The Study On The Upgrade Of Manufacturing Industrial Structure In Taiwan

This thesis analyzes the major stages in Taiwan's economic development by reviewing its course in the last 60 years. It centers on how the authorities and the enterprises in Taiwan, faced with the ever changing social-economic environment both externally and internally, have taken active measures to integrate available resources and to constantly enhance its productivity, which led to the transformation of its economy from one that was dominated by agriculture into one that was dominated in turn by import substitution industries, export-oriented industries, second-round import and export substitution industries and the current high-tech industry in development.Several economic theories are applied in this thesis in the quest to identify the boosters behind the transformation of Taiwan's manufacturing industry and to pinpoint some deficiencies at different major stages of Taiwan's economic development. Among them are: Kaname Akamatsu's Flying Geese Paradigm, Vernon's Theory of the Product Cycle, the Theory of International Division of Industry, Porter's Theory of Stages of Economic Development, etc.The author holds that Taiwan's economic miracle was largely attributable to its active participation in international division of industry where it took advantage of the industrial restructuring made by the United States, and more importantly, by Japan, timely introduced industrial policies compatible with its economic development, fully utilized its advantages of the late comer and its resource endowment in establishing its own industries and enhancing its manufacturing industrial structure. With the growth of its economy, Taiwan's international division of industry with the developed countries shifted gradually from the earlier division among different industries to the current division within one industry. Now Taiwan encounters unprecedented challenges in bringing its manufacturing industrial structure to a higher level. For lack of competitive competency, some industries such as the labor-intensive and capital-intensive industries, have now been re-located to mainland China or Southeastern Asian nations, leaving a vacuum that the new industries have yet to fill. On top of that, in seeking for more votes, Lee Teng-hui and Chen Shui-bian advocated Taiwan independence, politicizing and idiologizing economic issues. As a result of their maneuvers, the economy in Taiwan is at the verge of "hollowing out of the industries"and marginalization. To drag itself out of the economic predicament now, Taiwan must encourage innovation through high-tech development, upgrade its industrial structures and foster the growth of new competitive industries. For the good of its people, it is also urgent for Taiwan to become part of the"Greater China Economic Circle'"and fuse into the regional economic integration process.