I would like to start by saying that after the military defeat of 1895, Taiwan would be ceded to Japan. It would again become Chinese after the end of WWII when the allied forces won the war. The communist victory in the country in 1945 contributed to the massive escape of Chinese from the mainland China to Taiwan. The country would have its own constitution which was written in 1946 for all china. Over the next 50 years, Taiwan instead of China would turn into the profitable capitalist economy. The island would prosper and be labeled one of the Asian tigers.
Currently, Taiwan is a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. The cooperation between large government-run banks and industrial export-oriented firms allowed the country to possess a highly competitive economy.
Exports were given the greatest consideration and therefore are currently responsible for the greatest cash inflow in the Taiwanese economy. Taiwan has a stable trade surplus, while the foreign reserves prove to be among the world’s largest. Agriculture accounts for only 3% of the total GDP, down from 50% in 1955. Taiwan currently is among the largest investors in southeastern Asia, while China is currently the largest export market for Taiwan. The USA ranks second largest market for Taiwanese products (Jain, 70).
