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By Wang Yingying, Department of Macroeconomic Research, DRC

Research Report, Special Issue, No.12, 2017 (Total 1536) 2017-03-24

Abstract: With the accumulated internal driving factors and the intense external impact, Taiwan Province initiated economic transformation from the 1980s to 1990s. During this period, the Taiwan authority adopted macro-economic policies with salient characteristics for different stages. From 1972 to mid-1980s, the policy focused on the industrial policy for promoting the development of the information industry; from the mid-1980s to the beginning of 1990s, the policy centered on the reform relating to the establishment of an economic system with trade facilitation and an international and institutional environment; and from the beginning of 1990s to mid-1990s, the policy highlighted the continuous improvement of cross-strait economic and trade relations. By implementing these policies, the Taiwan economy realized a smooth transformation of the economy and the replacement of growth drivers. The experience of Taiwan’s transformation can be narrowed down to the following points. First, the key to successful transformation lay in grasping favorable opportunities and taking advantage of appropriate timing. Second, the relative independence of the central bank shored up the implementation of a prudent monetary policy. Third, the fundamental impetus to industrial transformation and upgrading came from the continuous enhancement of the investment environment and stimulation of market vitality.

Key words: economic transformation, industrial upgrading, cross-strait relations, reform, Taiwan Province