This isn't quite true. The Chinese weren't present on Taiwan in any appreciable number until the Dutch established a colony. -- snip --
Also, low population density is a little misleading. While populations were rather low, the plains tribes lived in villages of up to a thousand or so and villages were often clustered with large distances between clusters of villages. The area where the Dutch settled was fairly heavily populated already by the Siraya. Later Chinese migration absorbed the plains tribes into the population.
Penghu Islands, about 35 miles off the coast, were heavily settled by Chinese in the pre Dutch period, but the island of Taiwan was not.
Here is an important point from what I read in years past, including huge the Historical Atlas of Taiwan, which seems to be in every library of the Island. Only about 2,000 Chinese (most all the "despised" Hakka, and the rest Min from Fujian) were settlers on narrow enclaves trading with the natives and maybe pirate activities but that was not mentioned as recalled. None had the least authority from the government. After the conquest of the Dutch, that rose to about 30,000 Chinese (some sources state 50,000 Chinese and 50,ooo Aborigines under nominal Dutch authority, another 100K Han Chinese), the large majority being single Min men from Fujian.
Whereas before every night heavy doors were closed and the natives poked around unopposed at night trying to find weakness, large swaths were closed to such activities after a few years of Dutch settlement. Plus for a decade or two deer was the great trade item, top dollar paid for hides by the Japanese in Nagasaki, Unfortunately for the Dutch, both a personal and internal rivalry and the fact that they did not allow Chinese ownership of the land (only a garden of 1/4 acre per family would have done it, but no, they wanted serf plantations).
Tell me, why would government money go to those atlases regularly over a 13 year period, mostly during overwhelming control by the world's richest political party (up to 100 Billion in assets), the KMT, and the other period, DDP presidency, KMT legislative, made up of the main subgroups of Chinese people, the Min and Hakka. The atlas acquisitions were steady throughout, despite a very non nationalistic message for KMT or DDP. My guess is because it was extremely well researched, academics were left to do as they pleased by that time in distant historical research. And, besides, who reads atlases? Certainly not Aboriginies, as I never saw one step foot in any of the reference library, and usually you can tell on sight who is who.
Much of the population absorption of native Taiwanese was from disease, I guess. Like so many places around the world, it hit there, too. As late as the 1870's, ship wreck sailors were attacked because they brought diseases which were known to wrack through local populations. True, this was on the distant East coast, but we are talking about an island only 90 miles wide. (Japanese, French, and others used strong arm methods towards the Manchus because of this issue, and was the supposed reason for the Japanese take over.)
Diseases are a world wide issue in Western influx around the world. I presume it happened with Chinese in their drive to Guandong, Fujian ( 200 BCE to 1000 CE) and in Taiwan.
Also of note, from all evidence China would not have become interested in Taiwan except a dying remnant Ming, plus a Pirate fleet under Koxinga which saw Taiwan having a handy rebellion going on.
Finally, I think the original inhabitants were likely to have been Negrito, totally wiped out or amalgamated without visible trace:
http://news.bbc.co.uk/2/hi/asia-pacific/6217502.stm
http://en.wikipedia.org/wiki/Saisiyat_people