The song was first composed in the 1930s on mainland China as a possible national anthem candidate after the anthem of the ruling Kuomintang was used as a temporary anthem, but it was not chosen. It did, however, start to be performed at flag raising ceremonies in China following the performance of the national anthem.
After the Communist takeover of China, and the subsequent exile of the republican government to the island of Taiwan, the use of the song at flag-raisings continued. It also started to be used in situations where the government of the People’s Republic of China forbade the performance of the Taiwanese national anthem in international settings, most notably at the Olympic Games and other sporting events where both China and Taiwan compete separately, and Taiwan usually competes under the name “Chinese Taipei”. Despite not being the national anthem, it seems to be quite popular in Taiwan, possibly because of the non-political nature of it (as the national anthem was also the party anthem of Kuomintang).
Special thanks to: Davie H. Y. Wen for the English translation and some of this information.