Appendix: Economic Development of the Republic of China on Taiwan

Economic development in Taiwan over the past four decades has been characterized by rapid growth, export expansion, stable prices, full employment, and fairly equitable income distribution. In the natural course of its development, the economy underwent significant long-term changes in terms of production, trade, and employment. Although the two oil crises of the 1970s had short-term impacts on price movements and growth rates, Taiwan recovered from the crises quickly, and the economy was promptly brought back on track. Since the beginning of the 1970s, Taiwan has experienced a massive export surplus, a high saving rate, low tax rates, a sound government budget, and an increase in real wage rates. The essential long-term characteristics of the Taiwan economy are given in table A. 1. The main features of its performance in the period since 1950 are outlined in the following sections.