external (USA) -TW

Question 1

CW circumstances and USA’s consistent interest in it - pursuit of CW motivations

Answer 1

effect: 1953-1965 US aid contributed to GDP average 7.8% growth rate

US Economic Planning Agnecies:
- Chinese-American Joint Commission on Rural Reconstruction
- 1953-1958 Industrial Development Council (IDC)
- 1953- 1958 Economic Development Board (EDB)
- 1963-1973 Council for International Economic Cooperation and Development (CIECD)

Question 2

Korean War - military and economic aid

Answer 2

TW became a key post on the West’s defense perimeter
- received a total of US$1.48 billion in grants and loans and US$2.3 billion in military, technological and advisory assistance

Question 3

Vietnam War - military and industrial complex

Answer 3

• demands for food, textiles, repair facilities, ports, military equipment
  -> war-induced demand helped to compensate for the termination of US economic aid in the 1960s
• 1969 joint venture for production of military helicopters and later, F5-E fighter planes
• USA bought large amount of food and military equipment from TW and the island developed the best military repair facilities in Asia outside of Japan

Question 4

CA: Taiwanese Government’s role:
not idle recipients of aid, redistributed and reinvested the aid

Answer 4

• Green Revolution
• consistent growth enabled accumulation of significant surplus
  formed basis for transition to industrialization in the 1970s
• while also providing a comfortable cushion against the Oil Crises and protectionism

Question 5

GAC and Global Chain of Production
(TW’s growth coinciding with)

Answer 5

GAC:
- cheap oil
- trade liberalisation
- stable international monetary conditions

Global Chain of Production
- 1960s GPC coincided with TW’s creation of EPZ
- US and Japan’s electrical and electronic firms established themselves in TW
- low-cost for production
- low-cost educated labour
- 1964 General Instrument of the USA began production in TW
- in the next 2 years, 24 US firms rushed to make production agreements

Question 6

CA:
1. Government’s prior investments/ developments in education made TW an attractive place for US and JP

2. less impactful on economy given relative insignificance of foreign investment in TW

Answer 6

1. • turned TW into an “electronic industry centre”
   • 1965 EPZ in Kaohsiung
   • planning agency (CIECD)
     #effect: 1966-1971 exports growth 58% per year
2. • 1981, FDI only 2% of GNP
   • exports 25.6% of nationwide exports
   • no huge MNC presence in TW