
The sign in the picture above is a rather extreme statement. But it's also a logical conclusion to the legal and political arguments I summarized before, and a sign of how desperately some Taiwan wish to maintain their hard-won democracy, freedom, and independence from Chinese despotism: independence that the KMT gravely threatens with their recent head-long rush into financial and economic integration with the authoritarian People's Republic of China. Notice the same flag, again: the island of Taiwan attached to the American flag.
It's a fact that between 1946 and 1949, the US government, as principal occupying power of Taiwan, considered removing the Republic of China (ROC) administration from power in Taiwan (the ROC was simply the "subordinate occupying power" of Taiwan at the time) and replacing it with a United Nations-administered government due to Chiang Kai-shek's (蔣介石) utterly corrupt and depraved governance of Taiwan (especially after the 228 massacre). After Chiang and the KMT lost the Chinese civil war to Mao Ze-dong and the communists and retreated to Taiwan in 1949, the US government then considered just washing their hands of him and letting the commies take Taiwan.
Chiang Kai-shek was nicknamed "Peanut-head" by US generals, so great was his incompetence. What saved Chiang's ass was Communist China's invasion of Korea in 1950, which forced Truman to draw a line in the sand against further communist expansion in SE Asia by sending the 7th Fleet into the Taiwan Strait, and throw American support behind Chiang's corrupt government. How tragic for the Taiwanese that they were stuck with this pathetic loser and his corrupt, defunct ROC government for next 60 years.
Democratic Progressive Party (DPP) Chairwoman Tsai Ing-wen found herself in some hot water recently for stating the truth: the Republic of China (ROC) is a government-in-exile.
Poor Taiwan, continuing in its weird political purgatory. If you speak the truth-- that the Republic of China is an alien, colonialist government that serves only one purpose: to keep the KMT in control of Taiwan's identity, wealth and culture, and that nearly everything that the KMT has done to Taiwan since 1946 has no legal basis in international law -- than you are sure to cause a political firestorm and be branded a "trouble-maker."
And of course, Tsai's honesty exposes the inherent paradox of the DPP: it seeks to gain political control (through democratic means) of a government it sees as illegitimate (because the Republic of China was never established in Taiwan through democratic or legal means) and seeks to replace the ROC with a legal, democratically created Republic of Taiwan, along with a new constitution, flag, national anthem, and all the trappings of a legitimate government.
Of course, neither the KMT or their allies, the Chinese Communist Party, will ever allow such a development to occur. They'd rather destroy Taiwan in war and wash the island with blood than loose their grips on Taiwan identity, economy and culture.
For the DPP, the ROC is just a shell, the only available vehicle for carrying Taiwan's inherent sovereignty and independence until such time that a formal, internationally recognized Republic of Taiwan can be established. Thus, the pro-green side both need the ROC to continue Taiwan's democratic transformation and governance, and despise the ROC as being illegitimate and colonialist at the same time.
For the KMT, the ROC somehow magically floats right on top of Taiwan, a part of Taiwan, yet apart. Taiwan, to them, is just a "region" of the ROC, whose boundaries actually comprise the old Qing Empire: China, Tibet, East Turkestan (also called Xinjiang), AND Mongolia. Taiwan was just thrown in, by statue, at the last minute in 1947. This concoction is pure fantasy, of course. Mongolia is an independent country. Tibet and East Turkestan are, in no way, administered by the ROC government in Taiwan. Rather, they are coerced colonies of the new Chinese Empire, better known as the People's Republic of China.
Of course, the KMT and their version of the "shell" country called the ROC also serve one other purpose: as a kind of religious cult-- based on the faith article of "return to mommyland." This religious faith, through 60 years of violence and coercion on the hapless Taiwanese, have allowed the Chinese who fled here in 1949 from ever losing face or facing the reality that they LOST both the Chinese civil war AND China. They can continue in their little ideologically-blinded fantasy land that believes that if they can't return to China, then China will return to THEM! Come hell or high water or murdered Taiwanese, if need be.
The vast majority of Taiwanese citizens, who, with time and intermarriage, now comprise a light blue/light green continuum, in recent polls show a general support for "the status quo." To them, the official name of the government and its constitution are meaningless quibbles between selfish children. They generally only require a half-way functional government who can keep them relatively safe, keep the trains and buses running on time, and keep the economy humming. Notions like democracy and freedom or even the environment are abstract concepts that mean little to them. Making money and accumulating social status are the main concerns for the vast majority of Taiwanese of all ethnic backgrounds, in my experience.
And thus Taiwan's long, 60-year purgatory of KMT-imposed governmental illegitimacy and non-recognition will continue into the indefinite future.
And thus Taiwan's long, 60-year purgatory of KMT-imposed governmental illegitimacy and non-recognition will continue into the indefinite future.

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