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{{Short description|Period of rapid economic growth in Taiwan, as one of the Four Asian Tigers}}
{{Refimprove|date=September 2018}}
{{Infobox Chinese
|image= 
|imagesize = 
|description=
|t = 臺灣奇蹟
|p = Táiwān Qíjī
|w = T′ai²-wan¹ Ch′i²-chi¹
|poj = Tâi-oân Kî-chek
|tl = Tâi-uân Kî-Tsik
|phfs = Thòi-vàn Khì-chiak
|altname = Taiwan Economic Miracle
|t2 = 臺灣經濟奇蹟
|p2 = Táiwān Jīngjì Qíjī
|w2 = T′ai²-wan¹ Ching¹-chi⁴ Ch′i²-chi¹
|poj2 = Tâi-oân Keng-chè Kî-chek
|tl2 = Tâi-uân King-Tsè Kî-Tsik
|phfs2 = Thòi-vàn Kîn-chi Khì-chiak
}}
The '''Taiwan Miracle''' ({{zh|t=臺灣奇蹟|p=Táiwān Qíjī|poj=Tâi-oân Kî-chek}}) or '''[[Taiwan]] Economic Miracle''' refers to [[Taiwan]]'s rapid economic development to a [[Developed country|developed]], [[World Bank high-income economy|high-income]] country during the latter half of the twentieth century. <ref>The phrase was apparently first used in  {{cite book |last = Gold |first = Thomas B. |url = https://books.google.com/books?id=7GemBgAAQBAJ |year = 1985 |title = State and Society in the Taiwan Miracle |publisher = Armonk, N.Y. : M.E. Sharpe |location = Armonk, N.Y. |isbn = 9781317459408 |access-date = 2023-03-19 |archive-date = 2023-03-28 |archive-url = https://web.archive.org/web/20230328171826/https://books.google.com/books?id=7GemBgAAQBAJ |url-status = live }}</ref>

As it developed alongside [[South Korea]], [[Singapore]], and [[Hong Kong]], [[Taiwan]] became known as one of the "[[Four Asian Tigers]]". Taiwan was the first developing country to adopt an export-oriented trade strategy after World War II.<ref name=":0">{{Cite journal |last=Irwin |first=Douglas A. |date=2023 |title=Economic ideas and Taiwan's shift to export promotion in the 1950s |url=https://onlinelibrary.wiley.com/doi/10.1111/twec.13395 |journal=The World Economy |volume=46 |issue=4 |pages=969–990 |language=en |doi=10.1111/twec.13395 |s2cid=256974921 |issn=0378-5920 |access-date=2023-02-26 |archive-date=2023-02-26 |archive-url=https://web.archive.org/web/20230226010018/https://onlinelibrary.wiley.com/doi/10.1111/twec.13395 |url-status=live |url-access=subscription }}</ref>

==Background==
[[File:GDP per capita development in Taiwan.svg|thumb|GDP per capita development in Taiwan]]
After a period of [[Chinese hyperinflation|hyperinflation in the late 1940s]] when the Kuomintang-led [[government of the Republic of China]] military regime of [[Chen Yi (Kuomintang)|Chen Yi]] overprinted the [[Old Taiwan dollar|Taiwanese dollar]] against the previous [[Taiwanese yen]] in the [[Taiwan under Japanese rule|Japanese era]], it became clear that a new and stable currency was needed. Along with the $4 billion in financial aid and soft credit{{cn|date=January 2024}} provided by the US (as well as the indirect economic stimulus of US food and military aid) over the 1945–1965 period, and a more direct infusion of 41 Billion US dollars in free development aid up until year 1975<ref>[https://www.econstor.eu/bitstream/10419/93677/1/767437535.pdf Aid and development in Taiwan, South Korea, and South Vietnam By: Gray, Kevin]</ref> (Now worth $242 Billion US Dollars in 2024 values as adjusted for inflation).<ref>[https://www.in2013dollars.com/us/inflation/1975?amount=1  CPI Inflation Calculator]</ref> Taiwan thus had the necessary capital to restart its economy. Further, the Kuomintang government instituted many laws and land reforms that it had never effectively enacted on mainland China.{{cn|date=January 2024}}

A [[land reform]] law, inspired by the same one that the Americans were enacting in occupied [[Japan]], removed the landlord class (similar to what happened in Japan), and created a higher number of peasants who, with the help of the [[sovereign state|state]], increased the agricultural output dramatically. This was the first excedent accumulation{{huh|date=December 2019}} source.<ref name="historycooperative.org">{{Cite web|url=https://historycooperative.org/journal/the-labour-movement-in-taiwan/|title=The Labour Movement in Taiwan|date=21 September 2004|access-date=21 October 2019|archive-date=21 October 2019|archive-url=https://web.archive.org/web/20191021063230/https://historycooperative.org/journal/the-labour-movement-in-taiwan/|url-status=live}}</ref> It inverted capital creation, and liberated the agricultural workforce to work in the urban sectors. However, the government imposed on the peasants an unequal exchange with the industrial economy, with credit and fertilizer controls and a non monetary exchange to trade agrarian products (machinery) for rice. With the control of the banks (at the time, being the property of the [[government]]), and import licenses, the state oriented the Taiwanese economy to [[import substitution industrialization]], creating initial capitalism in a fully protected [[Market (economics)|market]].

It also, with the help of [[USAID]], created a massive industrial infrastructure, communications, and developed the educational system.<ref>{{Cite book |last=JACOBY |first=NEIL H. |title=AN EVALUATION OF U. S. ECONOMIC AID TO FREE CHINA, 1951-1965 |publisher=BUREAU FOR THE FAR EAST AGENCY FOR INTERNATIONAL DEVELOPMENT |year=1966 |url=https://pdf.usaid.gov/pdf_docs/PNAAK054.pdf |pages=20 |language=English |access-date=2023-02-16 |archive-date=2023-03-28 |archive-url=https://web.archive.org/web/20230328162558/https://pdf.usaid.gov/pdf_docs/PNAAK054.pdf |url-status=dead }}</ref> Several government bodies were created and four-year plans were also enacted. Between 1952 and 1982, economic growth was on average 8.7%, and between 1983 and 1986 at 6.9%. The [[gross national product]] grew by 360% between 1965 and 1986. The percentage of global exports was over 2% in 1986, over other recently industrialized countries, and the global industrial production output grew a further 680% between 1965 and 1986. The social gap between the rich and the poor fell (Gini: 0.558 in 1953, 0.303 in 1980), even lower than some Western European countries, but it grew a little in the 80's. [[Healthcare in Taiwan|Health care]], [[Education in Taiwan|education]], and  [[quality of life]] also improved.<ref>{{Cite web|url=http://www.taiwan.com.au/Polieco/History/ROC/report04.html|archive-url=https://web.archive.org/web/20100202032138/http://www.taiwan.com.au/Polieco/History/ROC/report04.html|url-status=dead|title=The Story of Taiwan, Economy|archive-date=2 February 2010}}</ref>  The flexibility of the productive system and the industrial structure meant that Taiwanese companies had more chances to adapt themselves to the changing international situation and the global economy.{{cn|date=January 2024}}

The economist [[Sho-Chieh Tsiang|S. C. Tsiang]] played an influential role in shifting towards an export-oriented trade strategy.<ref name=":0" /> In 1954, he called for Taiwan to deal with its chronic shortage of foreign exchange by increasing exports rather than reduce imports.<ref name=":0" /> In 1958, the policymaker [[Yin Chung-jung|K. Y. Yin]] pushed for the adoption of Tsiang's ideas.<ref name=":0" />

In 1959, a 19-point program of Economic and Financial Reform, liberalized market controls, stimulated exports and designed a strategy to attract foreign companies and foreign capital. An exports processing area was created in [[Kaohsiung]] and in 1964, [[General Instrument]]s pioneered in externalizing electronic assembly in Taiwan. Japanese companies moved in, reaping the benefits of low salaries, the lack of environmental laws and controls, a well-educated and capable workforce, and the support of the [[Government of the Republic of China|government]].{{cn|date=January 2024}} But the nucleus of the industrial structure was national, and it was composed by a large number of small and medium-sized enterprises, created within families with the family savings, and savings cooperatives nets called [[Hui (informal loan club)|hui]] ({{lang-zh|t=會|p=Huì|poj=Hōe}}; [[Pha̍k-fa-sṳ]]: ''Fi''). They had the support of the government in the form of [[subsidies]] and [[Credit (finance)|credits]] loaned by the banks.

Most of these societies appeared for the first time in rural zones near metropolitan areas, where families shared work (in the parcels they owned and in the industrial workshops at the same time). For instance, in 1989 in [[Changhua County|Changhua]], small enterprises produced almost 50% of the world's umbrellas.{{cn|date=January 2024}} The State attracted foreign companies in order to obtain more [[Financial capital|capital]] and to get access to foreign markets, but the big foreign companies got contracts with this huge net of small sized, familiar and national companies, which were a very important percentage of the industrial output.

Foreign investment never represented an important component in the Taiwanese economy, with the notable exception of the electronic market. For instance, in 1981, direct foreign investment was a mere 2% of the [[GNP]], foreign companies employed 4.8% of the total workforce, their production was 13.9% of the total production and their exports were 25.6% of nationwide exports.{{cn|date=January 2024}} Access to the global markets was facilitated by the Japanese companies and by the American importers, who wanted a direct relationship with the Taiwanese brands. No big [[multinational corporation]]s were created (like in [[Singapore]]), or huge national conglomerates (like [[South Korea]]n [[chaebol]]s), but some industrial groups, with the support of the government, grew, and became in the 90's huge companies totally internationalized. Most of the development was thanks to the flexibility of family businesses which produced for foreign traders established in Taiwan and for international trade nets with the help of intermediaries.

After retreating to Taiwan, Chiang learned from his mistakes and failures in the mainland and blamed them for failing to pursue [[Sun Yat-sen]]'s ideals of [[Tridemism]] and [[welfarism]]. Chiang's land reform more than doubled the land ownership of [[Taiwanese farmers]]. It removed the rent burdens on them, with former land owners using the government compensation to become the new capitalist class. He promoted a mixed economy of state and private ownership with economic planning. Chiang also promoted a 9-years compulsory education and the importance of science in [[Taiwanese education]] and values. These measures generated great success with consistent and strong growth and the stabilization of inflation.<ref>[https://www.cuhk.edu.hk/ics/21c/media/articles/c162-201706021.pdff Chinese University of Hong Kong] {{dead link|date=March 2023}}</ref>

==Era of globalization==
In the 1970s, protectionism was on the rise, and the [[United Nations]] switched recognition from the [[government of the Republic of China]] to the [[government of the People's Republic of China]] as the sole legitimate representative of mainland [[China]]. It was expelled by [[General Assembly Resolution 2758]] and replaced in all UN organs with the PRC. The [[Kuomintang]] began a process of enhancement and modernization of the industry, mainly in high technology (such as [[microelectronics]], [[personal computers]] and [[peripheral]]s). One of the biggest and most successful Technology Parks was built in [[Hsinchu]], near [[Taipei]].{{cn|date=January 2024}}

Many Taiwanese brands became important suppliers of worldwide known firms such as [[Digital Equipment Corporation|DEC]] or [[IBM]], while others established branches in [[Silicon Valley]] and other places inside the [[United States]] and became known.{{cn|date=January 2024}} The government also recommended the textile and clothing industries to enhance the quality and value of their products to avoid restrictive import quotas, usually measured in volume. The decade also saw the beginnings of a [[Labor movement in Taiwan|genuinely independent union movement]] after decades of repression. Some significant events occurred in 1977, which gave the new [[trade union|unions]] a boost.{{cn|date=January 2024}}

One was the formation of an independent union at the Far East Textile Company after a two-year effort discredited the former management-controlled union. This was the first union that existed independently of the Kuomintang in Taiwan's post-war history (although the Kuomintang retained a minority membership on its committee). Rather than prevailing upon the state to use [[martial law]] to smash the union, the management adopted the more cautious approach of buying workers' votes at election times. However, such attempts repeatedly failed and, by 1986, all of the elected leaders were genuine unionists.<ref name="historycooperative.org"/> Another, and, historically, the most important, was the now called "[[Zhongli incident]]".

In the 1980s, Taiwan had become an economic power, with a mature and diversified economy, solid presence in international markets and huge [[foreign exchange reserves]].<ref>[http://investintaiwan.nat.gov.tw/en/env/stats/foreign_exchange.html Foreign Exchange Reserves, Taiwan and other major countries] {{Webarchive|url=https://web.archive.org/web/20040920012854/http://investintaiwan.nat.gov.tw/en/env/stats/foreign_exchange.html |date=20 September 2004 }}</ref> Its companies were able to go abroad, internationalize their production, investing massively in Asia (mainly in People's Republic of [[China]]) and in other [[Organisation for Economic Co-operation and Development]] countries, mainly in the [[United States]].

Higher salaries and better organized [[trade unions]] in [[Taiwan]], together with the reduction of the Taiwanese [[export quota]]s meant that the bigger Taiwanese companies moved their production to [[China]] and [[Southeast Asia]]. The [[civil society]] in a now developed country, wanted democracy, and the rejection of the KMT [[dictatorship]] grew larger.<ref>{{Cite web|url=http://www.taiwan.com.au/Polieco/History/ROC/report02.html|title=The Story of Taiwan, Politics|access-date=2006-12-30|archive-date=2006-12-30|archive-url=https://web.archive.org/web/20061230080154/http://www.taiwan.com.au/Polieco/History/ROC/report02.html|url-status=dead}}</ref> A major step occurred when [[Lee Teng-hui]], a native from [[Taiwan]], became [[President (government title)|President]], and the KMT started a new path searching for democratic legitimacy.

Two aspects must be remembered: the KMT was on the center of the structure and controlled the process, and that the structure was a net made of relations between the enterprises, between the enterprises and the State, between the enterprises and the global market thanks to trade companies and the international economic exchanges.<ref>Manuel Castells: Information Age, Third Volume, The End of The Millennium, page 303, Alianza Editorial, 1998</ref> Native Taiwanese were largely excluded from the mainlanders dominated government, so many went into the business world.

In 1952, Taiwan had a per capita gross national product (GNP) of $170, placing the island's economy squarely between Zaire and Congo.{{cn|date=January 2024}} But, by 2018 Taiwan's per capita GNP, adjusted for purchasing power parity (PPP), had soared to $53,074, around or above some developed West European economies and Japan.{{cn|date=January 2024}}

According to economist [[Paul Krugman]], the rapid growth was made possible by increases in capital and labor but not an increase in efficiency. In other words, the savings rate increased and work hours were lengthened, and many more people, such as women, entered the work force.<ref>{{cite web |date=Nov 1994|title=Paul Krugman |work=The Myth of Asia's Miracle |url=http://www.pkarchive.org/trade/myth.html |access-date=30 December 2010}}</ref>{{irrelevant citation|date=September 2018|reason=This article does not mention Taiwan}}

[[Dwight H. Perkins (economist)|Dwight Perkins]] and others cite certain methodological flaws in Krugman and Alwyn Young's research, and suggest that much of Taiwan's growth can be attributed to increases in productivity. These productivity boosts were achieved through land reform, structural change (urbanization and industrialization), and an economic policy of export promotion rather than import substitution.{{citation needed|date=September 2018}}

==Future growth==
[[File:Taipei Night Skyline from Hongludi 20240113.jpg|270px|thumb|[[Taipei]], the capital city and financial centre of Taiwan]]
Economic growth has become much more modest since the late 1990s. A key factor to understand this new environment is the rise of China, offering the same conditions that made possible, 40 years ago, the Taiwan Miracle (a quiet political and social environment, cheap and educated workers, absence of independent trade unions).{{cn|date=January 2024}}

One major difference with Taiwan is the focus on [[English language|English]] education. Mirroring [[Hong Kong]] and [[Singapore]], the ultimate goal is to become a [[country]] fluent in three languages{{cn|date=January 2024}} ([[Taiwanese Hokkien|Taiwanese]]; [[Taiwanese Mandarin|Mandarin]], the national language of [[China]], and [[Taiwan]]; and [[English language|English]], becoming a bridge between East and West).

According to western financial markets, [[consolidation (business)|consolidation]] of the [[financial market|financial sector]] remains a concern as it continues at a slow pace, with the market split so small that no [[bank]] controls more than 10% of the market, and the Taiwanese government is obligated, by the [[WTO]] accession treaty, to open this sector between 2005 and 2008.<ref>{{Cite web |url=http://www.gio.gov.tw/taiwan-website/4-oa/wto/wto01.htm |title=Trade and Investment Opportunities Presented by Taiwan's Accession to the World Trade Organization |access-date=2006-12-30 |archive-date=2012-02-10 |archive-url=https://web.archive.org/web/20120210185945/http://www.gio.gov.tw/taiwan-website/4-oa/wto/wto01.htm |url-status=live }}</ref>

However, many financial analysts estimate such concerns are based upon mirror-imaging of the Western model and do not take into account the already proven Asian Tiger model. Yet, recently,{{when|date=December 2021}} [[credit card debt]] has become a major problem, as the ROC does not have an individual [[bankruptcy]] law.{{cn|date=January 2024}}

Generally, [[transport]]ation [[infrastructure]] is very good and continues to be improved, mainly in the west side of the island.  Many infrastructure improvements are currently being pursued, such as the first [[rapid transit]] lines opening in Kaohsiung in 2008 and a doubling in size of Taipei's rapid transit system by 2013 now underway; the country's [[highways]] are very highly developed and in good maintenance and continue to be expanded, especially on the less developed and less populated east coast, and a controversial electronic [[toll road|toll]] system has recently{{when|date=January 2024}} been implemented.

The completion of the [[Taiwan High Speed Rail]] service connecting all major cities on the western coast, from [[Taipei]] to [[Kaohsiung]] is considered to be a major addition to Taiwan's transportation infrastructure. The ROC government has chosen to raise private financing in the building of these projects, going the build-operate-transfer route, but significant public financing has still been required and several [[scandal]]s have been uncovered.  Nevertheless, it is hoped that the completion of these projects will be a big economic stimulus, just as the subway in Taipei has revived the real estate market there.{{cn|date=January 2024}}

=== Technology sector ===
[[File:Neihu during 2015 winter solstice.jpg|thumb|left|Taipei [[Neihu District|Neihu]] Technology Park]]
Taiwan continues to rely heavily on its [[technology]] sector, a specialist in [[manufacturing]] [[outsourcing]]. Recent developments include moving up the [[food chain]] in [[brand]] building and design. [[LCD]] manufacturing and [[LED]] lights are two newer sectors in which Taiwanese companies are moving. Taiwan also wants to move into the [[biotechnology]] sector, the creation of [[fluorescent]] pet [[fish]] and a research-useful [[fluorescent pig]]<ref>{{Cite journal | last1 = Hsiao | first1 = F. S. H. | last2 = Lian | first2 = W. S. | last3 = Lin | first3 = S. P. | last4 = Lin | first4 = C. J. | last5 = Lin | first5 = Y. S. | last6 = Cheng | first6 = E. C. H. | last7 = Liu | first7 = C. W. | last8 = Cheng | first8 = C. C. | last9 = Cheng | first9 = P. H. | doi = 10.2527/jas.2011-3889 | last10 = Ding | first10 = S. T. | last11 = Lee | first11 = K. H. | last12 = Kuo | first12 = T. F. | last13 = Cheng | first13 = C. F. | last14 = Cheng | first14 = W. T. K. | last15 = Wu | first15 = S. C. | title = Toward an ideal animal model to trace donor cell fates after stem cell therapy: Production of stably labeled multipotent mesenchymal stem cells from bone marrow of transgenic pigs harboring enhanced green fluorescence protein gene | journal = Journal of Animal Science | volume = 89 | issue = 11 | pages = 3460–3472 | year = 2011 | pmid =  21705633| doi-access = free }}</ref> being two examples.  Taiwan is also a leading grower of [[orchid]]s.

Taiwan's information technology (IT) and electronics sector has been responsible for a vast supply of products since the 1980s. The [[Industrial Technology Research Institute]] (ITRI) was created in the 1973 to meet new demands from the burgeoning tech industry. This led to start-up companies like [[TSMC|Taiwan Semiconductor Manufacturing Company]] (TSMC) and the construction of the [[Hsinchu Science Park|Hsinchu Science and Industrial Park]] (HSP), which includes around 520 high-tech companies and 150,000 employees.<ref name="投資組投資服務科">{{Cite web|url=http://www.sipa.gov.tw/english/home.jsp?serno=201003210015&mserno=201003210003&menudata=EnglishMenu&contlink=content%2Fintroduction_2_1.jsp&serno3=201003210021|title=Introduction|last=投資組投資服務科|date=10 March 2017|website=www.sipa.gov.tw|language=en|access-date=8 December 2017|archive-date=16 December 2018|archive-url=https://web.archive.org/web/20181216074229/https://www.sipa.gov.tw/english/home.jsp?serno=201003210015&mserno=201003210003&menudata=EnglishMenu&contlink=content%2Fintroduction_2_1.jsp&serno3=201003210021|url-status=live}}</ref> By 2015, a bulk of the global market share of motherboards (89.9 percent), Cable CPE (84.5 percent), and Notebook PCs (83.5 percent) comprise both offshore and domestic production. It placed second in producing [[Thin-film-transistor liquid-crystal display|Transistor-Liquid Crystal Display]] (TFT-LCD panels) (41.4 percent) and third for LCD monitors (27 percent) and LED (19 percent).<ref name="Council">{{Cite web|url=https://www.ndc.gov.tw/en/News.aspx?n=607ED34345641980&sms=B8A915763E3684AC|title=National Development Council-Taiwan Statistical Data Book|last=Council|first=National Development|date=26 May 2015|website=National Development Council|access-date=8 December 2017|archive-date=16 December 2018|archive-url=https://web.archive.org/web/20181216031041/https://www.ndc.gov.tw/en/News.aspx?n=607ED34345641980&sms=B8A915763E3684AC|url-status=live}}</ref> Nonetheless, Taiwan is still heavily reliant on offshore capital and technologies, importing up to US$25 billion worth of machinery and electrical equipment from Mainland China, US$16 billion from Japan, and US$10 billion from the U.S.<ref name="Council"/>

In fact, the TFT-LCD industry in Taiwan grew primarily from state-guided personnel recruitment from Japan and inter-firm technology diffusion to fend off Korean competitors. This is due to Taiwan's unique trend of export-oriented small and medium enterprises (SME) – a direct result of domestic-market prioritization by state-owned enterprises (SOE) in its formative years.<ref>{{Cite book|title=A Political Explanation of Economic Growth|last=Wu|first=Yongping|publisher=Harvard University Asia Center|year=2005|pages=46}}</ref> While the development of SMEs allowed better market adaptability and inter-firm partnerships, most companies in Taiwan remained original equipment manufacturers (OEM) and did not – other than firms like [[Acer Inc.|Acer]] and [[Asus]] – expand to original design manufacturing (OBM).<ref>{{Cite journal|last=CHEVALÉRIAS|first=PHILIPPE|date=2010|title=Taiwanese Economy After the Miracle: An Industry in Restructuration, StructuralWeaknesses and the Challenge of China|url=https://journals.openedition.org/chinaperspectives/5301|journal=China Perspectives|volume=3|pages=40|access-date=2019-08-05|archive-date=2019-06-15|archive-url=https://web.archive.org/web/20190615063649/https://journals.openedition.org/chinaperspectives/5301|url-status=live}}</ref> These SMEs provide "incremental innovation" with regard to industrial manufacturing but do not, according to Dieter Ernst of the East–West Centre, a think-tank in Honolulu, surpass the "commodity trap", which stifles investment in branding and R&D projects.<ref>{{Cite news|url=http://www.economist.com/node/16220584|title=Hybrid vigour: Taiwan's tech firms are conquering the world—and turning Chinese|date=27 May 2010|newspaper=The Economist|access-date=8 December 2017|archive-date=9 December 2017|archive-url=https://web.archive.org/web/20171209043933/http://www.economist.com/node/16220584|url-status=live}}</ref>

The Taiwanese president [[Tsai Ing-wen]], of the [[Democratic Progressive Party]] (DPP) enacted policies building on the continued global influence of Taiwan's IT industry. To revamp and reinvigorate Taiwan's slowing economy, her "5+2" innovative industries initiative aims to boost key sectors such as biotech, sustainable energy, national defense, smart machinery, and the "Asian Silicon Valley" project.<ref>{{Cite book|title=Taiwan and China: Fitful Embrace|last=Dittmer|first=Lowell|publisher=University of California Press|year=2017|location=Oakland, California|pages=153}}</ref> President Tsai herself was the chairperson for TaiMed Biologics, a state-led start-up company for biopharmaceutical development with Morris Chang, the CEO of TSMC, as an external adviser.<ref>{{Cite book|title=Betting on Biotech: Innovation and the Limits of Asia's Developmental State|last=Wong|first=Joseph|publisher=Cornell University Press|year=2011|location=U.S.A.}}</ref> On 10 November 2016, the Executive Yuan formally endorsed a biomedical promotion plan with a budget of NT$10.94 billion (US$346.32 million).<ref>{{Cite web|url=http://nspp.mofa.gov.tw/nsppe/content_tt.php?post=104459|title=Biomedical plan fast-tracks Taiwan for top spot in Asia - New Southbound Policy Portal|website=New Southbound Policy|access-date=8 December 2017|archive-date=9 December 2017|archive-url=https://web.archive.org/web/20171209100023/http://nspp.mofa.gov.tw/nsppe/content_tt.php?post=104459|url-status=live}}</ref> 

At the opening ceremony for the Asia Silicon Valley Development Agency (ASVDA) in December 2016, Vice President Chen Chien-jen emphasized the increasing importance of enhancing not only local R&D capabilities, but also appealing to foreign investment.<ref>{{Cite web|url=http://nspp.mofa.gov.tw/nsppe/content_tt.php?post=106453&unit=346)|title=Asia Silicon Valley Development Agency launches in Taoyuan|date=27 December 2016|website=Ministry of Foreign Affairs, Republic of China|access-date=8 December 2017|archive-date=9 December 2017|archive-url=https://web.archive.org/web/20171209100126/http://nspp.mofa.gov.tw/nsppe/content_tt.php?post=106453&unit=346)|url-status=live}}</ref> For example, the HSP now focuses 40 percent of its total workforce on "R&D and technology development".<ref name="投資組投資服務科"/> R&D expenditures have been gradually increasing: In 2006, it amounted to NT$307 billion, but it increased to NT$483.5 billion (US$16 billion) in 2014, approximately 3 percent of the GDP.<ref>{{Cite web|url=https://www.ndc.gov.tw/en/News_Content.aspx?n=607ED34345641980&sms=B8A915763E3684AC&s=3CE82CC912356116|title=National Development Council-Taiwan Statistical Data Book|last=Council|first=National Development|date=9 November 2016|website=National Development Council|access-date=8 December 2017|archive-date=8 December 2017|archive-url=https://web.archive.org/web/20171208231424/https://www.ndc.gov.tw/en/News_Content.aspx?n=607ED34345641980&sms=B8A915763E3684AC&s=3CE82CC912356116|url-status=live}}</ref> The World Economic Forum's Global Competitiveness Report 2017–2018 profiled up to 140 countries, listing Taiwan as 16th place in university-industry collaboration in R&D, 10th place in company spending on R&D, and 22nd place in capacity for innovation.<ref>{{Cite web|url=http://www3.weforum.org/docs/GCR2017-2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf|title=The Global Competitiveness Report 2017–2018|last=Schwab|first=Klaus|website=World Economic Forum|access-date=2017-12-08|archive-date=2017-09-29|archive-url=https://web.archive.org/web/20170929142848/http://www3.weforum.org/docs/GCR2017-2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf|url-status=live}}</ref> Approved overseas Chinese and foreign investment totaled US$11 billion<ref name="auto">{{Cite web|url=http://eng.dgbas.gov.tw/public/data/dgbas03/bs2/yearbook_eng/Yearbook2016.pdf|title=Statistical Yearbook of the Republic of China 2016|date=October 2017|website=Directorate-General of Budget, Accounting and Statistics, Executive Yuan, Republic of China|access-date=2017-12-08|archive-date=2018-09-17|archive-url=https://web.archive.org/web/20180917162415/https://eng.dgbas.gov.tw/public/data/dgbas03/bs2/yearbook_eng/Yearbook2016.pdf|url-status=live}}</ref> in 2016, a massive increase from US$4.8 billion in 2015.<ref name="auto"/> However, the Investment Commission of the Ministry of Economic Affairs' (MOEAIC) monthly report from October 2017 estimated a decline in total foreign direct investment (between January and October 2017) to US$5.5 billion, which is a 46.09 percent decrease from the same time period of 2016 (US$10.3 billion).<ref>{{Cite web|url=https://www.moeaic.gov.tw/news.view?do=data&id=1201&lang=en&type=new_ann)|title=INVESTMENT COMMISSION, MOEA -|website=www.moeaic.gov.tw|language=en|access-date=8 December 2017|archive-date=9 December 2017|archive-url=https://web.archive.org/web/20171209044019/https://www.moeaic.gov.tw/news.view?do=data&id=1201&lang=en&type=new_ann)|url-status=live}}</ref>

=== Cross-strait relations ===
{{Unreferencedsect|date=January 2024}}
Debate on opening "[[Three Links]]" with the People's Republic of [[China]] were completed in 2008, with the security risk of economic dependence on PR China being the biggest barrier. By decreasing transportation costs, it was hoped that more money will be repatriated to Taiwan and that businesses will be able to keep operations centers in Taiwan while moving manufacturing and other facilities to mainland China.

A law forbidding any firm investing in China by more than 40% of its total assets on the mainland was dropped in June 2008, when the new [[Kuomintang]] government relaxed the rules to invest in China. Dialogue through semi-official organisations (the SEF and the ARATS) reopened on 12 June 2008 on the basis of the 1992 Consensus, with the first meeting held in [[Beijing]]. Taiwan hopes to become a major operations center in East Asia.

=== Regional free trade agreements ===
While China already has international [[free trade agreement]]s (FTA) with numerous countries through bilateral relations and regional organizations, the "Beijing factor" has led to the deliberate isolation of Taiwan from potential FTAs.<ref>{{Cite journal|last=Cheng|first=T.J.|date=July 2015|title=Global Opportunities, Local and Transnational Politics: Taiwan's Bid for FTAs|journal=American Journal of Chinese Studies|volume=22|pages=145}}</ref> In signing the [[Economic Cooperation Framework Agreement]] (ECFA) with China on 29 June 2010 – which permitted trade liberalization and an "early harvest" list of tariff cuts<ref>{{Cite book|title=Uncharted Strait: The Future of China-Taiwan Relations|last=Bush|first=Richard C.|publisher=Brookings Institution Press|year=2013|pages=50}}</ref> – former president Ma Ying-jeou wanted to not only affirm a stable economic relationship with China, but also to assuage its antagonism towards Taiwan's involvement in other FTAs. Taiwan later signed FTAs with two founding members of the [[Trans-Pacific Partnership]] (TPP) in 2013: New Zealand (ANZTEC)<ref>{{Cite web|url=https://www.mofa.gov.tw/en/Content_List.aspx?n=BEC57CB5B310C028|title=ANZTEC - Ministry of Foreign Affairs, Republic of China (Taiwan) 中華民國外交部 - 全球資訊網英文網|website=Ministry of Foreign Affairs, Republic of China (Taiwan) 中華民國外交部 - 全球資訊網英文網|access-date=8 December 2017|archive-date=19 July 2018|archive-url=https://web.archive.org/web/20180719054741/https://www.mofa.gov.tw/en/Content_List.aspx?n=BEC57CB5B310C028|url-status=live}}</ref> and Singapore (ASTEP).<ref>{{Cite web|url=https://www.mofa.gov.tw/en/News_Content.aspx?n=1E53CEEB4045643F&sms=C2D71E282D50644B&s=4255B85DA1615092|title=The Republic of China (Taiwan) and the Republic of Singapore sign an economic partnership agreement|date=11 July 2014|website=Ministry of Foreign Affairs, Republic of China (Taiwan)|access-date=8 December 2017|archive-date=19 July 2018|archive-url=https://web.archive.org/web/20180719054735/https://www.mofa.gov.tw/en/News_Content.aspx?n=1E53CEEB4045643F&sms=C2D71E282D50644B&s=4255B85DA1615092|url-status=live}}</ref> Exports to Singapore increased 5.6 percent between 2013 and 2014, but decreased 22 percent by 2016.<ref name="auto"/> 

In 2013, a follow-up bilateral trade agreement to the ECFA, the [[Cross-Strait Service Trade Agreement]] (CSSTA), faced large student-led demonstrations – the [[Sunflower Student Movement|Sunflower Movement]] – in Taipei and an occupation of the [[Legislative Yuan]]. The opposition contended<ref>{{Cite news|url=https://www.wsj.com/articles/thousands-protest-taiwans-trade-pact-with-china-1396163315|title=Thousands Protest Taiwan's Trade Pact With China|last=Hsu|first=Jenny W.|date=30 March 2014|work=Wall Street Journal|access-date=8 December 2017|language=en-US|issn=0099-9660|archive-date=8 December 2017|archive-url=https://web.archive.org/web/20171208064422/https://www.wsj.com/articles/thousands-protest-taiwans-trade-pact-with-china-1396163315|url-status=live}}</ref> that the trade pact would hinder the competency of SMEs, which encompassed 97.73 percent of total enterprises in Taiwan in 2016.<ref>{{Cite web|url=http://book.moeasmea.gov.tw/book/doc_detail.jsp?pub_SerialNo=2017A01297&click=2017A01297#|title=2017 White Paper on Small and Medium Enterprises in Taiwan|website=Small and Medium Enterprise Administration, Ministry of Economic Affairs|archive-url=https://web.archive.org/web/20171208175054/http://book.moeasmea.gov.tw/book/doc_detail.jsp?pub_SerialNo%3D2017A01297%26click%3D2017A01297|archive-date=8 December 2017|url-status=dead}}</ref> The TPP, on the other hand, still presents an opportunity for Taiwan. After the [[APEC Vietnam 2017#Economic Leaders.27 Meeting|APEC economic leaders' meeting]] in November 2017, President Tsai expressed deep support for the advancements made regarding the TPP<ref>{{Cite web|url=http://www.taipeitimes.com/News/taiwan/archives/2017/11/14/2003682227|title=Tsai praises TPP progress at APEC|website=[[Taipei Times]]|date=14 November 2017|access-date=8 December 2017|archive-date=2 December 2018|archive-url=https://web.archive.org/web/20181202083456/http://www.taipeitimes.com/News/taiwan/archives/2017/11/14/2003682227|url-status=live}}</ref> – given that U.S. President Donald Trump pulled out of the trade deal earlier in the year.<ref>{{Cite news|url=https://www.bbc.com/news/world-us-canada-38721056|title=Trump withdraws from TPP trade deal|date=2017|work=BBC News|access-date=8 December 2017|language=en-GB|archive-date=22 December 2017|archive-url=https://web.archive.org/web/20171222165230/http://www.bbc.com/news/world-us-canada-38721056|url-status=live}}</ref> President Tsai has also promoted the "New Southbound Policy", mirroring the "go south" policies upheld by former presidents Lee Teng-hui in 1993 and Chen Shui-Bian in 2002, focusing on partners in the Asia-Pacific region such as the Association of Southeast Asian Nations (ASEAN), Australia and New Zealand.<ref>{{Cite web|url=http://nspp.mofa.gov.tw/nsppe/news.php?post=112894&unit=376|title=New Southbound Policy: an Introduction (2017.02.28) - New Southbound Policy Portal|website=New Southbound Policy|access-date=8 December 2017|archive-date=9 December 2017|archive-url=https://web.archive.org/web/20171209100006/http://nspp.mofa.gov.tw/nsppe/news.php?post=112894&unit=376|url-status=live}}</ref>

==See also==
{{Portal|Taiwan}}
*[[Made in Taiwan]]
*[[Taiwanese Wave]]
*[[Japanese economic miracle]]
*[[Miracle on the Han River]]

==References==
{{Reflist}}

==External links==
*[http://ewto.trade.gov.tw/kmDoit.asp?CAT3531&CtNode=797 Official Website of Taiwan for WTO affairs, Documents]
*[http://ewto.trade.gov.tw/default.asp Official Website of Taiwan for WTO affairs]
*[http://www.wto.org/english/thewto_e/countries_e/chinese_taipei_e.htm Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) and the WTO]
*[https://web.archive.org/web/20041211125957/http://newton.uor.edu/Departments%26Programs/AsianstudiesDept/china-taiwan.html Cross-Strait Relations between China and Taiwan]
*{{unfit|1=[https://web.archive.org/web/20061201063629/http://www.heritage.org/Research/TradeandForeignAid/HL726.cfm A New Era in Cross-Strait Relations? Taiwan and China in the WTO]}}
*[http://www.fas.harvard.edu/~fairbank/tsw/text/Tung.htm China's Economic Leverage and Taiwan's Security Concerns with Respect to Cross-Strait Economic Relations]
{{Economy of Taiwan}}
{{Taiwan topics}}
{{Economic miracle and tiger economy}}

[[Category:Economic booms]]
[[Category:Taiwan under Republic of China rule]]
[[Category:Economic history of Taiwan]]
[[Category:Post–World War II economic booms]]