ABSTRACT
Japan's unexpected acquisition of Taiwan in 1895, following its victory over China, posed a substantial challenge to this newly emergent colonial power. In order to persuade capital to invest in Taiwan, the colonial state paved the way with extensive infrastructural investment. To explain the processes of the incorporation of Taiwan into Japan's capitalist economy, this chapter focuses on state participation in the creation of infrastructure for Taiwan's colonial development, the restructuring of the indigenous land tenure system, and the penetration of the rural economy by Japanese merchant and agroindustrial capital. It highlights the creation of a family-farming agriculture based on an institutional design that accommodated both the existing local land tenure system and modern ownership, as well as the promotion of commodity production in the colony, which was engendered by state policy and in turn formed the precondition for capital accumulation in (sugar) industry.
