There has been a struggle between the two Chinese entities since the end of the Chinese Civil War in 1949, when the Communist Party of China defeated the Republic of China, which was led by the Kuomintang (KMT, Chinese Nationalist Party). This led to the establishment of the PRC, which has since been based on "Mainland China". It excludes the area controlled by the retreating Kuomintang, as well as the then colonies of Hong Kong and Macau. Since the return of Hong Kong and Macau to Chinese sovereignty in 1997 and 1999 respectively, "Mainland China" generally continues to exclude these territories, because of the "One country, two systems" policy adopted by the PRC central government towards the SARs. The term is also used in economic indicators, such as the IMD Competitiveness Report.
source: http://en.wikipedia.org/wiki/Mainland_China
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