Geography Reference
In-Depth Information
it does not follow the dependency logic, of deciding that outside influence is bad
and therefore trying to isolate the country from such influence.
The types of industry were somewhat different from South Korea, with much
light industry. Few large firms were brought into being, contrasting with the
South Korean conglomerates such as Hyundai and Samsung, and Taiwanese
industry was mostly composed of many small firms, independent of one another
and competing fiercely. Up to 1963, most industries were oriented to the
domestic market; a few low-skill industries had exports in this early period,
notably in the sector of textiles, and in the manufacture of electric fans and
fluorescent tubes. A key sector in the 1960s then became plastics and plastic
products, together with electronics. As earlier in Japan, these industries were
built up with little investment in research and development, using established
technologies which were acquired or used directly by foreign firms in Taiwan.
Those industries that developed in Taiwan were especially suited to small firms,
and in this respect there is a contrast with South Korea. Small firms were partly
the result of a special integration of farming with industry in Taiwan, notably the
long build-up of small mills processing rice, sugar, and other newer crops made
important in the 1950s, such as cotton, fruit and vegetables. Most of farming family
income, in the 1980s, came from non-farm employment, as farmers became
micro-industrialists. In the rural areas, many small enterprises were set up, some
on the industrial estates, providing all farmers with alternative employment. This
kind of development linked well with the light industry orientation, as the
factories could be located anywhere (Scitovsky 1990). A dispersed, rural spread
is a feature of some Taiwanese industry. The importance of small firms also
relates to the immigrant population which came from mainland China after the
Second World War, including many entrepreneurs, and to tax breaks which
favoured the establishment of small industries in the first five years.
The automobile industry
A single Taiwanese industry may be used to illustrate the differences from South
Korea's model of development. This is the car manufacturing industry, which
presents perhaps an extreme example, but none the less illustrates a point.
Comparing South Korea and Taiwan, the latter was the first country to start
car manufacture, with an assembly plant under licence from Nissan in Japan set
up as early as 1958. South Korea followed this in 1962 with another plant under
licence from Nissan. The first difference between the two was South Korea's
total prohibition on imported cars, compared with Taiwan's import tariff which
allowed some imports. In the late 1960s, both South Korea and Taiwan allowed
other competing firms to establish assembly plants in a similar fashion. By 1970,
both countries were in a similar position; they each had a domestic market of
under 15,000 units, so that the domestic markets would never prove a long-term
commercial proposition (Chu 1994). In the 1970s, South Korea set up a special
long-term plan for the car industry, designating or targeting specific firms to
