As the authoritarian regime in Taiwan was transformed into a more democratic system, conflict over national identities has emerged as the most important social cleavage in party competition. Students of nationalism have pointed out that ethnicity lies at the core of modern nationalist movements and nationalist ideology. Nationalism is largely based on collective identity. It commands, in many cases, strong commitment from the members to the welfare of the group. The ideology of nationalism is often assumed as a doctrine of nationalism and liberalism not only are compatible but many also imply each other. But so far the argument is limited to the theoretical speculation.

This study, using a national survey data collected in 1992, shows that Taiwanese national identity is empirically correlated with both Taiwanese ethnic identity and liberal secessionism. Each factor independently wields significant influence on the formation of Taiwanese national identity. We found among Taiwanese nationalists a tolerance for secession within its own group. The findings suggest that both ethnic identity and democratic liberalism contribute to the formation of Taiwanese nationalism.