First inhabited by Austronesian people, Taiwan became home to Han immigrants beginning in the late Ming Dynasty (17th century). In 1895, military defeat forced China's Qing Dynasty to cede Taiwan to Japan, which governed Taiwan for 50 years. Taiwan came under Chinese Nationalist control after World War II. In the four years leading to the communist victory on the mainland in 1949, 2 million Nationalists fled to Taiwan and established a government under the 1947 constitution drawn up for all of China. The Nationalist government established authoritarian rule under martial law in 1948. Beginning in the late 1970s, the ruling authorities gradually democratized and incorporated the local population within the governing structure. This process expanded rapidly in the 1980s, with the founding of the first opposition party (the Democratic Progressive Party or DPP) in 1986 and the lifting of martial law in 1987. Taiwan held its first direct presidential election in 1996. In 2000, Taiwan underwent its first peaceful transfer of power from the Nationalist Party (Kuomintang or KMT) to the DPP. Throughout this period, the island prospered and became one of East Asia's economic "Tigers." The dominant political issues continue to be management of sensitive relations between Taiwan and China - specifically the question of Taiwan's sovereignty - as well as domestic priorities for economic reform and growth.