Taiwan is mostly controlled by a single political party KMT which until recently was dominated by a group of aging leaders who, inescaped to the then 6 million-peopled island with its leader Chiang Kai Shek and 2 million troops and refugees retreating from the communist revolutionary Mao Tse Tung. The island escaped communism and its people survived under the U. The philosophy of the KMT is that sooner or later Taiwan will be reunited with the mainland. In its official view, since the KMT is the legitimate government of China its duly elected leaders under a democratic constitutional government having been driven out by communist rebelsit will eventually extend its powers over all of China.
Like most pro-KMT claims, only the looting part is true. Our tale begins with a post at Forumosa by Feiren responding to one of these claims. According to the memoirs of Zhou Hongtao, an aide to Chiang Kai-shek who served in the presidential office and was from Fenghua, about 3.
Much of this was spent on supporting ,strong Nationalist Army, which costtaels a month to feed.
Most serious historical accounts of the period say the basically the same thing. One tael is That would have been about 4.
Interestingly, in its asset report, the KMT put gold reserves brought from China as 2. That gold of course belonged to the national government not the KMT. I then followed up: To help industry after losing the war, the Nationalists followed an easy money policy.
The money supply doubled and inflation boomed. At that point the military budget accounted for 90 percent of government expenditure. To compound the problem, the brilliant Nationalists decided it would be a brilliant idea to make short-term deposits redeemable in gold.
Given a choice between holding worthless Nationalist scrip or actual gold, what would you do? Even the KMT finally saw the unwisdom of this policy and it was halted in Dec of How did the government halt inflation?
But the real thing that stopped it and stabilized the currency was the resumption of US aid, which Ho refers to as "the main reason inflation was kept under control" and "the prime stabilizer of the economy.
As I recall from my poor memory, US agricultural products were brought in under the PL laws and then sold, and the accumulated funds deposited in the national treasury, stabilizing the currency.
Not sure about the exact process. Ho also says that a major source of destabilization was the military budget, which US aid officials attempted repeatedly to get the KMT to reduce. In brief, the KMT totally neglected the domestic economy to fund their military state, leaving US aid to make productive investments in infrastructure that made the private economy go.
What actually happened was that the KMT government budget went almost entirely to the military -- the development money was provided by US aid. Not merely money, in-kind aid of food, fertilizers, equipment, raw materials and other items kept Taiwan from starving and kept its industries going.
Not only was military budget enormous but its demand drove nasty and unpredictable inflation. Taiwan also had an import surplus until late in the s -- a surplus that did not include military imports, and a surplus financed by US aid.
Finally, a key effect of US aid was the creation of a Taiwanese capitalist class. As Ho notes p Instead, the KMT confronted a US aid program strongly committed to private sector development, and strongly committed to the development of a Taiwanese entrepreneurial class.
Because US aid went primarily to investments in infrastructure and human resources, it facilitated the growth of private industry.
There was one other positive effect of US aid. Throughout the s and s AID brought intense pressure to bear upon the Nationalist government to exercise fiscal restraint and hold down its military spending. Despite these pressures the [KMT] government adhered to its preference for the military and continued to enlarge its military budget.
But had AID not exerted pressure, the size of the military budge conceivably could have increased at a still more rapid rate. The recovery and early stages of the export boom were a US project.
Not until much later would KMT policy become more development oriented.of Taiwanese investment to China for a host of the island’s economic ills, including rising inequality.
“The Taiwanese firms that invest in China are often not expanding into China, but leaving Taiwan and relocating completely,” said David Hong, president of the Taiwan Institute of Economic Research.
Chinese Taipei and Thailand Embrace the O2O business model and Ride the Wave of E-commerce. On June 6, the Small and Medium Enterprise Administration (SMEA), Ministry of Economic Affair (MOEA) of Chinese Taipei and the Office of SMEs Promotion of Thailand co-hosted the APEC SME O2O (online-to-offline) Forum in Bangkok.
Taiwan's development model was a combination of an orwellian state and effective ways of industrializing. Taken as a whole the repressiveness of the Taiwanese model makes it undesirable for government to adopt; but other aspects of Taiwan's industrial policy could prove effective for countries outside of the pacific rim.
Taiwan economic development is a fusion of Dechnology (Design-Technology) and Humart (Humanity-Art) which could be represented as a smile curve, from OEM (Original Equipment Manufacture), ODM.
is and in to a was not you i of it the be he his but for are this that by on at they with which she or from had we will have an what been one if would who has her. Writing Taiwanese: The Development of Modern Written Taiwanese by Alvin Lin Victor H.
Mair, Editor To view a copy of this license, visit Taiwanese romanization in this paper follows the church romanization and.