Preface

　When future historians review the history of Asia during the second half of the twentieth century, the rapid economic growth in Taiwan definitely will be considered an important historical event. However, in the current English literature on Taiwan, there has been very little documentation of the individuals that orchestrated such a phenomenal economic growth. Consequently, although there is abundant information on the economic policies that promoted the economic growth, we know little about the ideas, concerns, and struggles of the actors behind these policies. This is undoubtedly an unfortunate gap.

　Among the chief economic policy-makers in Taiwan in the second half of the twentieth century, K. T. Li probably has the most authoritative personal review of the historic events. K. T. Li joined the Nationalists' state enterprises in China and Taiwan in the 1940s. Starting in 1953, he served the government in various positions, as a member of the Industrial Development Commission, Vice-Chairman of the Council for the US Aid, Vice-Chairman of the Council for International Cooperation and Development, Minister of Economic Affairs, Minister of Finance and Minister without Portfolio. Until he retired in 1988, Li was in the inner circle of economic policy-making in Taiwan for 35 years.

　In January 1992, I had an opportunity to interview K. T. Li, then the Senior Advisor to the President of Taiwan, for an oral history project. Originally, I planned to write solely based on the interviews, but I soon realized that K. T. Li had collected massive amount of data about his life and career and that many individuals and institutions also possess precious materials about K. T. Li and Taiwan's economic development. Following some discussions, we soon reached the agreement that, instead of writing an oral history, I would write a history of Taiwan's economic development from K. T. Li's personal point of view. The purpose was not only to understand K. T. Li's personal experience and career, but also the process of economic policy-making in Taiwan from 1953 to 1988. Thanks to K. T. Li's generosity and patience, I was able to pursue successfully this alternative plan. The project, that took 20 months to finish, involved extensive interviews with K. T. Li himself from January 1992 to September 1993, as well as research at 6 institutions and interviews of 9 individuals in Taiwan. K. T. Li read the Chinese manuscript and supervised its publication in Taipei in 1993.

　The English translation had K. T. Li's endorsement, but it was not finished in time for his review before his death in May 2001. In addition to translating, I updated materials when it is necessary. I added a new introduction chapter in which I discussed American advisors, K. Y. Yin (K. T. Li's predecessor) and K. T. Li's arguments and policies for economic growth and their impacts on Taiwan's development. I also compared Taiwan's economic reform with that in China and Russia. It should be noted that, since K. T. Li did not have a chance to read the chapter, this introduction reflects primarily my views.

　It is important to put Taiwan's economic growth in perspective. Taiwan's economy is in transition. In the year of 2001, the economy registered the first negative growth rate and the highest unemployment rate since 1952. While many attributed the cause of the downturn to the worldwide recession, it is also clear that, unlike the past decades when Li was active, Taiwan is no longer able to weather through the storms of world recessions with continuous economic growth. Taiwan in the year of 2001, of course, is different from Taiwan in 1952. However, if anything is to be learned from the story of economic growth as told by K. T. Li, it is definitely a lesson about openness to world trade, favorable social environment, and a persistent campaign that constantly upgraded Taiwan's dynamic comparative advantage in the world market.

　First, Taiwan's economic growth depended upon open trade. If Taiwan had the wisdom to survive the international isolation and establish broad cultural and economic ties with more than 100 countries without their diplomatic recognition, perhaps similar wisdom and creativity can be used to take advantage of China's market without being threatened politically. Second, the economic growth of Taiwan was a social movement. From the savings movement in the 1960s, to the rise of numerous small and medium enterprises since the 1970s, to technology upgrade in the 1980s, the wealth of the nation was the priority of the regime and had its unwavering attention. This priority must be preserved even with the increasing emphasis on consumption, environmental protection and social welfare. Third, as China develops its economy at a rapid pace, it is clear that, Taiwan must campaign to make itself competitive again. Taiwan not only needs to succeed where K. T. Li had succeeded, as in the area of electronics, it also needs to succeed where K. T. Li had not been able to succeed, such as in the area of biotechnology.

　Wherever information other than interviews with K. T. Li was used, the source of the information is identified in the notes. Unless otherwise noted, the material came from K. T. Li himself.