How did Taiwan’s international relation with the U.S. support economic growth to further industrialize the country?
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Through developing a stable, diplomatic relationship with the U.S. Taiwan was able to benefit immensely from their foreign aid and political support which in turn enhanced their economic growth leading to rapid industrialisation and the achieving of the “Taiwan Economic Miracle”.
Political Support
The U.S provided political support for Taiwan which not only strengthened their trade but allowed for national security.
Through a diplomatic and stable relationship with the U.S. , the Taiwan's Relations Act was signed by President Carter in 1979 which explained the U.S's intention to retain social, cultural and defensive relations with Taiwan. Consequently, Taiwan was allowed into the General Agreement on Tariffs and Trade, a multicultural agreement which regulated international trade. As it allowed for the reduction of tariffs and trade barriers Taiwan's trade was enhanced and they were able to trade more freely with China, Hong Kong, Japan and Singapore enabling increased economic growth. Furthermore through this same Act Taiwan faced many beneficial knock-on effects to their political recognition.
Firstly the U.S. then supported Taiwan in securing a seat in the United Nation rather than mainland China. Although this was changed post 1971, for the years before that it enabled them to gain political power and further industrialise their country. However, more importantly Taiwan was protected from “The Korean War” and had strong national security to protect and foster their industrialisation. This happened when President Truman reversed his previous hands-off policy on Taiwan and immediately ordered the U.S. Seventh Fleet to "prevent any attack on Formosa (Taiwan), when "The Korean War" began on the 25th of June 1950. Shortly thereafter, the U.S. commander of the Far East, General Douglas MacArthur, personally visited Taipei on 31 July 1950 and conferred with Chiang Kai-shek on the defense of Taiwan. And in May 1951, the United States established its official Military Assistance Advisory Group in Taiwan to train Chiang’s troopsas the U.S.’s role was to prevent attacks after President Truman reversed his policy on Taiwan. This lead to the effect of a Mutual Defense Treaty being signed that would allow Taiwan to be supported when in need of defense such as military groups by the United States.
Overall his shows how through a strong relationship with the United States Taiwan was provided with political support which enabled trade to be enhanced and protected them from communist attacks providing them with national security.
The U.S provided political support for Taiwan which not only strengthened their trade but allowed for national security.
Through a diplomatic and stable relationship with the U.S. , the Taiwan's Relations Act was signed by President Carter in 1979 which explained the U.S's intention to retain social, cultural and defensive relations with Taiwan. Consequently, Taiwan was allowed into the General Agreement on Tariffs and Trade, a multicultural agreement which regulated international trade. As it allowed for the reduction of tariffs and trade barriers Taiwan's trade was enhanced and they were able to trade more freely with China, Hong Kong, Japan and Singapore enabling increased economic growth. Furthermore through this same Act Taiwan faced many beneficial knock-on effects to their political recognition.
Firstly the U.S. then supported Taiwan in securing a seat in the United Nation rather than mainland China. Although this was changed post 1971, for the years before that it enabled them to gain political power and further industrialise their country. However, more importantly Taiwan was protected from “The Korean War” and had strong national security to protect and foster their industrialisation. This happened when President Truman reversed his previous hands-off policy on Taiwan and immediately ordered the U.S. Seventh Fleet to "prevent any attack on Formosa (Taiwan), when "The Korean War" began on the 25th of June 1950. Shortly thereafter, the U.S. commander of the Far East, General Douglas MacArthur, personally visited Taipei on 31 July 1950 and conferred with Chiang Kai-shek on the defense of Taiwan. And in May 1951, the United States established its official Military Assistance Advisory Group in Taiwan to train Chiang’s troopsas the U.S.’s role was to prevent attacks after President Truman reversed his policy on Taiwan. This lead to the effect of a Mutual Defense Treaty being signed that would allow Taiwan to be supported when in need of defense such as military groups by the United States.
Overall his shows how through a strong relationship with the United States Taiwan was provided with political support which enabled trade to be enhanced and protected them from communist attacks providing them with national security.
Foreign Aid
Firstly Taiwan had a strategy in utilising US aid that they focused on the overall improvement of infrastructure rather than on targeting certain narrow sectors of industry. This strategy proved to be effective in achieving balanced economic development in Taiwan. From 1946 to 1967, Taiwan received US economic aid of 1,768.3 million US dollars, and military aid of 2,384.2 million dollars. For comparison, Taiwan’s GDP was 308.2 million US dollars in 1951. One should never neglect the importance of the U.S's aid as it represented 30% of domestic investment each year in Taiwan and accounted for nearly 90% of the flow of external capital and donations.
Firstly this money was spent on improving industrial infrastructure, and enhancing manpower training. An example would be how Taiwan built a new international seaport at Wuchi near Taichung and a cross-island highway, while more than doubling the handling capacity of the three ports at Keelung, Kaohsiung and Hualien. Its electric power supply quintupled.
Secondly in the mid 1950’s the US’s government revised its China policy and reestablished its military partnership with Taiwan in order to stem the feared expansion of communism in Asia. Defense expenditures were already incredibly high in Taiwan so with further intensive defense spending in fear of attacks from Communist Asia, Taiwan would have largely suffered. Therefore it can be assumed without U.S. aid, budget deficit would have been difficult to reduce and hyperinflation would be a consistent problem. Foreign aid allowed for Taiwan to be economically supported throughout the entire process of industrialisation and the government therefore had a surplus to focus on enhancing their economy, not worrying about defines expenditures.
However, in conclusion the U.S. provided foreign aid for Taiwan which supports the idea that through a strong, stable international relation they were able to enhance their economy leading to the 'Taiwan Economic Miracle' and rapid industrialisation.
Firstly Taiwan had a strategy in utilising US aid that they focused on the overall improvement of infrastructure rather than on targeting certain narrow sectors of industry. This strategy proved to be effective in achieving balanced economic development in Taiwan. From 1946 to 1967, Taiwan received US economic aid of 1,768.3 million US dollars, and military aid of 2,384.2 million dollars. For comparison, Taiwan’s GDP was 308.2 million US dollars in 1951. One should never neglect the importance of the U.S's aid as it represented 30% of domestic investment each year in Taiwan and accounted for nearly 90% of the flow of external capital and donations.
Firstly this money was spent on improving industrial infrastructure, and enhancing manpower training. An example would be how Taiwan built a new international seaport at Wuchi near Taichung and a cross-island highway, while more than doubling the handling capacity of the three ports at Keelung, Kaohsiung and Hualien. Its electric power supply quintupled.
Secondly in the mid 1950’s the US’s government revised its China policy and reestablished its military partnership with Taiwan in order to stem the feared expansion of communism in Asia. Defense expenditures were already incredibly high in Taiwan so with further intensive defense spending in fear of attacks from Communist Asia, Taiwan would have largely suffered. Therefore it can be assumed without U.S. aid, budget deficit would have been difficult to reduce and hyperinflation would be a consistent problem. Foreign aid allowed for Taiwan to be economically supported throughout the entire process of industrialisation and the government therefore had a surplus to focus on enhancing their economy, not worrying about defines expenditures.
However, in conclusion the U.S. provided foreign aid for Taiwan which supports the idea that through a strong, stable international relation they were able to enhance their economy leading to the 'Taiwan Economic Miracle' and rapid industrialisation.