Taiwan’s miracle was a period in the 20th century when Taiwan’s economy experienced an unprecedented rate of growth, with the country also witnessing rapid industrialization. Taiwan’s Gross National Product recorded an explosive growth of an impressive 360% from 1965-1986. Even more impressive was the country’s global industrial production, which grew by 680% in the period 1965-1986.
The Kuomintang regime had to flee China after losing during the Chinese civil war and decided to establish an exiled parallel government in Taiwan. Fortunately for Chinese immigrants, the island already had a basic industrial and agricultural infrastructure created by the Japanese, in addition to the food and chemical reserves that the Japanese had left. After settling in Taiwan, the regime began a series of reforms, the first were the agrarian reforms that supervised the abolition of the traditional land system and the consequent increase of small farmers and the increase in agricultural production.
The government has also made the business environment flexible, allowing national companies to adapt quickly to changes in the international market, in a special brand of capitalism in which the government has completely protected the market. The Taiwanese government has also focused on importing the latest industrial technologies from foreign countries, an act that has accelerated the development of the country. The favorable business environment and the good political will of the government to support companies have triggered a mass exodus of companies and companies from mainland China that have settled in Taiwan. The corporate movement also involved Chinese business elites and intellectuals on the island.
The country had a largely uneducated and poorly educated population, also quite young, and this population offered cheap labor to national companies. Low-cost labor meant that Taiwan-based companies had low production costs, resulting in high profits. The United States also played an essential role in Taiwan’s growth during this period and sent $ 4 billion in financial aid to the island between 1945 and 1965. American assistance during this period also came in the form of military aid and food. In education, the country aimed to make its citizens speak fluently in English, Mandarin and Taiwanese. Mandarin was considered necessary because it was the official language of mainland China,
China’s recent meteoric surge to become a global economic giant mirrors Taiwan’s miracle over four decades ago, with the two sharing many features. China’s dominance in the world economic landscape is attributed to the availability of cheap labor among its population, to the good political will of a stable government and to the non-existence of trade unions, factors that were at the base of the Taiwan Miracle of the late 20th century .
China’s rise has obscured Taiwan’s economic growth, which – like many countries – cannot compete with China in labor-intensive industries due to the decline in the availability of a cheap, educated labor market in Taiwan . In response, Taiwan has shifted attention to information technology, where the country has invested heavily. As a result, Taiwan has become one of the largest IT centers in the region, with the presence of Taiwanese technology that is felt in American Silicon Valley.