The Taipei 101 building, the tallest building in Asia. PHOTO BY JOAN LEBOLD COHEN.

The “Taiwan economic miracle” is the island’s rapid economic growth of the last forty years. Most scholars credited the surge to implementing neoliberal principles of a free-market economy.

Since 1962 the economic growth of Taiwan has been impressive. In 1962 Taiwan had a per capita gross national product (GNP) of just $170, placing the island’s economy between those of Zaire and Congo. By 2002 Taiwan’s per capita GNP, adjusted for purchasing power parity, had soared to $22,760, contributing to a human development index similar to that of the wealthy Asian nations of South Korea and Singapore. Business and scholarly communities recognize this economic achievement, with Taiwan often being touted as the prime example of growth with equity. In both Taiwan and abroad this rapid economic growth was called the “Taiwan economic miracle” and in Taiwan was usually associated with the ruling Chinese Nationalist Party (Kuomintang, KMT) and its adherents.

Most economic scholars attributed Taiwan’s economic growth to the implementation of neoliberal free-market economic principles. Others emphasized the role of KMT policy as leading to a developmentalist state. Still others argued that Taiwan’s economic miracle was the result of a Chinese Confucian culture that stresses family values, education, and an industrious work ethic. In all of its variations the Taiwan economic miracle justified KMT rule of Taiwan through depiction of the island as the embodiment of bureaucratic efficiency, capitalist productivity, and Chinese tradition. The ideology of the miracle linked capitalistic development with nationalist sentiment, making opposition to capitalism seem unpatriotic and non-Chinese.

But after martial law was lifted in 1987 both Taiwanese and Western scholars questioned the ideology of the Taiwan economic miracle. Some scholars noted that Taiwan’s phenomenal economic growth actually had begun under Japanese occupation of the island. Some pointed out the influence of U.S. aid on Taiwan, which contributed greatly to Taiwan’s gross domestic product during the Cold War of the 1950s and 1960s and opened up the U.S. market to Taiwanese products. These historical arguments were usually identified in Taiwan with the DPP (Democratic Progressive Party).

Some scholars looked beyond the miracle at problems such as the evolution of economic classes, ethnic divisions in Taiwanese society, and the environmental destruction wrought by rapid industrialization. Within Taiwan the feminist and labor movements most vocally criticized the nationalist implications of the ideology. After all, if people believe that hard work is a Taiwanese national characteristic and a reason for the economic miracle, for example, it is difficult for unions to advocate a forty-hour work week. Therefore the ideology has had largely a conservative influence on society, creating greater adherence to the KMT and inhibiting the growth of progressive political movements in Taiwan. In the 2008 presidential elections KMT candidate Ma Ying-jeou capitalized on this theme, promising a return to rapid economic growth if the KMT were reelected. He won in a historic landslide vote. In 2008, however, a global financial crisis led to economic slowdown and a drop in the Taipei stock market, disappointing some of Ma’s supporters and leading others to place hope in closer relations with the People’s Republic of China.

Further Reading

Fei, John C. H., Ranis, G., & Kuo, Shirley W. Y. (1979). Growth with equity: The Taiwan case. New York: Oxford University Press.

Galenson, W. (1979). Economic growth and structural change in Taiwan: The postwar experience of the Republic of China. Ithaca, NY: Cornell University Press.

Gold, T. (1986). State and society in the Taiwan miracle. Armonk, NY: M. E. Sharpe.

Simon, D. F., & Kau, M. Y. M. (1992). Taiwan: Beyond the economic miracle. Armonk, NY: M. E. Sharpe.

Wade, R. (1990). Governing the market: Economic theory and the role of government in East Asian industrialization. Princeton, NJ: Princeton University Press.

Source: Simon, Scott. (2009). Taiwan Economic Miracle. In Linsun Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 2170–2171. Great Barrington, MA: Berkshire Publishing.

A fast-paced, Westernized way of life has been one result of the Taiwan Economic Miracle. But in the changing global economic situation, closer ties to mainland China have become much more appealing to Taiwanese voters. PHOTO BY JOAN LEBOLD COHEN.

Taiwan Economic Miracle (Táiw?n j?ngjì qíjì ??????)|Táiw?n j?ngjì qíjì ?????? (Taiwan Economic Miracle)

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