Taiwan miracle

Taiwan’s quick development from an agricultural economy to an electronics and te

chnology exporting country is truly a ‘miracle’ in the history of economic devel
opment. It can truly be called an economy which rose from rags to riches. It is
genuinely one of the ‘Four Asian Tigers’ alongside Singapore, South Korea and Ho
ng Kong.
Taiwan has a self- propelled capitalistic economy which is loosening its arms of
government control in the guidance of private investment and foreign trade. Exp
orts have provided the primary impetus for industrialization. The trade surplus
is significant and the foreign reserves are the world’s third largest. The total
value of trade increased more than fivefold in the 1960’s. In the first half of
this decade, exports grew 60%. Exports composition changed from predominantly a
griculture commodities to industrial goods. The export composition of industrial
goods is as high as 98% in the present scenario. This meliorating condition can
not only be attributed to the efforts of the domestic governments but also to U
SA which invested lump sum in Taiwan for this development. Today, the major expo
rting industries are electronics, optical and precision instruments, information
and communications products, textile products, basic metals, plastic and rubber
products. The major export markets include China and Hong Kong. The major impor
ts are electronics, optical and precision instruments, information and communica
tions products, machinery and electrical products, chemicals, basic metals, tran
sport equipment, crude oil, etc. The major importing partners are Japan, China a
nd Hong Kong. Exports generate 70% of Taiwan’s GDP growth.
However, this heavy dependency on foreign trade has made the economy today vulne
rable to downturns in world demand. It is few of those countries which are effec
tuated by the economic fluctuations very easily. Moreover, Taiwan’ s birth rate
of only one child per women is among the lowest in the world, raising the prospe
ct of future labour shortages and declining tax revenues. This, therefore poses
a great threat to the future of the great ‘Taiwan Miracle’.