Taiwan Miracle
[7] The flexibility of the productive system and the industrial structure meant that Taiwanese companies had more chances to adapt themselves to the changing international situation and the global economy.
Japanese companies moved in, reaping the benefits of low salaries, the lack of environmental laws and controls, a well-educated and capable workforce, and the support of the government.
[citation needed] Access to the global markets was facilitated by the Japanese companies and by the American importers, who wanted a direct relationship with the Taiwanese brands.
Most of the development was thanks to the flexibility of family businesses which produced for foreign traders established in Taiwan and for international trade nets with the help of intermediaries.
After retreating to Taiwan, Chiang learned from his mistakes and failures in the mainland and blamed them for failing to pursue Sun Yat-sen's ideals of Tridemism and welfarism.
[citation needed] Many Taiwanese brands became important suppliers of worldwide known firms such as DEC or IBM, while others established branches in Silicon Valley and other places inside the United States and became known.
[citation needed] The government also recommended the textile and clothing industries to enhance the quality and value of their products to avoid restrictive import quotas, usually measured in volume.
Rather than prevailing upon the state to use martial law to smash the union, the management adopted the more cautious approach of buying workers' votes at election times.
In the 1980s, Taiwan had become an economic power, with a mature and diversified economy, solid presence in international markets and huge foreign exchange reserves.
[9] Its companies were able to go abroad, internationalize their production, investing massively in Asia (mainly in People's Republic of China) and in other Organisation for Economic Co-operation and Development countries, mainly in the United States.
[10] A major step occurred when Lee Teng-hui, a native from Taiwan, became President, and the KMT started a new path searching for democratic legitimacy.
[citation needed] But, by 2018 Taiwan's per capita GNP, adjusted for purchasing power parity (PPP), had soared to $53,074, around or above some developed West European economies and Japan.
[12][irrelevant citation] Dwight Perkins and others cite certain methodological flaws in Krugman and Alwyn Young's research, and suggest that much of Taiwan's growth can be attributed to increases in productivity.
These productivity boosts were achieved through land reform, structural change (urbanization and industrialization), and an economic policy of export promotion rather than import substitution.
Many infrastructure improvements are currently being pursued, such as the first rapid transit lines opening in Kaohsiung in 2008 and a doubling in size of Taipei's rapid transit system by 2013 now underway; the country's highways are very highly developed and in good maintenance and continue to be expanded, especially on the less developed and less populated east coast, and a controversial electronic toll system has recently[when?]
[18] These SMEs provide "incremental innovation" with regard to industrial manufacturing but do not, according to Dieter Ernst of the East–West Centre, a think-tank in Honolulu, surpass the "commodity trap", which stifles investment in branding and R&D projects.
[19] The Taiwanese president Tsai Ing-wen, of the Democratic Progressive Party (DPP) enacted policies building on the continued global influence of Taiwan's IT industry.
To revamp and reinvigorate Taiwan's slowing economy, her "5+2" innovative industries initiative aims to boost key sectors such as biotech, sustainable energy, national defense, smart machinery, and the "Asian Silicon Valley" project.
[20] President Tsai herself was the chairperson for TaiMed Biologics, a state-led start-up company for biopharmaceutical development with Morris Chang, the CEO of TSMC, as an external adviser.
[22] At the opening ceremony for the Asia Silicon Valley Development Agency (ASVDA) in December 2016, Vice President Chen Chien-jen emphasized the increasing importance of enhancing not only local R&D capabilities, but also appealing to foreign investment.
While China already has international free trade agreements (FTA) with numerous countries through bilateral relations and regional organizations, the "Beijing factor" has led to the deliberate isolation of Taiwan from potential FTAs.
[28] In signing the Economic Cooperation Framework Agreement (ECFA) with China on 29 June 2010 – which permitted trade liberalization and an "early harvest" list of tariff cuts[29] – former president Ma Ying-jeou wanted to not only affirm a stable economic relationship with China, but also to assuage its antagonism towards Taiwan's involvement in other FTAs.
Taiwan later signed FTAs with two founding members of the Trans-Pacific Partnership (TPP) in 2013: New Zealand (ANZTEC)[30] and Singapore (ASTEP).
The opposition contended[32] that the trade pact would hinder the competency of SMEs, which encompassed 97.73 percent of total enterprises in Taiwan in 2016.
