KDI 한국개발연구원 - 경제정책정보 - 발간처별 목록 - 국외 경제사회연구원 - IIE - How economic ideas led to Taiwan’s shift to export promotion in the 1950s

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How economic ideas led to Taiwan’s shift to export promotion in the 1950s

PIIE 2021.09.02
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Taiwan was the first developing country to adopt an export-oriented trade strategy after World War II. The factors usually associated with big shifts in policy―a macroeconomic crisis, a change in political power or institutions, lobbying by export interests, pressure from international financial institutions―were not present; it was ideas that were key. In 1954, economist S. C. Tsiang proposed that Taiwan boost export earnings rather than squeeze import spending to deal with its chronic shortage of foreign exchange. He recommended a currency devaluation to establish a realistic exchange rate and a market-based system of foreign exchange allocation to end the inefficient rationing by the government. Four years later, a policymaker, K. Y. Yin, fought for the adoption of Tsiang’s proposal, helping clear the way for Taiwan’s phenomenal growth in trade.

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