Taiwan, which its government formally calls the Republic of China (ROC), is a success story for U.S. interests in the promotion of universal freedoms and multiparty democracy. Taiwan's people and their leaders transformed politics from rule imposed from the outside with authoritarian abuses to relatively peaceful achievement of self-government, human rights, and democracy. The purpose of this CRS report is to succinctly discuss Taiwan's transformation and current concerns, with particular attention to the role of Congress and implications and options for U.S. policy. For centuries, forces and peoples from various Asian and European countries landed on the island called by the Portuguese name of Formosa (from "Ilha Formosa" for "Beautiful Island"). In more modern history, Taiwan's people did not enjoy democratic self-government until the first direct presidential election in 1996. The Qing Empire had incorporated Taiwan as a province in 1885. Then, under the Treaty of Shimonoseki of 1895, the Qing rulers of China ceded in perpetuity Formosa and the nearby Pescadores islands to Japan. Japan ruled Taiwan as a colony until the end of World War II in 1945. According to the Kuomintang ( KMT ), or Nationalist Party of China and the ruling party of the Republic of China (ROC) that replaced the Qing rulers in 1912, KMT forces claimed the ROC's sovereignty over Taiwan on October 25, 1945, upon Japan's surrender. Generalissimo Chiang Kai-shek dominated the KMT and the ROC's political and military power from the 1920s until his death in 1975. After the KMT lost the civil war on mainland China to the Communist Party of China (CPC) in 1949, Chiang Kai-shek as the commander of the KMT's military and ROC's president (he was elected by a National Assembly in 1948) retreated with their forces to Taiwan and ruled its local people. When he died, his son, Chiang Ching-kuo, ruled as the KMT chairman and ROC president from 1978 until his death in 1988. His vice president, Lee Teng-hui, took over as the president. Lee was re-elected in Taiwan's first direct, democratic presidential election in 1996. That Lee was the first president born in Taiwan was significant. Until democratization, the local majority "Taiwanese" people (about 85% on the island) felt oppressed under what they called the "White Terror" of the imposed rule of the KMT and its "Mainlander" supporters who fled to Taiwan in 1945-1949. Still, Taiwan has never been ruled by the CPC regime under the People's Republic of China (PRC) based in Beijing that claims Taiwan as belonging to "China." While many governments face political divisions, Taiwan has the added complexities of ambiguous national and ethnic identities and unsettled sovereign status. The opposition Democratic Progressive Party ( DPP ), formed in 1986, and its candidate Chen Shui-bian won the presidential election in 2000. Taiwan enjoyed a second democratic transfer of power in 2008, when the KMT's Ma Ying-jeou won the election for president. The ability of Taiwan's people to exercise democratic determination of policies affects U.S. interests. While U.S. policy does not support or oppose a particular outcome for the settlement of Taiwan's status, the United States has stated its stance on the process for how the Taiwan question will be determined. In the U.S.-PRC "Shanghai Communique" of 1972, President Richard Nixon stated the U.S. interest in "a peaceful settlement of the Taiwan question by the Chinese themselves." The Taiwan Relations Act (TRA) , P.L. 96-8 , that has guided U.S. policy toward Taiwan since 1979, stipulated that U.S. diplomatic recognition of the PRC rested upon the expectation that "the future of Taiwan will be determined by peaceful means." Also, in 2000, President William Clinton added the U.S. expectation that dispute over Taiwan would be resolved "with the assent of the people of Taiwan." Lastly, in 2003 President George W. Bush declared U.S. opposition to "any unilateral decision by either China or Taiwan to change the status quo." U.S. policy has played important roles in Taiwan's transition to democracy, by decreasing Taiwan's sense of insecurity through arms sales and other contacts even after terminating the mutual defense treaty with and diplomatic recognition of the ROC in 1979, by continuing business ties that have provided for prosperity, and by pressing the KMT regime to end authoritarian abuses of power in favor of freedoms for all the people in Taiwan, including the majority Taiwanese. Thus, a premise for policy has been that U.S. support has increased the security of Taiwan's government to help give it confidence to carry out internal and external policies that advance U.S. interests. Another premise with salience for Taiwan has been that it presents a successful model of a democracy in a culture with roots in China, with implications for U.S. interests beyond Taiwan. Taiwan's respect for democracy and human rights has affected the extent of U.S. support, including support for arms sales for Taiwan's self-defense. Representative Henry Hyde , Chairman of the House International Relations Committee, said in Beijing in December 2002 that "the bedrock of the very strong support for Taiwan in the U.S. Congress" is the shared experience as democracies. He highlighted Taiwan's model as a "Chinese democracy" that proved democracy is compatible with Chinese culture. At a hearing of that committee on the 25 th anniversary of the TRA in April 2004, Representative James Leach , Chairman of the Subcommittee on Asia and the Pacific, noted his pride in authoring the TRA's section on human rights. He also stated that "all Americans strongly identify with Taiwan's democratic journey." He said that the "miracle of Taiwan's peaceful democratic transition is of great significance not only to the 23 million citizens of Taiwan, but also to the billion residents of the Chinese mainland who have yet to enjoy the political freedoms many Taiwanese now take for granted." On the day of Taiwan's presidential election in March 2008, President Bush called Taiwan a "beacon of democracy" to the world. Taiwan has helped the expansion of partners in Asia that share U.S. values in freedom and democracy. At the same time, some in Congress have taken into account Taiwan's different voices for self-determination or independence, in addition to democracy. After two democratic transfers of power, Taiwan has an unfinished story in promoting rule of law and maintaining a strong multi-party system, and this process has implications for U.S. economic, political, and security interests. The distrust of some Taiwanese lingers from past experiences with the KMT's authoritarian abuses. Partly because that record involved activities even on U.S. soil, Congress has a legacy of active support for Taiwan's democratic reform and for some goals of Taiwanese-Americans. Also, the persistent mutual suspicion between the KMT and DPP has exacerbated the polarized, partisan battles that have challenged effective governance, bipartisanship, and consensus-building, including implementation of policies that benefit U.S. interests. Good governance and rule of law affect U.S. businesses operating in Taiwan, the 10 th largest trading partner of the United States in 2009. Further, while a coup is unlikely, Taiwan's military continues to push professionalization that includes the de-politicization of the military from loyalty to the KMT to loyalty to the nation as well as toward civilian control. Moreover, given concerns about Taiwan's closer ties to or separation from the PRC, any assessment of critical changes to challenge stability would be based on confidence in Taiwan's democracy. Strong checks and balances moderate extreme options to change the U.S.-supported status quo in the Taiwan Strait. A sustainable democracy helps Taiwan to guard against undue PRC influence as cross-strait engagement has intensified since 2008. Finally, a Taiwan that promotes values of democracy and freedom would be more likely to be strategically oriented in alignment with the United States and U.S. allies in Asia and Europe. Successive U.S. presidents tended to support the ROC, or Taiwan, as an ally against Communist movements in mainland China and elsewhere. If there was U.S. pressure on the KMT dictatorship to alleviate authoritarian abuses under Martial Law, the messages were largely quiet and unpublicized. The U.S. military worked with Taiwan's military, with a Military Assistance Agreement, Mutual Defense Treaty (from 1954 to 1979), and assignment of a Military Assistance Advisory Group (MAAG). The MAAG included officers from the U.S. Army's Judge Advocate General (JAG) Corps. One officer assigned to the MAAG in Taiwan from 1973 to 1976 believed that the military justice system of the Taiwan Garrison Command was generally fair. He recounted that most U.S. personnel stationed in Taiwan were happy under Martial Law. For local citizens, the Taiwan Garrison Command tried defendants for alleged civilian crimes, including executing 12 people for robbery in two months, from December 1975 to January 1976. At a congressional hearing on human rights in Taiwan held by the House Subcommittee on International Organizations in June 1977, driven in part by concerns about the Taiwan Garrison Command, the State Department's witness testified that Taiwan's situation had improved but acknowledged problems.