Located to the southeast of the Chinese mainland opposite Fujian Province, the island province of Taiwan is flanked by the Pacific Ocean to the east and the Taiwan Straits to the west. Covering an area of 36,000 sq km, Taiwan includes Taiwan Island, the Penghu Islands and 80 other smaller neighboring islands and islets. Taiwan was called Yizhou or Liuqiu in ancient times. Records of Chinese people developing Taiwan in earlier periods are found in many historical documents. Beginning from the mid-12th century, the Chinese governments of different dynasties set up administrative bodies to exercise jurisdiction over Taiwan. The social development of Taiwan continued according to Chinese cultural traditions even during its 50-year occupation by Japan after the war of 1894. The Chinese government restored its administrative organs in Taiwan Province after victory in the War of Resistance Against Japan in 1945. On the eve of the founding of the PRC in 1949, the Kuomintang authorities retreated from the mainland to Taiwan. In 1950, the Korean War broke out, and the Untied States dispatched its Seventh Fleet to invade Taiwan and the Taiwan Straits. In 1954, the government of the United States and the Taiwan authorities signed a "Mutual Defense Treaty," bringing about the separation of Taiwan from the mainland.
The government of the PRC has made unremitting efforts to solve the Taiwan issue and realize the reunification of the country. In February 1972, when President Richard M. Nixon of the United States visited China, the two sides issued the Shanghai Communiqu¨¦. On January 1, 1979, the United States established official diplomatic relations with China, formally recognizing the government of the PRC as the sole legitimate government of China and Taiwan as a part of China and, at the same time announcing the "cessation of diplomatic relations" with the Taiwan authorities, the annulment of the "Mutual Defense Treaty" and the withdrawal of all its military personnel from Taiwan. Under these historical conditions, the Chinese government, out of consideration for the interests and future of the whole nation, put forward the basic policy of "peaceful reunification, and one country, two systems" in accordance with the principle of respecting history and reality, seeking truth from facts and taking into account the interests of all sides. The main points of the basic and related policies are:
China will do its best to achieve peaceful reunification, but will not commit itself to ruling out the use of force; will actively promote people-to-people contacts and economic and cultural exchanges between the two sides of the Taiwan Straits, and start direct trade, postal, air and shipping services as soon as possible; achieve reunification through peaceful negotiations and, on the premise of the one-China principle, any matter can be negotiated. After reunification, the policy of "one country, two systems" will be practiced, with the main body of China (the mainland) continuing with its socialist system, and Taiwan maintaining its capitalist system for a long period to come. After reunification, Taiwan will enjoy a high degree of autonomy, and the Central Government will not send troops or administrative personnel to be stationed in Taiwan. The resolution of the Taiwan issue is an internal affair of China, which should be achieved by the Chinese themselves, and there is no call for interference by foreign forces. The aforementioned principles and policies embody the basic stand and spirit of adhering to the one-China principle, and fully respect the Taiwan compatriots' wish to govern and administer Taiwan by themselves.
Since the publication by the Standing Committee of the National People's Congress ("NPC") on New Year's Day, 1979 of the Appeal to Compatriots in Taiwan, the Chinese government has resolutely implemented the basic policy of "peaceful reunification, and one country, two systems," advocated national reunification through negotiations, proposed that the two sides start direct trade, postal, air and shipping services ("three direct links" for short), and adopted sincere measures on our own initiative to promote the development of the relations between the two sides. Economically, it has opened its doors widely to welcome business people from Taiwan to make investments and engage in trade activities on the mainland, and protected their legal rights and interests. In addition, the Chinese government has actively promoted people-to-people contacts and bilateral exchanges in the fields of science and technology, culture, sports, academia and journalism; and authorized the mainland's Association for Relations Across the Taiwan Straits, a non-governmental organization, to establish relations with Taiwan's Straits Exchange Foundation, and engage in talks on economic and routine affairs. In 1992, the two associations reached an agreement, expressed orally, that both adhere to the one-China principle. The "Wang (Daohan)-Koo (Chen-fu) talks" held in April 1993 in Singapore, between the leaders of these two organizations signaled a historically important step forward in the development of relations across the Straits. In October 1998, Koo Chen-fu paid a visit to Shanghai and Beijing, and reached with Wang Daohan four points of common understanding on dialogues between the two organizations on political, economic and other issues.
On January 30, 1995, General Secretary of the CPC Central Committee and President of China Jiang Zemin delivered an important speech titled, "Continue to Fight for Fulfillment of the Great Cause of Reunification of the Motherland". In his speech, Jiang further expounded on the connotations of the policy of "peaceful reunification of the motherland, and one country, two systems," and put forward eight propositions, such as adherence to the principle of one China; peaceful negotiations between the two parties on both sides of the Taiwan Straits may be held step by step; China will do its best to achieve peaceful reunification, but will not promise not to use force; economic exchange and cooperation between both sides should be promoted; both sides should jointly inherit and carry forward the fine traditions of Chinese culture; hopes should be placed on Taiwan compatriots; all political parties and personages from different walks of life in Taiwan are welcome to visit the mainland and exchange opinions on the relations between the two sides and on peaceful reunification; and leaders of both sides should exchange visits in their proper capacities.
The above eight propositions fully embody the consistency and persistence of the CPC and the Chinese government on resolution of the Taiwan issue, and embody their determination and sincerity to develop cross-Straits relations and promote the reunification of the motherland. These suggestions have been warmly welcomed by the Chinese people at home and abroad, and aroused great attention among the international community. Following China's resumption of the exercise of sovereignty over Hong Kong and Macao, the Chinese people throughout the country eagerly hope that the Taiwan issue will be solved as soon as possible to realize the complete reunification of China.