Economic Policies in the 1960s

The primary objectives of Taiwan's economic policies in the 1960s were export promotion and encouragement of investment in labor-intensive industries. Assuming that unskilled labor comes mostly from relatively low-income families, we can thus identify labor-intensive, export-promoting economic policies as being crucial to the success of improved income distribution during rapid industrialization. This chapter explores economic policies for export promotion and encouragement of investment in the 1960s. In the early 1950s, economic policies favored import substitution. But as domestic markets became increasingly limited and the need for foreign exchange earnings grew urgent, new policies favoring export expansion were required. Policy changes were made in 1956 and 1960. An optimistic growth target of 8 percent for the period 1961 to 1964 was set in the Third Four-Year Plan, which also introduced the Nineteen-Point Economic Financial Reform.