After China lost the First Sino-Japanese War in 1895, Taiwan was ceded to the Japanese, beginning a half-century of Japanese colonial rule of the island. The people on Taiwan were treated as second-class citizens by their colonial rulers, and this time was one of hardship and suffering. In the early decades, thousands of people in Taiwan died heroically in numerous revolutions instigated by patriots, armed with only sticks, knives and guns against a modern Japanese army. With the ROC's victory in the War of Resistance Against Japan and Japan's formal announcement of unconditional surrender on August 14, 1945, freedom was once again restored in Taiwan. Since Japanese rule of Taiwan officially ended on October 25, 1945, the day has been designated as Taiwan's Retrocession Day in memory of this event.

When the people in Taiwan heard of this news, the nation erupted with euphoria and celebration.

After retrocession, Taiwan's economy grew at an unprecedented speed, and the people's standard of living, compared with that during the colonial period, changed enormously for the better. This remarkable transformation testifies to the benefit Taiwan enjoyed by casting off Japanese rule.

To remind the people of the days when Taiwan was subjected to foreign rule and to cherish the present accomplishments of the nation, popular memorial activities are held and the national flag is hung outside homes every year on October 25 to celebrate the important significance of this day.

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