Tag Archive for: taiwan

JC History Tuition Online - What does the flying geese model suggest - Asian Tiger Economies Notes

What does the flying geese model suggest?

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Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan] 

The Flying Geese model
According to the Japanese economist Kaname Akamatsu, Asian economies could grow based on a ‘flying geese model’. (FG model). Akamatsu noted that ‘Wild geese fly in orderly ranks forming an inverse V, just as airplanes fly in formation‘. After Japan achieved rapid economic recovery in the post-WWII years, it took the lead in economic development, whereas its neighbouring countries like Taiwan and South Korea followed suit.

During the 1930s, a Japanese economist, Kaname Akamatsu, initially sketched out a long span of history involving the evolutionary interrelationships of a developing Asian country (Japan) with the advanced West. His interest was to examine how developing countries in general may catch up with the advanced ones through their mutual interactions.

[…] Akamatsu presents a stylized four-stage model of evolving trade patterns of a typical developing country along its development process (catching-up), where the existing manufactured products are clustered into two broad categories: “consumer goods” and “capital goods”.

An excerpt from “The Asian Developmental State and the Flying Geese Paradigm” by the United Nations Conferenceo n Trade and Development.

Application on Asian economies
Although the FG model was developed in the 1930s, academics have based their research on this model in subsequent decades. While Japan was at the forefront of economic development in Asia, the ‘four tiger’ economies, namely South Korea, Taiwan, Singapore and Hong Kong, played catch up.

After the 1970s, when Japan moved into an upper ladder of technological-intensive sectors such as the automobile industry and machinery after the first energy crisis in 1973-74, Taiwan and Korea kept chasing behind Japan’s footstep by moving to an upper ladder of technological sophistication with some varieties in the second phase; while Korea developed its brand name of automobiles, Taiwan, due to the limit of domestic market for scale economy, chose to develop auto parts and machinery tools instead of manufacturing the whole passenger cars.

An excerpt from “A Century of Development in Taiwan: From Colony to Modern State” by Peter C. Y. Chow.

For Taiwan, the government emulated Japan by focusing on labour-intensive production and exported to industrialised economies, like the USA, in the 1960s. In the 1970s, Taiwan then shifted from labour-driven to capital-oriented industries in response to rise labour and import costs, which were exacerbated by the twin oil shocks.

To some extent, it was the ‘flying geese’ pattern of industrial development by following the footstep of Japan’s industrialisation in the post-war era. Meier argued that it was a process of ‘learning by exporting’ by picking up the industrial sectors that Japan left when it moved up on the ‘ladder of comparative advantage’.

[…] Taiwan, as one of the first tier of the flying geese, faced more competition in the second stage of EP (export promotion) from the second tier followers in South East Asia and China after its economic reform and openness.

An excerpt from “Connecting Taiwan: Participation – Integration – Impacts” by Carsten Storm.

What can we learn from this article?
Consider the following question:
– Assess the importance of the ‘Flying Geese’ model in explaining the phenomenal growth of Taiwan from the 1970s to 1980s.

Join our JC History Tuition to learn more about the rise of Asian Tiger economies and the Global Economy. The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Online - How did Giant become the biggest bicycle manufacturer in the world

How did Giant become the biggest bicycle manufacturer in the world?

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Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan] 

Humble beginnings: A SME run by family and friends
In 1972, a 36 year-old engineer King Liu founded Giant with a group of associates, including Tony Lo, in Taichung (臺中). Lo was a business graduate from the National Taiwan University. Interestingly, Liu cycled to work at first to understand his product better.

In 1977, Liu secured a contract to produce bicycles for an overseas American company Schwinn, which was known for its 10-speed steel machines. Giant then functioned as an Original Equipment Manufacturer (OEM). Liu, who was fluent in Japanese, visited Japan to study the bicycle production process, replicating suitable work practices at Giant.

An unexpected turn of events: Turning setbacks into opportunities for success
In 1981, Giant set up its own bicycle brand as an Original Brand Manufacturer (OBM). It was a bold and unusual move as products that were manufactured in Taiwan were still viewed as low-quality and cheap.

Five years later, Giant brought its bicycles to the global market, starting with the Netherlands. Lo had identified Netherlands as a suitable European headquarters due to its geographical location, comprehensive infrastructure and integrated transport network. From there, Giant exported to other European markets. By the mid-1980s, Giant exported nearly 10 million bicycles a year.

The own-branding strategy was intensified when Schwinn shifted its OEM orders to its joint China’s company (China Bicycle Company) in 1985. Under this adverse condition, Liu steered the company into a new direction, through rapidly expanding its overseas branches around the world, in order to fill up the excess capacity generated by Schwinn’s withdrawal. The overseas branches were all targeted on pursuing entrepreneurial profit by promoting its own-brand Giant bicycles. Its overseas branch was established in Netherlands in 1986, the Us in 1987, Japan in 1989, Canada and Australia in 1991, and mainland China in 1992.

An excerpt from “Entrepreneurship and Taiwan’s Economic Dynamics” by Fu-Lai Tony Yu.

In the 1985, the US-based Schwinn switched to a Chinese supplier to keep production costs low. As a result, nearly three-quarters of Giant’s revenue had been affected. Yet, Giant did not relent. Instead, the company capitalised on the low production base in China, setting up two production plants in China, namely in Shanghai (上海) and Jiangsu (江苏).

Close collaboration with the government
In 1986, Giant launched a joint project with the government-funding Industrial Technology Research Institute (ITRI). They explored use of advanced materials to create carbon fiber bicycle frames. Giant also worked on other technology diffusion projects for aluminum welding with Chun Shan Institute of Science and Technology (CSIST).

Giant’s R&D efforts had paid off as tts revenue rose to over NT$ one billion.

In 1987, Giant pioneered the mass production of carbon bicycles, particularly the model called Cadex 980C. Lo dubbed it ‘Project 88’. Giant had applied computer-aided design and volume production techniques to manufacture these carbon fiber road bicycles. By 1991, Giant manufactured 20 thousand units of carbon bicycles.

Now, Giant one of the top bicycle manufacturers in the world.

Giant thinks of itself as an innovator in the fields of production and design, as well as competitive strategy. Giant was one of the first to upgrade parts and begin exporting them when Taiwan’s market became too costly. Giant was also the first Taiwanese company to use chrome alloy steel in their frames and to produce single-piece graphite bicycle frames.

An excerpt from “Strategy, Structure, and Performance of MNCs in China” by Yadong Luo.

What can we learn from this article?
Consider the following question:
– How far do you agree that Giant’s successes in export promotion were the result of Confucian culture?

Join our JC History Tuition to learn more about the rise of Asian Tiger economies and the Global Economy. The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Online - What does United Microelectronics do - Asian Tigers Notes

What does United Microelectronics do?

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Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan] 

Historical context: Silicon Valley of the East
On 22 May 1980, the United Microelectronics Corporation (UMC) was formed as the first-ever private integrated circuit (IC) company in Taiwan. The UMC was a product of the state-backed technology R&D institution, known as the Industrial Technology Research Institute (ITRI).

Under the leadership of President Chiang Ching-kuo (蔣經國), the government embarked on an ambitious project to encourage knowledge and skills acquisition in the private sector to intensify Taiwan’s industrial development.

The UMC occupied the Hsinchu Science Park (HSIP, 新竹科學園區), which was modelled after the Silicon Valley.

Located in Hsinchu County, approximately 80 km to the south of the capital city Taipei, HSIP had easy access to the international airport and harbours, a skilled labour force and abundant technological resources, including two national universities and the government-sponsored ITRI. Since its inception, HSIP has received over US$500 million from the government, earmarked for the acquisition and development of land and construction of housing and factories.

An excerpt from “The Silicon Dragon: High-Tech Industry in Taiwan” by Terence Tsai and Bor-Shiuan Cheng.

Enter the age of semiconductors
Under the astute leadership of Robert Tsao (曹興誠), who became president of UMC in 1982, the UMC became the first IC manufacturer in Taiwan to provide wafer foundry services.

In the late 1980s, the UMC broadened its scope of production, venturing into Dynamic Random Access Memory (DRAMs) and telecommunications circuitry. Tsao believed that specialisation in foundry services was the ideal model for the UMC to thrive.

The UMC turned out to be a successful spin-off from HSIP, as seen by its entry to the Taiwan Stock Exchange in 1985. From then on, the UMC went further to build increasingly advanced chips, such as Static Random Access Memory (SRAMs).

A similar venture: The TSMC
In 1987, the Taiwan Semiconductor Manufacturing Company (TSMC) was set up. It was the second spin-off from the HSIP after the UMC. The company was a joint development with the Dutch company Philipps and the Taiwanese government.

Interestingly, the Chiang government had invited Morris Chang, who later became founder of the TSMC, to lead the ITRI in the early 1980s. Chang had put forward the idea of creating a foundry industry in Taiwan.

Originally the ERSO sent a team to RCA in the US to learn integrated circuit (IC) manufacturing technology. After the team returned to Taiwan, the members spun off from ERSO to form UMC, which began chip manufacturing.

[…] Chang led a team spun off from ITRI to form TSMC in 1987. The new business model proved effective, and TSMC became the largest semiconductor foundry in the world with $5.3 billion of sales in 2000. TSMC was therefore mainly a Taiwanese creation with state participation in ownership (48 per cent in the beginning).

An excerpt from “The East Asian High-Tech Drive” by Yun-Peng Chu and Hal Hill.

Evidently, the successes of the UMC and TSMC were partly attributed to the joint efforts of the Taiwanese and American governments (Electronics Research and Service Organization, ERSO, the Radio Corporation of America, RCA). By giving their founders and core team members the opportunities to acquire the technical know-how, the aim of creating a semiconductor industry in Taiwan could finally materialise.

What can we learn from this article?
Consider the following question:
– Assess the view the the United Microelectronics Corporation was a crucial piece of the puzzle in explaining the remarkable growth of Taiwan in the 1980s.

Join our JC History Tuition to learn more about the rise of Asian Tiger economies and the Global Economy. The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Online - Why is Taiwan an Asian Tiger - Asian Tigers Notes

Why is Taiwan an Asian Tiger?

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Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan] 

Historical context: The Cold War
During the Korean War, the Truman administration committed its armed forces to defend the Republic of China (ROC) government under Chiang Kai-shek. President Truman announced on 27 June 1950 that the Seventh Fleet would be deployed to the Taiwan Strait. His intention was to protect Taiwan from any possible Chinese attack.

The US government switched its foreign policy stance towards Taiwan from a “hands-off” approach to increased military commitment. Its purpose was to contain a possible expansion of Communist influence in East Asia.

In retrospect, Truman’s new policy of 1950 disengaged the Chinese from their hot civil war while engaging them in the global Cold War.

[…] It had secured the ROC in Taiwan from a major military showdown with the PRC on the mainland in the 1950s, it had preserved the political unity and social stability of Taiwan through the 1960s, and it had provided an opportunity for the island’s economic growth in the 1970s.

An excerpt from “The History of Taiwan” by Xiaobing Li.

Export promotion and industrial restructuring
In the 1960s, Taiwan was one of the world’s primary exporter for consumers goods, such as umbrellas, toys and shoes. In 1966, Taiwan established Export Processing Zones (EPZs). The Chiang government sought to pursue an export-driven strategy as seen by the provision of tax incentives to spur businesses to engage in international trade.

In the 1970s, the government had realised that its reliance on the maturing light industry was not sustainable, given the rise of other developing countries that possessed cheap and abundant labour. As such, it embarked on heavy and chemical industrialisation (HCI), targeting steel and petrochemical production.

In 1973, the Industrial Technology Research Institute (ITRI) was formed to facilitate the conduct of research and development (R&D). A year later, the Electronics Research Service Organisation (ERSO) was also set up, focusing on areas like electronic packaging, semiconductors and display devices. Similarly, the Hsinchu Science Park was created in 1980 to intensify efforts to develop high-tech industries. The government’s attempts have paid off as seen from the rise of tech firms like the Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC).

In August 1974, Sun contacted Dr. Pan in the United States and invited him to Taiwan to produce a study of ways in which the government could upgrade local industry, with the electronics industry playing the leading role. […] Pan recommended that the electronics industry should focus on semiconductor technology and that the technology be acquired from abroad; that a two-part strategic planning team be formed, one part in the United States and one in Taiwan; and that an organizational capability for implementation within the state be set up. A U.S. partner was to be located for an agreement for technology transfer and training.

An excerpt from “The Role of the State in Taiwan’s Development” by Joel B. Aberdach.

The 1980s tech drive: OEM and ODM
In the 1980s, the government went through institutional reforms to integrate Taiwan into the global economy. It intensified its policies of trade liberalisation and financial deregulation, opening the economy gradually. Yet, it proved challenging following the opening of China in the late 1970s as part of Deng Xiaoping’s Four Modernisations (四個現代化). Many Taiwanese manufacturers shifted production to China in response to rising production costs.

In this decade, more Taiwanese manufacturers in the electronics and technology sectors adopted either of the following two models: Original Equipment Manufacturer (OEM) or Original Design Manufacturer (ODM). For OEM, the local companies manufactured products for transnational corporations that focused on product design and R&D. Over time, some of these firms transitioned to become ODMs, such as Acer.

While the ERSO projects were important for the PC industry, the two industry leaders, Acer and Mitac, were doing OEM for ITT since 1982 and Mitac was not part of two of the three big desktop computer projects run by ERSO. […] OEM manufacturing firms can leverage their relationships with outsourcing partners to upgrade. The experience of Mitac, Acer and other fims, such as the printed circuit board manufacturer, Compeq, confirms this theory of upgrading.

An excerpt from “Technology Transfer Between the US, China and Taiwan: Moving Knowledge” by Douglas B. Fuller and Murray A. Rubinstein.

What can we learn from this article?
Consider the following question:
– How far do you agree that state intervention was indispensable in contributing to the economic miracle of Taiwan.

Join our JC History Tuition to learn more about the rise of Asian Tiger economies. The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

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JC History Tuition Online - What happened during the Taiwan Straits Crises - Superpower relations with China

What happened during the Taiwan Straits Crises?

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Topic of Study [For H1 History Students]:
Section B: Essay Writing
Theme II: Cold War in Asia [1945-1991] – Superpower relations with China (1950-1979)

The First Taiwan Straits Crisis: A geopolitical contest
Following the Chinese Communist Party’s (CCP) victory over the Kuomintang (KMT) during the Chinese Civil War in 1949, the latter fled to Taiwan. The Taiwan Strait separated mainland China from Taiwan as the KMT formed the Republic of China (ROC).

Map depicting the Taiwan Strait that separated mainland China from Taiwan [Source: Ohio State University]

Quemoy (金门 or Kinmen) and Matsu (马祖) Islands were considered the first line of defence for Chiang Kai-shek’s ROC. Additionally, the United States offered to aid its newfound ally, the ROC, especially after its hostile interactions with Chinese troops during the Korean War.

Notably, US President Harry Truman delivered a rousing speech that reaffirmed the American commitment to its political alliances in East Asia, including Taiwan.

Accordingly I have ordered the 7th Fleet to prevent any attack on Formosa. As a corollary of this action I am calling upon the Chinese Government on Formosa to cease all air and sea operations against the mainland. The 7th Fleet will see that this is done. The determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan, or consideration by the United Nations.

An excerpt from a statement by the US President Harry Truman on Korea, 27 June 1950.

A Mutual Defense Treaty was signed with ROC to legitimise American military presence in the vicinity. Yet, such actions proved aggravating to Sino-American relations. In early September 1954, the PRC launched the bombardment of Quemoy and Matsu Islands. Chiang deployed about 100,000 troops to defend the two outermost islands, hoping that the American allies would come to their aid.

After the first crisis, the US Congress passed the “Formosa Resolution” that granted President Eisenhower the authority to defend Taiwan from communist aggression.

The Second Taiwan Straits Crisis: The Conflagration
During the Bandung Conference of 1955, Chinese Premier Zhou Enlai expressed desire to negotiate with the United States, possibly to de-escalate tensions and avert a full-scale military conflict with it. The olive branch offered by Zhou to the United States had earned much support and praise from the attendees at the Asian-African Conference in Indonesia.

By following the principles of mutual respect for sovereignty and territorial integrity, nonaggression, non-interference in each other’s internal affairs, equality and mutual benefit, the peaceful coexistence of countries with different social systems can be realized. When these principles are ensured of implementation, there is no reason why international disputes cannot be settled through negotiation.

An excerpt from Premier Zhou Enlai’s speech during the Asian-African Conference, 19 April 1955.

However, efforts to reduce tensions were negated by Eisenhower’s contemplated to use nuclear weapons on the PRC. On 23 August 1958, the Chinese leader Mao Zedong authorised the artillery bombardment of Quemoy Island. In retaliation, the ROC armed forces fought back.

Under the obligations of the American-Taiwan defense treaty of 1954, the United States offered military aid to the Nationalists. Increased American presence in the Taiwan Straits had alarmed the Soviet Union, such that Foreign Minister Andrei Gromyko visited Beijing to uncover the rationale behind Mao’s decision to attack Quemoy. Fortunately, the conflict did not escalate into a nuclear confrontation.

Chairman Mao said that the bombardment of Jinmen, frankly speaking, was our turn to create international tension for a purpose. We intended to teach the Americans a lesson. America had bullied us for many years, so now that we had a chance, why not give it a hard time?

… In our propaganda, however, we still need to condemn the Americans for causing tension in the Taiwan Straits. We did not put them in the wrong. The United States has several thousand troops stationed on Taiwan, plus two air force bases there. Their largest fleet, the Seventh Fleet, often cruises in the Taiwan Straits.

An excerpt from the “Inside Story of the Decision Making during the Shelling Jinmen” by Wu Lengxi

A thorn in the flesh: Prelude to the Sino-Soviet Split
On 6 October 1958, a ceasefire was made. Yet, the peace was short-lived as the PRC resumed its attacks on the two islands for nearly two decades until the late 1970s due to the Sino-American rapprochement.

Along the same vein, the Taiwan Straits Crises in the 1950s had impacted Sino-Soviet relations. On the surface, it appeared as if the signing of the Treaty of Friendship had proved to be fortuitous for Mao Zedong as he received Soviet military support to deter American attacks. Yet, the diverging perceptions by the two Communist leaders began to cause the gradual deterioration of bilateral relations. Partly, Khrushchev’s hesitance to antagonise the United States could be traced to his notion of “Peaceful Coexistence” that Mao could not agree with.

New evidence suggests that, on the contrary, the Soviet Union did everything it had promised to do in support of the Chinese operation, and that it was China, not the USSR, that was unwilling to follow through. This outcome explains why Khrushchev, feeling he had been burned once, was determined not to let it happen again. From then on he emphasized the need for a peaceful resolution of the Taiwan problem, a lesson that Mao was unwilling to draw, for fear it would expose the magnitude of his failure in the Quemoy crisis. These different views became a sore point in Sino-Soviet relations, as was evident during Khrushchev’s visit to Beijing in the autumn of 1959.

An excerpt from “The USSR Foreign Ministry’s appraisal of Sino-Soviet relations on the eve of the Split, September 1959” by Mark Kramer.

What can we learn from this article?
Consider the following question:
– Assess the view that the Taiwan conflict was the root cause of the Sino-Soviet split.

Join our JC History Tuition to analyse the significance of Taiwan and other related factors that shaped superpower relation with China. The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Online - When was Acer founded - Asian Tigers Notes

When was Acer founded?

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Topic of Study [For H2 History Students]: 
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan]

The Origins: MultiTech
In 1976, Stan Shih (施振榮) founded MultiTech with six others, including his wife Carolyn Yeh (葉紫華). The company began its journey as an Original Equipment Manufacturer (OEM) by producing video games and distributing electronic imports. In the 1980s, MultiTech expanded its production by involving Amex as its first international distributor.

Multitech… it’s not just another new computer company. It is a leading manufacturer in the computer age, and its Taiwan manufacturing facility is the largest for personal computers. Since 1976, Multitech has been a pioneer in microcomputer technology. Today its products are sold in more than 40 countries. Earning a world-wide reputation for consistent high-quality, Multitech products have captured the loyalty of large OEMs, VARs and distrubtors.

An excerpt from “Multitech – the computer family that carries many famous names” by PC Mag, 13 May 1986.

The Rising Star: Acer
In 1987, MultiTech was renamed to Acer, signifying its entry as a key player in the Personal Computer (PC) industry. Shih capitalised on the low labour costs in Taiwan to accelerate export production. By 1991, more than two-thirds of Acer’s sales were accrued from foreign markets. Although Acer sought to position itself as a full-line PC supplier, about a third of its sales was still derived from OEM in the mid-1990s.

In addition, Acer had the support from the Taiwan government to engage in a joint-project with Texas Instruments (TI) to produce semiconductors in the famed Hsinchu Science Park. Joint ventures proved advantageous as Acer acquired technology to broaden its scope of production and improve quality.

Because technological capabilities were seen as necessary core competence and proximity to sophisticated customers was important to building these capabilities, Acer invested abroad to be near these customers. Initially, Acer penetrated OECD markets in Europe and North America. By 1993, Acer had moved from assembling PCs in Taiwan and Malaysia and shipping to European and US customers to assembling abroad with strict quality standards.

… By 1995, Acer, with a market value of US$2 billion, began to split itself into 21 public companies, listed on stock exchanges around the world, to open the company to foreign investment.

An excerpt from “Multinationals and East Asian Integration” by Wendy Dobson & Chia Siow Yue.

What can we learn from this article?
Consider the following question:
– Assess the importance of government intervention in shaping the rise of Acer.

Join our JC History Tuition to learn more about private businesses in Taiwan as part of the Rise of Asian Tigers topic. The H2 and H1 History Tuition feature online discussion and writing practices to enhance your knowledge application skills. Get useful study notes and clarify your doubts on the subject with the tutor. You can also follow our Telegram Channel to get useful updates.

We have other JC tuition classes, such as JC Math Tuition and JC Chemistry Tuition. For Secondary Tuition, we provide Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition, Social Studies Tuition, Geography, History Tuition and Secondary Economics Tuition. For Primary Tuition, we have Primary English, Math and Science Tuition. Call 9658 5789 to find out more.

JC History Tuition Bishan Bedok Tampines Singapore - How did Taiwan become a successful export economy - JC History Essay Skills

How did Taiwan become a successful export economy?

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How did Taiwan become an economic power in Asia?  In continuation of the previous article pertaining to the contributing factors that led to the economic transformation of South Korea, we will now examine how Taiwan, also known as the ‘accidental nation’, achieved its economic success from the 1960s to the 1990s. Taiwan also undergone a process of rapid industrialisation, shifting its focus from domestic production to export-driven production that propelled the nation to its developed status.

Topic of Study [For H2 History Students]:  Paper 1: Understanding the Global Economy (1945-2000) Section B: Essay Writing Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan] 

In the following section, we will focus on four major roles that led to the economic miracle in Taiwan. Take note that these points are to be evaluated based on role and factor comparison, so as to improve your comprehension of these contributing roles to the economic development of Taiwan. For example, you should analyse the varying degrees of importance for government and private businesses in affecting the economic transformation of Taiwan.

1. Role of the Government a. Target Setting and Planning Taiwan began its planning phase with the establishment of the Council for United States Aid (CUSA) in 1948, which was later reformed as the Council for Economic Planning and Development (CEPD). The CEPD played the role as a government agency to draft plans and set targets for the economic development of Taiwan. As a planning body, the CEPD decided on the allocation of state resources for the growth of industries, such as the distribution of development funds.

b. Policy Implementation From the 1950s to 1960s, Taiwan’s economic policies were centred on the the implementation of the ‘import-substitution industrialisation’ (ISI) strategy, which focused on the protection of infant industries. For instance, the government introduced import restrictions on consumer goods to protect local firms from external competition. As a result, the agricultural sector flourished, contributing to the growth of the Taiwanese economy. However, the economic contribution of the agricultural sector was low in value. As such, the Taiwanese government shifted its focus to ‘export-oriented industrialisation’ (EOI), which emphasised on the production of exports in capital-intensive industries. The government oversaw this development by passing laws that reinforced export-based production, such as the Provisions for Export Zone in 1965. Consequently, the EOI strategy was met with great success, as evidenced by the domination of numerous exporting goods in the international markets by the 1980s. For example, Taiwan was known for its exports of motherboards and computer terminals as it occupied more than three-quarters of the global exports.

2. Role of the Private Businesses [i.e. SMEs] On the other hand, not only the public sector contributed to the economic transformation of Taiwan, but also the private counterpart, particularly the small and medium enterprises (SMEs). In contrast to South Korea, which is known for its few and massive chaebols that dominated the entire economy, Taiwan’s economic growth was driven by the existence of many SMEs. These SMEs played a crucial role in pursuing the goals set by the government, as observed by the large-scale production of exports. In the 1960s and 1970s, SMEs accompanied the government’s focus on EOI by producing standardised light-industry products. These goods were produced and sold at the international markets.

Over time, SMEs dominated the Taiwanese export production, accounting for nearly two-thirds of the entire country’s exports. Given that Taiwan’s economic developed hinged on export gains, this implied that SMEs became the key driver of the economy.

3. Role of Culture Although Taiwan had a stark difference in the role of private businesses as compared to South Korea, the cultural factor remained similar, in the sense that favourable cultural influences could explain the remarkable economic performance of Taiwan from the 1960s to 1990s. Taiwan was also shaped by Confucianism, which is a philosophy that encouraged diligence, frugality and respect for authority.

One of the notable consequences of such cultural traits is the emergence of SMEs. In this case, the Taiwanese people were entrepreneurial. Their willingness to innovate and battle against the odds was critical in supporting this significant development. As a result, many business owners possessed the business acumen to deal with economic uncertainties.

Furthermore, the relevance of frugality to economic development can be explained by the high savings rate, which means that many firms have sources of financing to conduct investment activities that propel economic growth even more. Therefore, cultural values were important in helping us to understand the vigour that drives these firms.

4. International Developments [i.e. Role of USA] The economic development of Taiwan was also supported by the role of USA, which increased its presence in Asia as a response to the perceived ideological threat of Communism. This response was carried out in the form of advancing economic progress by providing financial aid and other forms of support. For example, Taiwan was given exclusive access to American market and the privilege to impose trade protection temporarily. As such, USA occupied nearly two-fifths of Taiwan’s exports. From 1960s to 1970s, USA became Taiwan’s major export market, accounting for a large proportion of its economic growth.

Points to Ponder Now that you have looked into the four major roles that affected the economic transformation of Taiwan, do consider the following ideas to reinforce your study of this topic for essay writing: – How did the role of SMEs contribute to the economic miracle of Taiwan?  – In comparison between South Korea’s chaebols with Taiwan’s SMEs, analyse their approaches in supporting the economic development of these two Asian Tigers. [to be discussed in class]

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