Taiwan Is Rich, Productive and Suffers a National Identity Crisis : Chinas: The Beijing regime still represents repression; the Taipei regime still represents a desire for reunification that does not fit reality.

While so much of the world is regrouping and even reunifying, the problems of two Chinas persist--a return to repression in Beijing and an identity crisis in Taiwan.

Taiwan enters the 1990s with one of the most enviable economic track records in the world. Enjoying more years of double-digit growth than any nation, including rivals in the Pacific Basin, its per-capita income has soared to $7,500--more than three times that of such European states as Poland and 25 times that of the rival regime on the Chinese mainland.

Taiwan’s trade surplus last year rose to nearly $14 billion and its foreign reserve holdings, second only to Japan’s, are estimated well above $70 billion. Its highly educated work force--nearly 45% of Taiwanese high school students go on to post-secondary education--and ingenious entrepreneurs position the nation for further leadership in such fields as personal computers, chemicals and semiconductors.

Yet behind prosperity lies an increasingly troubled nation, caught between conflicting identities and lacking even the most basic sense of purpose. On the one hand, the Republic of China, Taiwan’s official name, exists as an astonishingly successful developing nation. On the other, the ruling Kuomintang government--holdovers of the Nationalists expelled from China in the late 1940s--still sees itself as the legal and rightful rulers of the mainland.

This remains Taiwan’s central political creed. Earlier this month, the opening of the Assembly was marked by screaming and kicking between representatives long ago elected on the mainland and a minority of younger members who demand a Legislature reflecting current realities.

Some Taiwanese, supported by elements of the opposition Democratic Progressive Party (DPP), see turning Taiwan’s de facto independence into a fact as the only reasonable way out of this dilemma. They point out that Taiwan’s vast financial reserves, its status as the world’s 13th-largest trading nation and a well-equipped army qualify for the family of nations, bringing a dowry far bigger than most.

“The crucial issue for our future is to have an identity and the identity we need is a Taiwanese one,” claims Dr. Lu Hsia Yi, a one-time political prisoner and now a leader of the DPP. “We have to make it clear what Taiwan is about. We do not want Taiwan to be a problem of China. After Taiwan is independent, then we can think about cooperation with China.”

But even those sympathetic to an independent Taiwan question the wisdom of such a move. Not only could an open declaration of independence reignite the dinosaurs inside the ruling Kuomintang, it could spark a violent reaction from the increasingly isolated and xenophobic communist regime in Beijing.

Rather than taking the risk associated with challenging the dogmas of either the ruling Nationalists or Beijing, most Taiwanese have contented themselves with making money and taking care of their families. Concern with the larger issues of society have been shoved into a back seat.

“People here tend to work hard, save money and try very hard to get an education for their children, but the cultural and social institutions have not developed,” explains Hei-yuan Chiu, a sociologist at National Taiwan University. “We have had advancement of economics, but a crisis in our culture.”

Observers like Hei see this “crisis” in everything from a lack of basic courtesy to an absence of ethics. To some, Taipei has begun to resemble Shanghai before World War II: fast-paced, materialistic and morally corrupt. People liken Taiwan to a floating crap game, jokingly referring to “the Republic of Casino.”

Indeed money fever is everywhere. People line up six mornings a week to participate in the overheated stock exchange, its index having soared fourfold between January, 1988, and June, 1989. Investment in stocks and real estate have boosted land prices to Tokyo-like levels of absurdity. Speculation is rapidly replacing manufacturing as the major interest for all classes. One small family-owned industry recently shut down because workers had deserted the assembly line for the get-rich-quick allures of the stock market.

Obsession with wealth has other, uglier sides. Crime has rapidly increased over the last few years--41% between 1988 an 1989 alone--including a string of kidnapings of wealthy persons. “The businessman has to have protection here,” noted Sam Chang, the Harvard-educated president of a Taipei securities firm. “It’s becoming a lawless society.”

Another byproduct of money hunger is the highly polluted environment around Taipei and other major cities. Until recently, those cities paid about as much attention to environmental controls--from sewers to smog abatement--as much poorer Third World nations. Even a runner accustomed to Los Angeles smog finds exercising in the acrid air of Taipei almost impossible.

But the effluent of prosperity is not the only cloud hanging over Taiwan. The communist threat may be receding in Europe but recent events in mainland China--notably the brutal crackdown on dissent--has increased the potential threat of invasion from across the Taiwan Straits. Concerned about Taiwanese support for the worldwide China democracy movement, Beijing has recently taken the unusual step of issuing not-so-veiled threats about the consequences of such support, further rattling nerves in Taipei.

Together, these conditions are creating a growing exodus of both money and people from the island. Despite a burgeoning economy, capital is fleeing the country, largely to lower-wage nations in Southeast Asia and North America. As much as $15 billion, according to Central Bank estimates, has flowed out of the country over the last two years.

Even more discouraging has been an increasing outflow of talented people and families. The return of roughly 500 engineers, entrepreneurs and managers to Taiwan has been well-publicized in the local and U.S. press. Yet behind this story lies a larger reality: More than 168,000 Taiwanese emigrated between 1984 and 1988, mostly to the United States, Canada and Australia. Today this emigration, according to government sources, is growing, with estimates of out-migration last year reaching as high as 60,000.

Many of those leaving represent the flower of Taiwan’s hard-earned success. Last year alone, 20 young people at Hewlett-Packard’s Taipei office applied for assignments that would provide opportunity to emigrate to North America or Australia.

“It’s a problem of atmosphere and environment, the whole way of life,” explained one young engineer, saying one in five at his office plans to emigrate. “As long as you have money, people seem to respect you no matter how you get it. When we talk at the office, everyone says the lack of value is the problem. That makes people want to leave.”

In contrast to the emigres, the returnees are mostly older executives who have already gained managerial and technical experience in the United States or elsewhere. In contrast to their protestations of patriotic intent, most seem more interested in the ample opportunities presented by cheap capital, a well-educated work force and a burgeoning economy. Their long-term commitment can be measured by the number who have chosen to keep their families in the safer, more pleasant environments of North America or Australia. These returnees, some of whom commute monthly across the Pacific, are widely referred to as tai kun fai jen, or “spacemen.”

“We have to reach for a high, non-material sense of value for this society,” commented Paul Hsu, a prominent Taipei attorney close to government circles. “The old Kuomintang ideology is becoming irrelevant, so we need to replace it with something that appeals to the middle class which seeks a democratic and open society.”

Unlike the Taiwan independence activists and traditional nationalists, Hsu and other reformers wisely avoid the troublesome legalities of Taiwan’s status. Their goal is building a new kind of society, blending traditional Chinese values with democratic and capitalist ideals largely borrowed from the West.

Still in embryonic form, such efforts are important in the long term, and not only for Taiwan. As home to a truly democratic and open Chinese society, Taiwan by its very existence would do more to undermine the troglodytes in Beijing than all the weaponry in its arsenals or bank notes in its vaults. By reforming Taiwan, they would take the first necessary steps toward creating a democratic model for an ancient race that accounts for one-quarter of humanity.