- Taiwan has a long history of settlement and rule by various powers, including aboriginal peoples, the Dutch, the Qing dynasty of China, Imperial Japan, and the nationalist Kuomintang government of the Republic of China. - After being defeated by the Chinese Communist Party in 1949, the Kuomintang-led government retreated to Taiwan and established control over the island. Taiwan then transitioned to a democratic system in the late 20th century. - Today, Taiwan has a dynamic capitalist economy but its political status remains ambiguous, as China claims sovereignty over the island and refuses to renounce the use of force, while many Taiwanese support de facto independence.