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Regime in Taiwan

Despite an ostensibly democratic constitution, the government under Chiang was a de facto one-party state, consisting almost completely of mainlanders; the " Temporary Provisions Effective During the Period of Communist Rebellion " greatly enhanced the executive's powers, and the goal of retaking mainland China allowed the KMT to maintain a monopoly on power and to prohibit real parliamentary opposition. The government's official line for the martial law provisions stemmed from the claim that emergency provisions were necessary since the Communists and the Nationalists were still in a state of war. Seeking to promote Chinese nationalism, Chiang's government actively ignored and suppressed local cultural expression and even forbade the use of local languages in mass media broadcasts or during class sessions. As a result of Taiwan's anti-government uprising in 1947, known as the February 28 incident, the KMT-led political repression resulted in the death or the disappearance of up to 30,000 Taiwanese intellectuals, activists, and people suspected of opposition to the KMT.

The first decades after the Nationalists had moved the seat of government to the province of Taiwan are associated with the organized effort to resist Communism, which was known as the "White Terror"; about 140,000 Taiwanese were imprisoned for their real or perceived opposition to the Kuomintang. Most of those prosecuted were labeled by the Kuomintang as "bandit spies" (匪諜), meaning spies for Chinese Communists, and punished as such or "Taiwanese Separatists" (台獨分子).

Under the pretext that new elections could not be held in Communist-occupied constituencies, the National Assembly, Legislative Yuan, and Control Yuan members held their posts indefinitely. The Temporary Provisions also allowed Chiang to remain as president beyond the two-term limit in the Constitution. He was re-elected by the National Assembly as president four times: in 1954, 1960, 1966, and 1972.

Believing that corruption and the lack of morals were key reasons that the KMT had lost mainland China to the Communists, Chiang attempted to purge corruption by dismissing members of the KMT who were accused of graft. Some major figures in the previous mainland Chinese government, such as Chiang's brothers-in-law H. H. Kung and T. V. Soong, exiled themselves to the United States. Although politically authoritarian and, to some extent, dominated by government-owned industries, Chiang's new Taiwanese state also encouraged economic development, especially in the export sector. A popular sweeping Land Reform Act, as well as American foreign aid during the 1950s, laid the foundation for Taiwan's economic success to become one of the Four Asian Tigers. After retreating to Taiwan, Chiang learned from his mistakes and failures in the mainland and blamed them for failing to pursue Sun Yat-sen's ideals of Tridemism and welfarism. Chiang's land reform more than doubled the land ownership of Taiwanese farmers. It removed the rent burdens on them, with former landowners using the government compensation to become the new capitalist class. He promoted a mixed economy of state and private ownership with economic planning. Chiang also promoted a nine-year free education and the importance of science in Taiwanese education and values. Those measures generated great success, with consistent and strong growth and the stabilization of inflation.

After the government of the Republic of China had moved to Taiwan, Chiang Kai-shek's economic policy turned towards to economic liberalism and used Sho-Chieh Tsiang and other liberal economists to promote economic liberalization reforms in Taiwan.

However, Taylor has noted that the developmental model of Chiangism in Taiwan still had elements of socialism, and the Gini index of Taiwan was around 0.28 by the 1970s, which was lower than the relatively-egalitarian West Germany. ROC (Taiwan) was one of the most equal countries in the pro-western bloc. Those in the lower 40% of income doubled their share to 22% of the total income, with the upper 20% shrinking their share from 61% to 39%, from the time of Japanese rule. The Chiangist economic model can be seen as a form of dirigisme, with the state playing a crucial role in directing the market economy. Small businesses and state-owned enterprises in Taiwan flourished under the economic model, but the economy did not see the emergence of corporate monopolies, unlike in most other major capitalist countries.

After the democratization of Taiwan, it began to slowly drift away from the Chiangist economic policy to embrace a more free market system, as part of the economic globalization process under the context of neoliberalism.

Chiang had the personal power to review the rulings of all military tribunals, which during the martial law period tried civilians as well. In 1950, Lin Pang-chun and two other men were arrested on charges of financial crimes and sentenced to 3–10 years in prison. Chiang reviewed the sentences of all three and ordered them executed instead. In 1954, the Changhua monk Kao Chih-te and two others were sentenced to 12 years in prison for providing aid to accused communists. Chiang sentenced them to death after he had reviewed the case. That control over the decision of military tribunals violated the ROC constitution.

After Chiang's death, the next president, his son, Chiang Ching-kuo, and Chiang Ching-kuo's successor, Lee Teng-hui, a native Taiwanese, would in the 1980s and 1990s increase native Taiwanese representation in the government and loosen the many authoritarian controls of the early era of ROC control in Taiwan, paving way for the democratization process.