March 12th 2016


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Articles from this issue:

COVER STORY Several items missing from list of the big spend

CANBERRA OBSERVED Greens back Coalition in Senate voting reform

ENERGY Nuclear reprocessing feasible here: SA inquiry

HISTORY OF TAIWAN Fifty-year journey from poverty to prosperity

SPEECH IN PARLIAMENT Warning: wolves in anti-bullying clothing

EDITORIAL Turnbull ignores three elephants in the room

DOMESTIC AND FAMILY VIOLENCE Family portrait or ideological caricature?

OPINION Goebbels revisited: the attack on Cardinal Pell

FAMILY AND SOCIETY SSCA apologists try to shrug off media furore

EUTHANASIA Legitimate denial of choice at end of life (Part II of two)

NATIONAL AFFAIRS Welcome backdown on vaccinations

ENVIRONMENT Food bowl emptied due to conservationist myopia

MUSIC Much-loved concertos clouded with melancholy

CINEMA Spotlight in the darkness: Spotlight

BOOK REVIEW Governing Middle-earth

BOOK REVIEW A land of contrasts

LETTERS

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HISTORY OF TAIWAN
Fifty-year journey from poverty to prosperity


by Jeffry Babb

News Weekly, March 12, 2016

When Chiang Kai-shek moved the capital of the Republic of China (ROC) from Nanjing to Taipei in 1949, it was meant to be only temporary. Although this is not widely known, from the time of the stabilisation of China due to Chiang Kai-shek’s Northern Expedition to the Second Sino-Japanese War (1937–45), the Chinese economy had been growing vigorously. Chiang had no intention of leaving this all behind forever.

Lee Kwoh-ting

Following the Marco Polo Bridge Incident (1937), the Japanese Kwangtung Army invaded China proper. China’s economy was devastated. Many commentators, including some in Chiang’s own Kuomintang (KMT) believed that Mao Zedong’s promises of land to the peasants helped sway the countryside against the KMT. As it turned out, the famine following Mao’s lunatic Great Leap Forward killed tens of millions of country folk.

The KMT arrived in Taiwan with the expectation that they would soon return to mainland China. Like Taipei, the “temporary” capital, a great many buildings dating from this early period of KMT rule are shoddy because they were also meant only to be temporary.

The man who lost China

Though he may have earned the sobriquet “the man who lost China”, Chiang was no fool. For one thing, he had brought all of China’s gold reserves to Taipei. He had also brought many ancient treasures, which are now housed in the National Palace Museum in Taipei, one of the world’s great museums. The remnants in Beijing‘s National Palace in the Forbidden City – those specimens which escaped the rampaging Red Guards during the Cultural Revolution – are pitiful by comparison. Most essentially, Chiang knew the KMT could retreat no further. This was Chiang’s last chance.

Taiwan had problems. The infrastructure had been badly damaged by Allied bombing during World War II. While Taiwan had resources, not least its fertile soil, the economy had been integrated into the Japanese Empire. The Japanese colonial rulers had fostered some manufacturing industry, such as bicycles and stationery, but Taiwan’s economy was based mainly on primary industry.

The island now had to feed an extra 2 million refugees from mainland China. The United States provided some aid, but not enough to feed an extra 2 million mainlanders. Chiang embarked on the “Land to the Tiller” program of land reform. He had been urged to undertake similar programs in mainland China, but as his main support base was the landlord class, it had never got off the ground. In Taiwan, the landlords were Taiwanese.

When we say “landlords”, the farms were fairly small. The landlords sold off their plots to the tenants, almost always giving them what they imagined to be the worst parts of their farms, such as land adjoining highways. As it turned out, in the long run, these “bad” plots were the most valuable. The government compensated the landlords with stock in government enterprises, such as Taiwan Cement and Taiwan Sugar, which proved to be very good investments.

Not everyone could afford to eat rice. Many Taiwanese had to make do with sweet potatoes or di gua. The term “sweet potato” came to mean “Taiwanese”, as opposed to Mainlander. Rice rations were doled out to government employees as part of their salaries, a practice that continued until fairly recently. An egg was treasured. People who grew up in this period of scarcity are frequently noticeably less physically developed than those who grew up in the years of plenty.

The “Land to the Tiller” program had several aims. First, it aimed to secure favour from small farmers for the KMT. The second aim was to boost agricultural productivity. As agriculture was the base of the economy, if the economy was to grow, then agricultural productivity must be improved. Many readers will recall the canned asparagus from Taiwan which was the centrepiece of many ladies’ luncheons during the 1950s and ’60s. The surplus capital generated from agriculture was used to stimulate manufacturing industry.

The Straits crises

The KMT still had to worry about the People’s Republic of China (PRC). Taiwan still holds two island groups which are within a short distance of mainland China: Quemoy (now usually known as Kinmen) and Matsu. Both islands are within artillery range of the mainland. The First Taiwan Strait Crisis (1954–55) and the Second Taiwan Strait Crisis (1958) resulted in casualties on both sides. An attempted landing on Quemoy by People’s Liberation Army (PLA) troops was repulsed, with the PLA taking heavy losses. Exchanges of artillery fire continued for years.

Retaining the offshore islands was essential if the KMT was to launch an amphibious attack on the Chinese mainland, as a precursor to a full-scale invasion of mainland China. Without these islands to act as jumping off points, “recovering the mainland” would just be empty rhetoric.

Under Chiang Kai-shek’s rule, Taiwan was a rather dour place. During the Vietnam War, Taipei was a rest and recreation (R&R) destination. Lots of young Americans on leave from a nasty war were determined to have fun. The US Seventh Fleet patrolled the Taiwan Strait. It was not all one way. The ROC Black Cat Squadron flew U-2 high-level reconnaissance aircraft over mainland China. The Black Bats Squadron flew a variety of aircraft, specialising in ultra low-level flying, often around 100 to 200 metres. Both squadrons lost aircraft over mainland China. The operation was run by the CIA, with pilots from the ROC.

Conflict rose over the best strategy for Taiwan. Some of the old generals wanted a fully militarised society, with all resources devoted to recovering the mainland. Saner heads advocated economic growth as a means of generating wealth and employment. Military service was universal for males.

The Chinese do not see any virtue in military endeavours. National service was almost universally detested and regarded as a waste of time; a period of extreme boredom performed only under duress. The traditional Chinese attitude to soldiers is summed up in the phrase “you don’t use good iron to make nails”.

KT Lee’s economic guidance

Taiwan was, at this time, blessed with an economic planner of extraordinary ability. KT Lee (Lee Kwoh-ting) graduated from the National Central University (also known as Nanjing University) in 1930 and later attended Cambridge University, graduating in 1934. Lee (1910–2001) was economics minister from 1965 to 1969 and finance minister from 1969 to 1976. He was not a planner in the Soviet sense; he guided, rather than directed. Nor was the ROC’s a planned economy.

Lee understood that Taiwan’s most plentiful resource was labour. Initially, Taiwan’s cheap labour was employed assembling parts from overseas companies, mainly from Japan and later the United States. As economic growth gathered pace, Taiwan began to flood the world with TCF (textiles, clothing and footwear) product and “junk” such as giftware and toys. By the early 1980s, it was difficult to find in Australian stores consumer goods that were not made in Taiwan.

Australia’s manufacturers could not compete with Taiwan’s energetic entrepreneurs, although Australia found in Taiwan a booming market for goods such as coal, iron ore, milk powder and meat. Australia and Taiwan had complementary economies.

KT Lee is often said to be the father of Taiwan’s electronics industry. He made it quite clear that he had no attachment to the TCF industries. He would tell visiting officials: “Once we’re not competitive in TCF, we’ll be out of it.” Taiwan is still competitive in textiles; but as for footwear and clothing factories, they are almost impossible to find.

During these years Taiwan’s young people headed to the U.S. in droves to study, almost exclusively computer programming or electronic engineering. Some came back, some didn’t. The ones that returned often went into start-ups.

The first ”Made in Taiwan” electrical goods were almost laughably primitive, but by the mid 1980s, clones of IBM personal computers from Taiwan had a stranglehold on the Australian market. The Taiwan clones only lasted around 18 months, but technology was changing so quickly that after 18 months the computers were obsolete anyway.

It was not strictly legal to make clones without the permission of IBM, but respect for intellectual property has never been Taiwan’s strong suit. Taiwan’s entrepreneurs soon learned that if they were to stay ahead of the competition they must climb the value chain. Technology was what sold products and “value eaters” like labour had to be eliminated as far as possible.

KT Lee’s legacy is a society dominated by high tech. Taiwan’s prosperity depends on an open society, open markets and intellectual creativity. Taiwan must attract highly educated intellectuals who could get a job anywhere in the world, so it must be able to assure them that “life’s good in Taiwan”.

When Chiang Ching-kuo, Chiang Kai-shek’s son, left the scene in 1988, Taiwan was a prosperous society where everyone worked. Taiwan today is richer but less equal. The gap between those with highly marketable skills and those who simply plod along, including most graduates from Taiwan’s extraordinary variety of so-called ”universities”, continues to grow.

The end of Chiang Kai-shek’s oppressive “White Terror” in 1987, abolished by Chiang Ching-kuo, ushered in an atmosphere of ferment the like of which had never been seen. Forbidden topics like Taiwan independence were freely discussed. The environment went from “nothing is political” to “everything is political”.

Many of the early activists did their cause little credit. Chen Shui-bian, mayor of Taipei then president of the ROC from 2000 to 2008, was known for his clowning. Chen, as the first non-KMT president, had a heavy load to bear. Following his second term in office, he was found guilty of corruption and became mentally unstable. Democratic Progressive Party (DPP) supporters are divided over his legacy. Some believe that “Ah-Bian” was framed by the KMT and other DPP supporters say that “Ah-Bian” let them down and caused them to lose face.

In the period since Taiwan achieved economic takeoff, the island has relied on the work ethic of its people and its famously adaptable entrepreneurs. KT Lee is known as the father of Taiwan’s economic miracle; but for every KT Lee, there are 10 million little Taiwanese battlers hard at work. They are Taiwan’s real heroes.




























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