Industrial Development Conflicts in Modern Developmental State: Taiwan taken as an Example

Abstract

The rapid growth of Taiwan’s economy was contributed to manufacturing and a specific economic development model, developmental state strategy, in the later 20th century. As a developmental state, the government has high state autonomy; its decision-making organizations are composed by professional technocrats; the policy decision put a priority on economic development to facilitate rapid industrialization with positive interventions. In addition, government will subsidize strategic industries and provide the preferential loans for enterprises to promote the development of the emerging industries [1]. Shi-jie [2] also generalized three main features of developmental state. First, government highly intervenes markets and establishes the dedicated agencies (such as Ministry of International Trade and Industry in Japan, National Development Council in Taiwan, Economic Development Board in Singapore, etc.) to formulate developing strategies to lead the economic development [3]. Second, government adopts flexible industrial policies to support the strategic industries with various subsidies and safeguards. Third, government implements land reform with clear social policies, maintains social and economic equality to prevent serious political conflicts. The features mentioned above could be found in Taiwan’s government as well, it was centralized and dominated industrial development to accumulate great wealth for Taiwan in a short time. In 1949, the Republic of China government withdrew to Taiwan, first invested in light industry to supply domestic demand market, and then turned to export after 1960. Since 1972, the gross production of heavy industry was finally equal to light industry; Taiwan transformed into an industrialized society afterward Shu-Yuan [4]. However, under the impacts of international political situation and economic environment in the early 1970s, Taiwan’s government implemented “Ten Major Construction Projects” to strengthen infrastructures in terms of transportation, heavy industry and energy development to improve economy.