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Politically, Taiwan is still seen by many as military dictatorship, tainted by the imposition of a one-party state by the Kuomintang, which lost out to the Communists in China in 1949. Although Taiwan is a booming industrial state of 20 million people with the highest foreign exchange reserves in the world, its politics tend to be dismissed as peripheral to the study of modern China. However, Taiwan's immense economic strength is now being chanelled into the People's Republic via investments in the special economic zones of Guangdong and Fujien. It has also been transformed in the early 1990s from a military dictatorship into a state with an increasingly democratic orientation - a process which challenges assumptions about the incompatibility of Chinese culture and liberal democracy.