ 11L 4-IA~T &
DIRECTORATE OF INTELLIGENCE
17 April 1985
Taiwan: Looking Toward the Future
Summary
As Taiwan enters its fourth decade of
Kuomintang (Nationalist Party-KMT) rule, it faces a
series of domestic and foreign problems that have
created an atmosphere of political frustration and
uncertainty, among both the ruling mainland elite
Domestic Concerns
President Chiang Ching-kuo
has been frustrated in his attempts to construct a viable
lan
p
for his succession and has failed in his efforts to establish a
consensual government of senior, conservative party elders and
younger, moderate mainlanders and Taiwanese. The incapacitation
of Chiang's heir apparent, a moderate technocrat, in 1984 has led
to a rise in influence of the conservative old guard, whose
primary concern is maintaining the status quo. The conservative
resurgence has increased the alienation of younger, more moderate
politicians, both in the party and government who favor moderate
political and economic reforms that will allow Taiwan to maintain
its rapid economic growth while opening up the political arena to
a broader spectrum of the population. As a result, factional
infighting has increased, and heightened tensions among top party
and government leaders have been reinforced by rumors that the
President intends to reorganize the government later this spring.
This memorandum was prepared by China
Division, Office of East Asian Analysis, was requested by
Department of Treasury. Comments and questions are welcome
and should be cted to Chief, Foreign Affairs Branch,
OEA, E EA M 85-10078
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The government has been rocked by a succession of political
and economic controversies in the last year that have damaged its
credibility. For example:
-- Several coal mine disasters in the summer of 1984 led to
calls in the Legislative Yuan for the resignation of the
Premier and Minister of Interior.
-- A series of sensational articles in the opposition press
on the private lives of the Chiang family heightened
tensions between the government and the predominantly
Taiwanese opposition.
-- The January 1985 disclosure that three members of Taiwan's
Defense Intelligence Bureau were involved in the murder of
Chinese-American writer Henry Liu seriously damaged the
governments' "clean image."
-- The forced resignation in February of the moderate head of
the KMT called into question the President's intention to
liberalize the party.
-- The Tenth Cooperative Banking scandal that led to the
arrest and conviction of a legislator and resignation of
the Minister of Economic Affairs.
Foreign Affairs
At the same time, there has been a hardening of Taiwan's
foreign policy line, particularly with regard to its unofficial
relationship with United States, and its membership in
international organizations. This hardening is a result of
Taiwan's growing sense of diplomatic isolation, fed by:
-- Improvements in US-China relations.
-- Increased Chinese efforts to undermine Taiwan's diplomatic
ties in Latin America.
-- The improvement in unofficial relations between China and
Singapore and South Korea.
-- The signi ffina-UK accord on Hong Kong's
future.
In addition, Taiwan's recent attempts to increase the
"officiality" of its relationship with the United States probably
is a result of Taipei's perception that the Reagan administration
i
s sympathetic to its concerns and, with an intensive lobbying
ff
e
ort, might upgrade Taiwan's status in Washington.
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Looking Down the Road
Despite these problems we believe the short-term outlook for
Taiwan is generally good. Taiwan's economy has continued to
expand, and its population enjoys an extremely high standard of
living. President Chiang's health, however, injects an element of
uncertainty. If Chiang dies without a viable succession
arranged, we believe that factional infighting between the hard-
line old guard and the moderate younger generation will
escalate. Although a post-Chiang government probably will hew to
policies established by Chiang, a struggle for control of the
policy-making apparatus could jeopardize the prospects for
moderate reforms. The political opposition on the island is
splintered, however, and we do not believe they pose any
significant threat to the stability of the regime.
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Central Intelligence Agency
Original - Requester
1 - DDI (7E47)
1 - Executive Director (7E12)
1 - D/OEA (4F18)
2 - OEA/CH (4G32)
1 - OEA/CH/DOM (4G32)
1 - OEA/CH/DEF (4G32)
1 - OEA/CH/DEV (4G32)
1 - OEA/CH/FOR (4G32)
1 - OEA/Production Staff (4G48)
1 - PDB Staff (7F15)
1 - NIO/EA (7E47)
1 - C/PES (7G15)
1 - C/DO/PPS (3D01)
1 - C/EA/0 (5E18)
2 - OCR/DSG (7G15)
1 - CPAS/ILS ((7G15)
5 - CPAS/IMS/CB (7G15)
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