Geography Reference
In-Depth Information
become the producers of vehicles and limiting the entry of others. It gave several
different kinds of aid to exporters, and pushed production to allow exports from
1977. In Taiwan, by contrast, there was no targeting of firms, and large volumes
of imports were also allowed, in some years in the 1970s making up 40 per cent
of the market. Competition was strong, but this restricted the ambitions of firms
that feared the entry of more competitors undermining their own position.
In the 1980s, the South Korean industry achieved nationalization, as the firms,
in joint ventures with foreign firms (Asia with Fiat, Hyundai with Ford, Kia with
Mazda) took over the dominant control of the Korean operations. In Taiwan, no
such nationalization took place, and the industry failed to move forward as in
South Korea, remaining at the level of assembly of imports. Tariffs on imports
have been a political issue from the 1980s, with consumers asking for
reductions, and this has made for reluctance on the part of large MNCS to become
involved. South Korea maintained its prohibition on imports up to 1986, and then
gradually opened the market to imports, although these are still a tiny proportion
of the market.
The South Korean path is more interventionist, and has been more successful
in the medium term. It has been possible partly because of the lower level of
democracy in the country, and the lack of any opposition to strong policies.
Spatial structure
There was no precise regional strategy, but the concentration of all development
was in the west of Taiwan where the densely peopled rice lands and the cities are
located. Since 1963 there have been over 70 industrial estates developed in this
rural area. Some were intended to use local resources. Others had the main
purpose of checking out-migration to the three major urban concentrations:
Taipei with its port of Keelung in the north, Taichung in the centre west, and
Tainan-Kaohsiung in the south. Large export processing zones were set up, two
near Kaohsiung where most heavy industry such as shipbuilding was located,
and one in the Taichung region. The main centre of light industry is Taipei. The
whole island was provided with adequate infrastructure, including adequate
electric power supplies in all areas, roads, airports, and urban services. The
success of the industrial estates is disputed, since other rural areas without these
estates also did well in the building industry. In another parallel with South
Korea, there was some decentralization from the main centres, but it tended to go
only to nearby satellite centres. In the whole development period, there has been
a more than proportional growth of manufacturing industry in the main city,
Taipei. But all the big cities, Taichung, Tainan, Kaohsiung and Keelung, have
had rapid growth of industry in their suburban areas.
For the future, evolution of the economy towards high technology and towards
services is already happening, as rapid economic development means that cheap
labour is no longer available. This means that the factories in sectors like
textiles, or any labour-intensive industry, are moved out of the island by
