A symposium was held in Taipei on Aug. 9 to evaluate the country's economic policy and development during the reign of the late president Chiang Ching-kuo (蔣經國). It made people nostalgic about Taiwan's 16 years of strong economic performance between Chiang's takeover of the Executive Yuan in 1972 and his death in 1988.
It was a remarkably successful period in terms of common economic indicators -- economic growth rate, unemployment rate, income distribution, commodity prices and others. However, the remarkable success of this period should perhaps not all be credited to the authorities. There is continuity to history. Perhaps the remarkable success during this period was at the cost of subsequent ill effects. Besides, major problems were probably hidden behind those eye-catching numbers.
As everyone knows, the foundation of the so-called economic "miracle" of Taiwan was lain when the late Yin Chung-jung (尹仲容) led foreign-trade reform, or the so-called "first round of economic liberalization," from 1958 to 1962. However, the late Chiang Shuo-chieh (蔣碩傑), a former member of Academia Sinica, was not happy with what he viewed as a lackluster liberalization proces, as well as the inability of some systems and measures -- government-owned enterprises, finance and taxation -- to operate in acoordance with the reform.
After Yin passed away in 1963, the protection and control policies that were gradually lifted in the late 1950s turned around and went in the opposite direction and the situation worsened. The fixed "balanced" exchange rates and the system of foreign-exchange settlement remained the same. The prelude to the free-trade policy in the early 1960s became an accomplice of new mercantilism. The result is that the trade surplus increased year after year and foreign-exchange reserves accumulated along the way. In the early 1980s, the foreign-exchange reserves accumulated so quickly that the US opposed it.
Under the strong pressures of liberalization and internationalization, the government first pretended to be kind, then hesitated about what move to make next and finally looked upon the situation from the sidelines. The defense lines of fixed exchange rates and the system of foreign-exchange settlement finally broke down in the mid-1980s.
As the value of the NT dollar appreciated considerably, the export industry which was previously protected got into extreme difficulty. At that time, foreign exchange reserves accumulated over the years by the Central Bank of China led slowly to a currency overflow, thereby creating speculation in stocks and real estate.
Knowing where the profits lay, many business people would rather manipulate stock trading; they were not willing to help the export industry meet its challenge. The government attempted and accomplished nothing in the face of this unusual economic crisis, although it had huge sums of foreign exchange reserves.
All of these happenings finally led to the unbalanced development of industries, an explosive growth of big businesses and a corrupt social climate. It is difficult to explain the seriousness of these ill effects.
The above comments are part of an essay written by the late Hsing Mu-huan (邢慕寰), another member of Academia Sinica, in June 1995. The particular period Hsing described includes the entire term of Chiang Ching-kuo's rule. When he said that it is difficult to explain the seriousness of ill effects during this period, Hsing meant to indicate a deflationary phenomenon that has lasted until today after the burst of the speculative bubble.
Moreover, although the macro-economic indicators in the 1970s were satisfactory, economic growth rates manifested explosive rises and falls. The progress of labor productivity also tended to be sluggish. In particular, technological progress also slowed down quickly.
Another thing that should come up for discussion is the widely praised "Ten Key Infrastructure Projects" that started in 1974. The investment amount of this heroic undertaking reached more than NT$200 billion in five years. Because the first oil crisis that shocked the whole world was taking place at the same time, the giant investment of the Ten Key Infrastructure Projects happened to offset the deficit of private-sector spending and minimize the effect of the oil crisis on the domestic economy. It was an unexpected gain. A serious crowding-out effect and inflation could have happened if the implementation of the Ten Key Infrastructure Projects took place during a period of economic boom. Moreover, we should not give only accolades for the Ten Key Infrastructure Projects because there were also many project cases that proved to be unsuccessful.
In any case, it is very difficult to assess the development, merits and demerits of a certain historical period. Different people have different views, which are OK for reference only.
Wu Hui-lin is a research fellow at the Chung Hua Institution for Economic Research.
Translated by Grace Shaw
When Chinese President Xi Jinping (習近平) sits down with US President Donald Trump in Beijing on Thursday next week, Xi is unlikely to demand a dramatic public betrayal of Taiwan. He does not need to. Beijing’s preferred victory is smaller, quieter and in some ways far more dangerous: a subtle shift in American wording that appears technical, but carries major strategic meaning. The ask is simple: replace the longstanding US formulation that Washington “does not support Taiwan independence” with a harder one — that Washington “opposes” Taiwan independence. One word changes; a deterrence structure built over decades begins to shift.
Taipei is facing a severe rat infestation, and the city government is reportedly considering large-scale use of rodenticides as its primary control measure. However, this move could trigger an ecological disaster, including mass deaths of birds of prey. In the past, black kites, relatives of eagles, took more than three decades to return to the skies above the Taipei Basin. Taiwan’s black kite population was nearly wiped out by the combined effects of habitat destruction, pesticides and rodenticides. By 1992, fewer than 200 black kites remained on the island. Fortunately, thanks to more than 30 years of collective effort to preserve their remaining
After Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) met Chinese President Xi Jinping (習近平) in Beijing, most headlines referred to her as the leader of the opposition in Taiwan. Is she really, though? Being the chairwoman of the KMT does not automatically translate into being the leader of the opposition in the sense that most foreign readers would understand it. “Leader of the opposition” is a very British term. It applies to the Westminster system of parliamentary democracy, and to some extent, to other democracies. If you look at the UK right now, Conservative Party head Kemi Badenoch is
A Pale View of Hills, a movie released last year, follows the story of a Japanese woman from Nagasaki who moved to Britain in the 1950s with her British husband and daughter from a previous marriage. The daughter was born at a time when memories of the US atomic bombing of Nagasaki during World War II and anxiety over the effects of nuclear radiation still haunted the community. It is a reflection on the legacy of the local and national trauma of the bombing that ended the period of Japanese militarism. A central theme of the movie is the need, at
RSS