In the late 1970s, Taiwan's economic development entered the fast lane. For a time, it was known as "the Four Asian Tigers" together with South Korea, Hong Kong, and Singapore.
I recall that thirty years ago, this place was still desolate, with endless farmland as far as the eye could see, without any trace of industrialization or modernization.
So, from 
949 was in a mess to entering industrialized society and achieving economic take-off, what did Taiwan do right?
From a mess to the "Four Asian Little Dragons"
At the beginning of 1949, the Kuomintang army suffered another defeat in the Battle of Huaihai, and Chiang Kai-shek, who was losing hope, had to think about his future retreat.
At that time, the Kuomintang's retreat routes included Taiwan Island , Hainan Island , and the Sichuan and Chongqing areas. After careful consideration, Chiang Kai-shek decided to cross the Taiwan Strait eastward, forming a confrontation with the Communist Party on the treasure island of Taiwan, with a view to returning to the mainland in the future.
There are many advantages to choosing to retreat to Taiwan:
The People's Liberation Army does not have a naval force and cannot pursue it in a short time;
The Communist Party has few underground members active in Taiwan, which facilitates the rule of the Kuomintang government.
However, Taiwan also has many disadvantages, especially the serious economic lag.
Since ancient times, Taiwan has been a region with agriculture as its leading industry . The small-scale farmer economy has fed the vast majority of Taiwanese people.
But once this fragile economic model encounters natural or man-made disasters, it will immediately face a devastating blow.
(The Kuomintang retreated to Taiwan)
Unfortunately, since the Sino-Japanese War , the island of Taiwan has been devastated by war and plundered by colonists.
Under the baptism of war, Taiwan's agricultural development suffered irreversible losses, and agricultural production was severely damaged.
Before the war, Taiwan's annual rice production could reach 1.4 million tons.
However, when the Kuomintang government arrived in Taiwan, production had dropped sharply to html more than 3.8 million tons.
Such grain output cannot satisfy the basic rations of the Taiwanese people, let alone economic development.
After the arrival of the Kuomintang army, the original population of Taiwan island of 6 million surged to 8.12 million.
The demand for material life brought by the increase in population has also increased, which is obviously unable to be met by Taiwan's production. Many people once fell into a state of extreme poverty.
After the Kuomintang government arrived in Taiwan, Chiang Kai-shek was busy consolidating the political status of the Chiang family and had no time to take into account Taiwan's economic production.
Not only that, political turmoil has even further affected Taiwan's economic development.
Due to inflation , prices in Taiwan remain high , and the consumer price index of ordinary people has increased by more than 50 times.
However, under this unfavorable situation, Taiwan has risen from ruins to become one of the most developed economies in Asia in just 20 to 30 years. , together with Singapore, South Korea, and Hong Kong, is also known as the "Four Asian Tigers".
(Chiang Kai-shek in Taiwan)
Perhaps the comparison in data can better highlight the earth-shaking changes in Taiwan in the past few decades.
In the 1950s, Taiwan's GDP was only 1.2 billion. In 2003, this number soared to 95.6 billion.
Over the past fifty years, Taiwan's average annual economic growth rate has reached an astonishing 8.1%.
In terms of people's livelihood, the per capita disposable income of Taiwanese people has jumped from ,150 in the 0s to 14,908 in in the 12000s.
Inflation and price fluctuations have long been eradicated. With the rise of metropolitan cities and the construction of industrial zones, Taiwan has gradually entered an industrialized society.
Compared with when the Chiang Kai-shek government first arrived, Taiwan has undergone a transformation like a rebirth.
So, what has Taiwan done right in its pursuit of economic development?
Original economic foundation
First of all, The reason why Taiwan can achieve economic take-off is inseparable from its original social production foundation.
After the Qing government was defeated in the Sino-Japanese War of Sino-Japanese War, it ceded Taiwan to the Japanese pirates.
In the next fifty years, Taiwan has been trampled under the iron heel of Japanese imperialism. However, due to war and production needs, the Japanese still brought the capitalist mode of production to Taiwan.
Especially during the period of 's full-scale invasion of China, the Japanese used Taiwan Island as a springboard to invade mainland China, and built industrial, electric power, transportation and other facilities in Taiwan wantonly.
Although the Japanese had impure motives at the beginning, judging from the actual results, Japanese construction and investment did become the industrial foundation for Taiwan's rapid development.
When the Kuomintang regained Taiwan from the Japanese, they took over 75 large-scale enterprises.
These enterprises were somewhat damaged by the war, but the capitalist production relationship that has been formed is unbreakable.
Most of the more than 700 enterprises were publicly owned, and they later became an important part of Taiwan's national economy.
In addition, Chiang Kai-shek took a large amount of funds and valuables with him when he evacuated from the mainland. This was an important source for the Chiang regime to take root in Taiwan.
As early as November 1948, Weng Wenhao, the president of the Kuomintang Executive Yuan, was ordered by Chiang Kai-shek to transport 500 boxes of cultural relics from the Palace Museum to Taiwan.
At the same time, all the important cultural relics, materials, and books of the Academia Sinica, Central Museum, and Central Library were moved to the warship bound for Taiwan.
According to statistics, a total of 1,424 boxes of jade, calligraphy and painting, porcelain, and 204 boxes of historical documents, a total of .23 million valuable cultural relics were transported to Taiwan. These treasures have become the treasures of the National Palace Museum in Taipei today.
Industrial facilities and talents, these important resources related to future development, were also brought to Taiwan by Chiang Kai-shek.
In the first few months after Shanghai was liberated, 1,500 ships were filled with machinery, equipment and supplies shipped from here.
Of course, what Chiang Kai-shek took away the most from the mainland was gold and silver.
On January 10, 1949, Chiang Ching-kuo followed his father's order to find Yu Hongjun, president of the Central Bank , and asked him to immediately transport all gold, silver, and U.S. dollar bills in stock to Taiwan.
At that time, the National Government's gold inventory was about .8 million taels, US dollars foreign exchange reserves exceeded 70 million, plus silver, precious metals , and other countries' foreign exchange, a total of 500 million US dollars.
The Kong and Song families, who were in charge of the national economy, transported part of the National Government's funds to Taiwan and the other part to Citibank in the United States.
Among the 100 largest companies in Taiwan today, they basically relied on funds brought from the mainland.
Therefore, when the Kuomintang retreated to Taiwan, although it faced a barren landscape, already had an economic foundation for rapid development.
Of course, being able to grow into the Four Asian Tigers in just 20 to 30 years is inseparable from the support of the external environment and the correct strategic decisions of the Taiwan authorities.
(Chiang Kai-shek, Chiang Ching-kuo)
The result of internal and external efforts
External factors, 0s The third scientific and technological revolution brought a golden period of development to the economic development of Western developed countries, and Taiwan's capitalist economic system also benefited from this.
The rise of emerging industrial sectors urgently requires a large number of skilled, knowledgeable and skilled complex labor forces. The proportion of white-collar workers in the employed population in developed countries has increased while blue-collar workers have decreased.
As a result, workers' wage levels will also increase accordingly. Wage costs will cause production costs to increase significantly, and the competitiveness of labor-intensive industries in developed countries will be weakened.
Under such circumstances, developed countries had to adjust their industrial structures. A large number of labor-intensive and energy-consuming industries were transferred to areas with average economic development. Taiwan is one of the industrial transfer areas in Western countries.
These companies have created a large number of jobs for the Taiwanese people and are an important factor in Taiwan's economic recovery .
Of course, aid from the United States is also a major boost to Taiwan's prosperity.
1951-1965In more than ten years, the United States sent US$1.482 billion to Taiwan.
The greatest help this money can bring to Taiwan's economy is to ease the fiscal deficit, curb inflation, and help Taiwan get out of its initial predicament.
At the same time, the United States and other Western countries support Taiwan in the form of military assistance, low-interest loans, industrial investment, etc.
According to statistics, in the 30 years after Chiang Kai-shek fled Taiwan, the total value of various aids from the Western world exceeded 20 billion .
In addition, the Korean War and Vietnam War in the 1950s and 1960s also brought new development opportunities to Taiwan.
A large number of military trade orders from the United States have drifted to Taiwan like snowflakes. This has greatly stimulated Taiwan's manufacturing industry, and its annual export growth rate of industrial products has soared to an astonishing 34%.
In terms of internal conditions, Taiwan has first chosen the correct order of economic development.
Under the advice of a large number of Taiwanese economists, the Taiwan authorities did not give priority to the development of the much-needed industrial economy. Instead, they chose the strategy of seeking stability during development, that is, the order of agriculture - light industry - heavy industry .
In the 1950s, Taiwan carried out land reform.
With the support of the "release of public land", "375 rent reduction", and "land to the tiller" policies, Taiwanese farmers have obtained land, and their enthusiasm for work has been greatly improved.
In the ten years from 1950 to 1960, Taiwan's agricultural output value increased year by year at a rate of , and rice output reached above 2 million tons per year.
The recovery of agriculture provided guarantee and funds for the development of light industry. Since the 1960s, light industry has become the focus of Taiwan's economic development.
Traditional industries such as textiles, food, and plastics have been further expanded, and emerging consumer goods industries such as electronics and electrical appliances have also taken shape. Taiwan's light industry has ushered in its heyday, with an annual output value growth rate of 18.5%.
The development of Taiwan's heavy industry occurred in the 1970s and 1980s. During this period, Taiwan had accumulated sufficient capital and technology.
Based on the current international economic environment, Taiwan has formulated a "Six-Year Economic Construction Plan."
In the following years, Taiwan established a capital-intensive and technology-intensive industrial cluster, and also began to get involved in the energy, metal, advanced precision machinery, and electronic industries.
By the late 1970s, heavy industry accounted for 40% of Taiwan's economy.
Timely reforms based on development strategies at different times are another major internal factor in Taiwan's economic recovery.
Parallel to the land reform in the early 1950s was the currency reform . At that time, in order to suppress inflation and stabilize prices, the Taiwan authorities began to implement a high-interest deposit policy, strengthen foreign exchange management, and establish currency credibility.
From the perspective of results, monetary policy has indeed achieved good expectations.
The second economic reform occurred in the 1950s and 1960s. Taiwan began to emphasize the role of market mechanisms and attempted to achieve foreign exchange trade reform through partial opening up and liberalization.
In 1958, Taiwan's original multiple-entry exchange rate was changed to a fixed unified exchange rate. The price of the Taiwan dollar gradually became stable and reasonable. This reform laid a good monetary foundation for Taiwan's subsequent import and export trade.
In addition, 's strategy of integrating Taiwan's domestic economy with the international market, and are the key to breaking Taiwan's economic shackles.
Taiwan's resources are scarce, its market is small, and there are many natural barriers to economic development. If it only relies on its own strength to develop, it will not last long.
The Taiwan authorities also realized this early, so starting from 964, the Kuomintang government put forward the "export expansion" economic development strategy.
attempts to take advantage of convenient shipping and cheap labor, introduce advanced foreign capital and technology, develop labor-intensive processing industries in Taiwan, rely on foreign investment, foreign trade, import and export, and drive the cyclic development of the entire economy.
This move directly solved the biggest dilemma facing Taiwan's development and raised its economic ceiling.
Of course, Taiwan's economy has inevitably encountered some problems in the past 20 to 30 years since its economic rise. Proper handling of these problems is what keeps its economy prosperous.
Seeking a way out of the dilemma
Taiwan's relatively poor economic development environment and export-oriented economic model are destined to have a fatal flaw in its development, that is, is very dependent on the international market, whether it is raw materials, technology, or products, and markets.
48% of Taiwan's products eventually flow to the United States. The result is that the economy is severely restricted by the United States.
There is a very apt description of this in the business community: "As long as the U.S. market sneezes, Taiwan will catch a cold."
At the same time, the rise of international trade protectionism has also brought new obstacles to Taiwan's economic development.
htmlThe two energy crises in the 1970s threatened the stable economic structure of Western countries. In order to get out of the predicament and pass on the crisis as soon as possible, some countries began to strengthen their own trade protection.During this period, the United States frequently used anti-dumping laws, offset tariff laws, import restrictions and other methods to protect its own market. Taiwan's export-oriented economy was inevitably hit.
In addition, as developing countries play an increasingly prominent role in the division of labor in international trade, Taiwan's cheap labor advantage is gradually lost, which also puts forward further requirements for its industrial structure.
In order to solve its economic difficulties, Taiwan has been trying solutions.
In response to the over-reliance on the US market, Taiwan began to expand its key trade areas to Europe and Japan, and at the same time strengthened economic and trade cooperation with countries in Asia and Eastern Europe.
Especially in areas close to Southeast Asia, Taiwan's financial department has allocated a large amount of funds to provide preferential credit to overseas Chinese businessmen who deal in Taiwanese products.
As for the difficulties in industrial structure, Taiwan is also actively promoting industrial upgrading.
After the labor force advantage gradually lost, Taiwan transferred labor-intensive industries to developing countries, itself turned to the development of technology and knowledge-intensive industries .
In 1982, Taiwan's "Strategic Industrial Development Executive Committee" was established, which identified electronics, machinery, and information as the three strategic industrial development directions, and selected more than 170 promising industrial products.
Furthermore, Taiwan continues to expand exports and stimulate investment.
In order to survive in the relatively weak international economic environment and solve the problem of low investment intention of investors in the region, the Taiwan authorities continue to increase infrastructure investment , drive private capital investment willingness, and reduce investment profit income tax by 10%.
This move reduced the willingness of Taiwanese people to save and eased inflationary pressure.
In addition, investment by foreigners and overseas Chinese in Taiwan has been further relaxed, and the scope of investment continues to be liberalized.
It is not easy to go from desolation to wealth, but it seems even more difficult to maintain the economy at a high level.
The reason why Taiwan has been able to rank among the Four Asian Tigers for a long time is inseparable from its continuous search for a way out and solutions to its difficulties.
Conclusion
Taiwan's economic rise is the result of the combined efforts of many factors, including the efforts of the Taiwanese people and assistance from the outside world.
Of course, Taiwan’s development is also inseparable from support from the mainland.
In fact, since the reform and opening up of to , the economic exchanges between the two sides of the Taiwan Strait have become increasingly close, and the mainland has become an important market for Taiwan.
From 981 to 2021, cross-strait trade volume increased 713 times.
For the development of Taiwan, the mainland has promulgated a series of policies to benefit Taiwan, which has benefited people and businesses on both sides of the Taiwan Strait.
Editor: severn
Editor: Wang
