Business and Economic Strategies in Taiwan, from 1970s to Present
Taiwan has grown over the last half century from a poverty stricken nation to an economically-stable country and this has seriously caught the attention of some developed western countries. The country has had one of the largest populations lavishing in poverty over the years but through hard work from its people as well as the government’s commitment, its economy boasts as one of the fastest growing not only in Asia, but also globally. To achieve this economic and business growth, Taiwan has concentrated mostly in two sectors: agriculture and industrial growth. It’s therefore important to evaluate the strategies adopted by this country to achieve this economic stability and shift from a poverty stricken nation to a modern and growing economy.
Economic strategies
The strategies adopted by the Taiwan government that contributed significantly to its growth include available labor, resources and creation of a conducive environment for investment.
Changing the industries from light to heavy
The light industries mostly concentrate on the production of goods for the day-to-day use while the heavy industries concentrate on the production of exports and long-term products that are beneficial to the economy (Booth 29). After the privatization of some government-run industries, the private sector embarked on developing the heavy chemical industries by slowly increasing the funding offered to them while reducing the money allocated for the light machinery. This resulted into increased funding to education institutions to encourage for innovation and originality in production (Yusuf and Nabeshima 99).
Opened doors for investment
Only the self-sufficient and self...
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...adopted to maintain stability and social ethics for observing law and order (Ash and Greene 61). Through the legislative governance, the investors became free to invest as restrictions for trade were eliminated and this catapulted the revenues in foreign exchange to match that of developed countries. Although it encountered some problems during its transition, the investment opportunities it bore helped project the economic growth to its current position of among the fastest growing economy (Chakrabarti 71).
In conclusion, the success of this country was influenced by the external environment as well as the domestic stability. The international communities created options for free trade and it’s these options that helped in Taiwan’s economic growth. The domestic influences include social stability and harmony, education for all, hard work and, stable government.
Deng Xiaoping felt that the quickest way to build a better China was to improve living conditions immediately, to give people the level of morale they need for further development. At that time, he realized that China’s economic need to reform; he found very effective ways to reform the China’s economic. His goals were to open up the China’s market to the outside world, breaking down the collective farms, getting rid of state-run enterprises and providing more jobs for people in the industry. He found that the most important thing was the modernization of agriculture because 80% of the population derived their living primarily from agricultural production. The new contract responsibility system allowed farmers to rent land for individual farming families. Farmers had to sell a certain percentage of their crops to the State with the State’s price, and they could sell the remaining for their own profits. This system had helped the rural income to be doubled (Benson, 47). It marked a successful modernization of agricultural.
A major factor that advantaged the early growth was free enterprise. This system allowed individuals and private firms to own the means of production including land, machinery, and the work place. The people were able to decide how they can make a profit and determine business pra...
In States vs. Markets, Herman Schwartz presents two economic development strategies that have been employed by late industrial developers in order to either take advantage of existing comparative advantages or facilitate rapid industrial growth through state intervention and provision in order to gain a competitive foothold in world markets. Schwartz demonstrates how China was able to employ elements of these development strategies to generate capital from an abundant rural labour supply in order to pursue industrial development and attract foreign investment through economic reform starting in the late 1970's.
Kuo, Wen H. "Democratization And The Political Economy Of Taiwan." International Journal Of Politics, Culture & Society 11.1 (1997): 5-24.Web. 09 Feb. 2014.
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