Taiwan Growth and Changing Economic Activity

History 1683 invaded by Chinese troops. Governed as part of China. 1895 seized by Japanese and ruled as a colony. 1945 Taiwan handed back to China. 1949 Communists take over mainland China. Defeated government forces retreat to Taiwan. 1950 Outbreak of Korean war. Protection of Taiwan from USA. US aid helped it to economic independence. 1979 USA established full diplomatic relations with mainland China and severed relations with Taiwan.

Taiwan had one of the fastest rates of economic growth in the world 1960-1990 GDP annual average growth rate = 9.1%

US aid , especially during the 1950s and 1960s, which was aimed at establishing Taiwan as a successful capitalist alternative to mainland China’s communism. Cheap wages : in 1965 Taiwanese factory workers received a tenth, on average, of equivalent Japanese wages. A strong government which under martial law ruthlessly crushed opposition and prevented trade unions from taking strike action. Since the late 1980s a growth in entrepreneurial activity with many local companies flourishing, especially in microelectronics. Reasons for economic growth

Stages of economic development

Following 1949 the government reformed the agricultural system, reducing the power of landlords and improving the food supply. Generous compensation to the landlords encouraged them to invest in industrial development. At first the emphasis was on textiles , bicycles and light electronics for the growing domestic market (import substitution) and for export.

Following 1949 the government reformed the agricultural system, reducing the power of landlords and improving the food supply.

Generous compensation to the landlords encouraged them to invest in industrial development.

At first the emphasis was on textiles , bicycles and light electronics for the growing domestic market (import substitution) and for export.

Rice fields surround a rural factory. As agriculture went into long-term decline in the late 1950s and early 1960s, thousands of farming families opened small factories, creating the economic miracle.

2. During the late 1960s and into the 1970s heavy industries such as steel , shipbuilding and petrochemicals were established.

3. Consumer electrical products became increasingly important during the 1970s , notably radios and televisions. 4. The emphasis changed again to high technology electronics during the 1980s , including PCs , compact disc players, video recorders & microelectronics.

Acer Products

Taiwan’s economy is now highly diversified and the role of the tertiary and quaternary sectors within the economy has increased rapidly . Taiwan no longer has the comparative advantage of cheap labour and must now depend upon the continuous improvement of its technology and skills.

Hsinchu Science Park was established in 1980

Hsinchu Science Park A total of 370 high-tech companies, mainly involved in the semiconductor , computer , telecommunication , and optoelectronics industries , have been established in the park by the end of December 2003. Hsinchu Science Park is now one of the world's most significant areas for semiconductor manufacturing . It is home to the world's top two semiconductor foundries , Taiwan Semiconductor Manufacturing Company ( TSMC ) and United Microelectronics Corporation ( UMC ). Solid crystalline materials whose electrical conductivities are intermediate between that of conductors and insulators, and which are usually strongly temperature-dependent.