After three decades of impressive growth driven by export-oriented industrialisation, the Taiwanese economy encountered a turning point in the early 1990s. While a sharp appreciation of New Taiwan dollars (NTD) and an accelerated rise in wage rates triggered the relocation of labour-intensive manufacturing activities to Mainland China and elsewhere, the new capitalintensive service sectors expanded remarkably and began to support the economy of the island. In contrast to the former industries in which small and medium-sized enterprises played a central role as exporters, major investors in such growing service sectors as the financial and telecommunications industries were family-owned and -managed conglomerates. These business groups made a move into the service sectors in response to the emergence of newly opened markets created by the deregulation policies of the Taiwanese government that started in the late 1980s. The policy changes induced a new form of competition among major economic groups, and eventually led to a new stage in their diversification.