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Taiwan's Economic Development: The Impact of Government Policies


One of the most important policies that has driven Taiwan’s economic development is its focus on export-oriented industrialization. As Professor Jang Show-ling, a former Minister of Economic Affairs in Taiwan, explains, “Taiwan’s economy has been driven by export-oriented industrialization since the 1960s, when the government encouraged the development of labor-intensive industries such as textiles, toys, and electronics.” This policy was based on the idea that Taiwan could use its relatively low labor costs and skilled workforce to compete in the global marketplace.

To support this policy, the Taiwanese government implemented a range of measures, including subsidies for export-oriented industries, investment in infrastructure, and the establishment of export processing zones. As Dr. Hsiao-Yun Chu, an expert on Taiwanese economic development, notes, “The government has played a key role in providing the necessary infrastructure and support to encourage the growth of export-oriented industries.” These policies have been successful in promoting economic growth, and today Taiwan is a major exporter of electronics, machinery, and other high-tech goods.

Education and Human Capital

Another important policy that has supported Taiwan’s economic development is its emphasis on education and human capital. As Dr. Chun-Yi Lee, a senior lecturer in politics and international relations, notes, “The Taiwanese government has invested heavily in education, which has helped to develop a skilled workforce and promote innovation.” Taiwan has a high literacy rate and a well-educated workforce, which has been critical in supporting the growth of its high-tech industries.

In addition, the Taiwanese government has implemented policies to promote entrepreneurship and small business development. As Dr. Yu-Shan Wu, an expert on Taiwan’s economic policy, explains, “The government has implemented a range of measures to support entrepreneurship, including tax incentives, business incubators, and financial support for startups.” This has helped to foster a culture of innovation and entrepreneurship, and has contributed to the growth of small and medium-sized enterprises in Taiwan.

However, government policies in Taiwan have also faced criticism. For example, some have argued that the government’s focus on export-oriented industrialization has led to a lack of diversification in the Taiwanese economy. As Dr. Jui-Chung Allen Chiu, an expert on Taiwanese economic policy, notes, “Taiwan’s heavy reliance on exports makes it vulnerable to external shocks, such as changes in global demand or trade tensions between major economies.” Some have called for the government to focus more on developing domestic demand and supporting the growth of service industries.


In conclusion, government policies have played an important role in Taiwan’s economic development. Policies such as export-oriented industrialization, investment in education and human capital, and support for entrepreneurship have helped to promote economic growth and innovation. However, there are also challenges and criticisms of government policies, such as the need to diversify the economy and reduce reliance on exports. As Taiwan continues to navigate the challenges and opportunities of the global economy, the role of government policies will remain a key factor in shaping its economic future


Jang Show-ling. (2001). Taiwan’s Economic Development and Lessons. Institute of Political Science, Academia Sinica.

Chu, Hsiao-Yun. (2009). The Politics of Export-Oriented Industrialization in Taiwan, 1952-1988. PhD Dissertation, University of Wisconsin-Madison.

Lee, Chun-Yi. (2018). The Political Economy of Taiwan’s Development: Inertia and Change. Palgrave Macmillan.

Wu, Yu-Shan. (2016). Taiwan’s Economic Transformation: Leadership, Policy Challenges and Prospects. Edward Elgar Publishing.

Chiu, Jui-Chung Allen. (2015). Taiwan’s Export Dependence: Challenges and Prospects. Brookings Institution.