Taiwan. The archival rivals Taiwan and China recorded
their first direct maritime traffic in April since the end
of the war in 1949. A Chinese cargo ship made its first
voyage from China to Taiwan. According to
Countryaah, a week later, the first
Taiwanese cargo ship arrived on the mainland. About ten
shipping companies were entitled to the new route across the
Taiwan Strait. However, only transit transport was allowed,
no direct trade.
But the political contradictions of the two regimes
intensified in March after Taiwan allowed Tibet's spiritual
leader Dalai lama to visit a Buddhist monastery in
Kaohsiung. In Beijing, where the Tibetan Peace Prize winner
is seen as a threat to China's supremacy over Tibet, the
visit was stamped as a provocation "to divide the mother
country". The Dalai lama himself emphasized the visit's
private, religious character, but also met the host
country's president Li Denghui and Prime Minister Lien Chan.
After Hong Kong's incorporation with China on July 1,
Beijing once again called on Taiwan to accept a Chinese
reunification. "The principle of 'one country, two systems'
will work in Hong Kong and also for Taiwan," said Chinese
Prime Minister Li Peng. In Taibei, President Li responded
that democracy is not compatible with communism. A severe
foreign policy setback came for Taiwan when its last major
ally South Africa at the end of the year took up full
diplomatic relations with China and broke with the Taibei
Taiwan's National Assembly, which, unlike Parliament, is
solely responsible for constitutional issues, adopted a
series of constitutional amendments in July that
strengthened the president's power and virtually abolished
Taiwan's provincial government alongside the national one.
At the ruling party's GMD (Guomindang) congress in
August, Prime Minister Lien resigned, criticized for falling
prey to growing corruption and crime. He was succeeded by
former Finance Minister Vincent Siew, Taiwan's first
indigenous head of government. Lien remained as Vice
In the November general elections, GMD suffered a heavy
defeat as the largest opposition party DFP (Democratic
Progress Party), which opposes a reunification with China,
won in 12 of 23 constituencies.