Rise of Asian tigers (Taiwan) Flashcards
GOVT- govt agency to promote T products overseas
The Taiwan External Trade Development Council (TAITRA) was founded in 1970 as Taiwan’s central trade promotion agency. This helped Taiwanese businesses and manufacturers reinforce international competitiveness through services such as trade, technical and managerial consultations and international trade shows and exhibitions to promote Taiwanese exports in foreign markets.
GOVT- What taiwan did to improve export oriented growth- Council
Taiwan started the Council for Economic Planning and Development (CEPD) in 1977, which aimed to establish a coherent system of economic planning and effectively initiate the later economic transformations to greater export-expansion and also the shift from labour intensive industries to skills-based ones like the high-tech or electronics industries to adapt to the changes in the global economy.
GOVT- What taiwan did to improve export-oriented growth- EPZ
Establishment of Export processing zones: not only increase industrial development and create jobs but to increase exports and bring in new technologies as well.
By 1978, the three EPZs had attracted $240.9 million, exceeding the original target of $55.5 million by over four times. By 1986, cumulative investment had reached $459 million, over twenty time the initial expectation in 1966.
Total exports from EPZ-based firms in 1966-1978 were $3.7 billion, and averaged about 9-10 percent of Taiwan’s exports for any given year.
GOVT- What taiwan did to improve export-oriented growth-1960 policies
E.g. The 1960 statute for Encouragement of Investment (SEI) was enacted for the purpose of encouraging investment and accelerating economic development. Consisted of deregulation of taxes, tax exemptions, incentives for exports.
E.g. 1960, Taiwan introduced 19- point programme. The programme was aimed at encouraging saving and investment, to reduce expenditures and to promote exports. The programme also aimed at liberalizing and restoring market mechanisms.
E.g. Exports accounted for less than 20% of Taiwan’s GDP in 1960 and this figure grew to about 60% in 1990 due to export-expansion.
GOVT- How govt supported private businesses- R&D- ITRI
Establishment of Institute Technology Research Institute that aimed to develop new industrial technology and upgrade industrial techniques in the private sector. This allowed R&D to be shared and distributed to the whole industry for SMEs to tap on and develop upon → Research provided new technologies that could be turned into products for exports.
1976, ITRI conducted semiconductor research and led to the establishment of United Microelectronics, and with its high quality goods, allowed it to become highly favoured and is one of the world’s leading makers of integrated circuits today.
Private businesses- SMEs small
In the late 1980s, firms with 30 or less employees accounted for over 90% of the 90,000 locally-owned manufacturing companies and employed 80% of the industrial workforce
Private businesses- SMEs incubator effect
Taiwan built science-based industrial parks to encourage cooperation between scientists and manufacturers. The most famous of these is the Hsinchu Industrial Park which consisted of more than 400 high-tech companies in industries ranging from telecommunications to optoelectronics. The Hsinchu Science-based Industrial Park was home to the worlds’s top two semiconductor factories, Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC), both of which established at the nearby Industrial Technology Research Institute (IRTI). The government hoped that with so many technology outfits in one place, managers and engineers would learn from one another, much like what happened in Silicon Valley. This allowed T to sustain high rates of export-led growth
Intl developments- US diffusion of tech and expertise
K.T.Li and K.Y.Yin both brought American companies into Taiwan to act as exemplars and models for the development of the industrial sector and the consumer electronics industry, leading to a diffusion of expertise and technology to Taiwan. One of the first few American companies to come into Taiwan was General Instrument. They came to Taiwan in 1964.
Intl developments- US aid
US aid to Taiwan totalled more than four billion US dollars
Of the US$100m in non-military aid that Taiwan received every year between 1951 and 1965, about two-thirds was spent on the development of infrastructure projects and human resources
US economic aid constituted about 40% of capital formation in Taiwan
Intl develppments- US allow T protectionism
The US absorbed as much as 40% of Taiwanese exports in the 1980s
Trade surpluses with the US above $10 billion from 1985-87
