Taiwan’s Open Economy in the Twenty-First Century

Abstract

In recent years, the performance of market economies in the Pacific area has increasingly attracted the attention of businessmen, economists, and policy-makers in the West. This has happened largely as a result of their very rapid development. Japan, long accepted as a ”club member” of OECD, led the list but has been followed by four Asian NICs (newly industrializing countries)—the Republic of Korea or South Korea, the Republic of China on Taiwan, the Republic of Singapore and the British colony (until 1997) of Hong Kong. (Malaysia now appears to be the next candidate to join the NIC ranks.) In 1985, Taiwan’s merchandise exports amounted to US$30,500 million. The four Asian NICs together accounted for $114,000 million of exports, roughly equivalent to 6.3 percent of world exports (7.2 percent including Malaysia) [9]. In terms of export value, the four NICs collectively were thus equivalent to sixty-five percent of another Japan and more important than the United Kingdom. Their collective importance as buyers of imports from other countries, at $107,200 million, was equivalent to 82.2 percent of Japan (91.6 percent if Malaysia is included), and exceeding the U.K.’s imports by a sizable margin. Obviously, if the same countries can continue to grow economically at rates above the average for all those of the upper-middle-income group in the community of nations, as they have done so far, their weight in world trade and global capital flows will be quite considerable.