Foreign factors in Taiwan's economic transformation

Bernard Gerbier () and Min-Hua Chiang
Additional contact information
Bernard Gerbier: LEPII - Laboratoire d'Economie de la Production et de l'Intégration Internationale - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique
Min-Hua Chiang: CDRI - Commerce Development Research Institute - Commerce Development Research Institute

Post-Print from HAL

Abstract: This paper aims to explore the foreign influences on Taiwan's economic transformation over the past 40 years. While exports have always been important in sustaining Taiwan's economic growth, the driving force behind exports has changed from inward investment to outward investment. The analysis carried out is from an international political economy perspective and takes a historical overview. It argues that the US, Japan and China pursued economic policies based on their own economic interests. These foreign governments' economic policies together with their entrepreneurs' business interests are the more important variables for shaping Taiwan's economic structure. During the 1960s, without the US's financial guarantees for American MNCs and security guarantees for the island, the KMT's foreign investment promotion policy would not have been as successful as it was when Taiwan faced a military threat from China. The US and Japanese economic policies changed, and since the 1970s competition between their businesses in the world market has integrated Taiwan into a regional production network. Subsequent to the Sino-US rapprochement, the US gradually opened up its market towards China. With America's rising trade barriers against Taiwanese-made products, Taiwanese entrepreneurs found profits by investing in China. Even though the Taiwanese Government tried hard to pull back the mounting outward investment in China, it was unable to achieve it. In contrast to the traditional point of view, this paper offers insights into the economic interaction between first the US and Japan and later between the US and China that resulted in Taiwan's economic transformation.

Keywords: foreign direct investment; economic growth; international political economy; economic policy; Taiwan; United States; Japan; China; investissement direct; investissement étranger; politique économique; croissance économique; développement économique; économie politique internationale; Etats-Unis; Japon; Chine (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Published in Journal of the Asia Pacific Economy, 2010, 15 (2), pp.148-165

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00476681

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().