Abstract
Taiwan, the Republic of China (“Taiwan”) is one of the foremost economic success stories of the past thirty years. Numerous statistics attest to Taiwan’s remarkable economic development. As a newly industrialized country, its gross national product (GNP) is now roughly the twentieth largest in the world. Its per capita income has grown from only US$196 in 1952 to over US$8,000 today. Its foreign exchange reserves, valued at over US$90 billion and rising, are the largest in the world. In short, Taiwan has emerged as one of the powerhouse economies of the Pacific Rim.
Following a trail first blazed in Asia by Japan, Taiwan’s economic growth was based primarily on export-oriented manufacturing. Over the past thirty years, products manufactured in Taiwan, ranging from T- shirts to electronics, have carved out a significant share of global markets. The development of Taiwan’s financial system, however, did not keep pace with the island’s industrial development. Until quite recently, Taiwan’s financial markets were over-regulated and virtually closed to foreign participation.