ABSTRACT
Nineteen eighty-six was an eventful year in Taiwan. In the political arena, the Kuomintang announced decisions to suspend thirty-seven years of martial law and to legalize the formation of new opposition parties. On the domestic front, the economy was thriving despite problems derived from growing foreign protectionism and slow progress toward more hi-tech and capital-intensive industry. Taiwan's economic performance during the year ranked among the best in the world. In the political arena, institutional and policy changes were profound. Taiwan's external relations encountered no serious diplomatic setbacks. Relations with the United States were stable even in the face of the toughening American stand on trade issues. The twenty-three nations still holding diplomatic ties with Taipei remained faithful. In the field of non-official "substantive relations" such as trade, athletic competition, and cultural exchange, there were signs of new initiative.
