Standard of living
Expatriates in Taiwan enjoy one of the highest standards of living in Asia. The economy is strong, the country is technologically advanced, inflation and unemployment are low, and the culture is rich. Taiwan has become a major investor in mainland China, Thailand, Indonesia, the Philippines, Malaysia, and Vietnam.
On the other hand, the country is densely populated with people living fast-paced lives. Taiwan's infrastructure, though extensive, cannot easily support metropolitan traffic. Taipei's roads are congested and the railway system is generally overbooked at peak travel times.
The defining characteristic of Taiwan's international relationships is it's lack of diplomatic ties with most nations of the world. Taiwanese authorities call their administration the Republic of China, and for many years claimed to be the legitimate government of all of China. Foreign nations wishing to establish diplomatic relations with a government of China could recognize either the Republic of China - Taiwan - or the People's Republic of China (PRC) - mainland China. They could not recognize both, and most chose the PRC.
Taiwan's authorities no longer insist that they are the sole legitimate rulers of all of China. Instead, they admit that Taiwan is part of China and they seek recognition as one of two political entities in China, along with the PRC.
Note that, despite political tensions, China is Taiwan's largest export market.
Taiwan's political strength evolves
Taiwan's constitution provides for an executive with a president elected for a four-year term and a prime minister and cabinet selected by the president but responsible to Parliament. There is a 225-member unicameral legislature, the Li fa Yuan. A constitutional amendment has been proposed that would reduce the legislature to 113 seats in 2007.
Taiwan's first direct presidential election was held in 1996, causing increased tension with the PRC. The election was won by the KMT and the tension subsided. However, in the second presidential election in March 2000, the opposition party, the Democratic Progressive Party (DPP), defeated the KMT. Because the DPP has advocated full independence for Taiwan, tension with the mainland escalated again. Since that time, and with the pro-independence Chen Shui-bian winning a second presidential term in 2004, it has become more acceptable to discuss Taiwan's independence publicly.
In parliamentary elections held on December 1, 2001, the KMT lost its parliamentary majority for the first time in 50 years and the DPP became the largest party in the legislature. This strengthened the hand of those opposing evenual reunification with mainland China. In June 2005, a reform was passed that would allow changes to the constitution by public vote.