China's political system was based on hereditary monarchies, known as dynasties, beginning with the semi-mythological Xia of the Yellow River basin (approx. 2000 BC) and ending with the fall of the Qing Dynasty in 1911. Since 221 BC, when the Qin Dynasty first conquered several states to form a Chinese empire, the country has expanded, fractured and been reformed numerous times. The Republic of China, founded in 1911 after the overthrow of the Qing dynasty, ruled the Chinese mainland until 1949. In 1945, the ROC acquired Taiwan from Japan following World War II.
In the 1946–1949 phase of the Chinese Civil War, the Chinese Communist Party defeated the nationalist Kuomintang in mainland China and established the People's Republic of China in Beijing on 1 October 1949. The Kuomintang relocated the ROC government to Taiwan, establishing its capital in Taipei. The ROC's jurisdiction is now limited to Taiwan and several outlying islands, including Penghu, Kinmen and Matsu. Since 1949, the People's Republic of China and the Republic of China (now widely known as "Taiwan") have remained in dispute over the sovereignty of China and the political status of Taiwan, mutually claiming each other's territory and competing for international diplomatic recognition. In 1971, the PRC gained admission to the United Nations and took the Chinese seat as a permanent member of the U.N. Security Council. China is also a member of numerous formal and informal multilateral organizations, including the WTO, APEC, BRICS, the Shanghai Cooperation Organisation, the BCIM and the G-20. As of August 2012, all but 23 countries have recognized the PRC as the sole legitimate government of China.
Since the introduction of economic reforms in 1978, China has become the world's fastest-growing major economy. As of 2012, it is the world's second-largest economy, after the United States, by both nominal GDP and purchasing power parity (PPP), and is also the world's largest exporter and