A. Problems and Developmental Strategies
---Because of severe inflation and the weak economic foundation present at the beginning of the fifties, the priority of economic development was to raise agricultural and industrial output so as to generate an adequate supply of goods and stabilize commodity prices.
---Import-replacement light industries were successively established and flourished in the fifties. Because of the success of the import-replacement strategy, agricultural output jumped and the problem of price inflation was largely alleviated. While employment opportunities were increasing, unemployment was still a serious problem.
---Because markets for many products were approaching saturation by the end of the fifties, the government sought to ease the limitations that the small size of the domestic market had placed on the development of industry by adopting an export-oriented trade policy and moving from passive import restrictions towards active expansion of exports.
---In order to improve the investment environment, encourage investors, and expand foreign markets, at the end of the fifties the government instituted trade and foreign exchange reforms, carried out nineteen financial and economic reforms, and promulgated the "Statute for Providing Investment Incentives."
B. Economic Development Plans
---The "First Four-Year Taiwan, R.O.C., Economic Development Plan" (1953-'56) was implemented. It contained the following focal areas:
1. Increasing agricultural output.
2. Promoting economic stability.
3. Improving Taiwan's international balance of trade.
---The "Second Four-Year Taiwan, R.O.C., Economic Development Plan" (1957-'60) was implemented. It contained the following focal areas:
1. Increasing agricultural output.
2. Accelerating the development of industry and mining.
3. Expanding export trade.
4. Increasing employment opportunities.
5. Improving the international balance of trade.
C. Industries
1. Agriculture:
---Leasing of public land was implemented in 1951; the "Land to the Tiller" program was instituted in 1953.
---A program of exchanging grain for fertilizer was instituted in 1960.
---Cash crops introduced from overseas included mushrooms, asparagus, and improved varieties of bananas and pineapples.
---The development of a food processing industry helped earn foreign exchange.
2. Industry:
---Measures taken to nurture and protect domestic industries included the development of import-replacement industries (labor-intensive light industries), and the adoption of high tariffs, import controls, and restrictions on establishing plants.
---The announcement and implementation of the "Regulations Governing Exchange of Fuel Tax Waivers for Exports" (1955) and the "Export Trade Reform Program" (1958) actively encouraged exports.
---Taiwan's first industrial district the Liutu Industrial District was established in 1960.
D. Finance and Banking
1. Finance:
---The implementation of the "Statute Governing Investment by Foreign Individuals" (1954) and "Statute Governing Investment by Returning Overseas Chinese" (1955) served to promote investment by foreigners and overseas Chinese.
---A consolidated income tax was instituted in 1955.
---The "Statute Concerning the Unified Auditing of Central and Local Taxes and Levies in Taiwan Province" was implemented.
---The "Ten Measures to Reduce Outlays and Balance Revenue and Expenditures" was implemented.
---The "Export Product Tax Refund Regulations" was implemented.
---The National Property Bureau was established and took over the duties of the Land Bank of Taiwan's public property management department.
---The "Revenue and Expenditure Apportionment Law" was enacted.
---The implementation of the "Statue for Encouraging Investment" in 1960 improved the investment environment and promoted economic development.
2. Banking
---American economic aid began in 1951.
---The promulgation of the "Regulations Governing the Management of Securities Firms in Taiwan Province" laid a foundation for the development of the securities market.
---The promulgation of the "Foreign Exchange and Trade Improvement Program" in 1958 reduced diversity of exchange rates to dual exchange rates.
---The implementation of the "Nineteen-Point Finance and Economic Reform Program" in 1959 accelerated economic development.
---The establishment of the Securities Management Committee in 1960 created a unit dedicated to overseeing the issue of securities.
---The system of foreign exchange controls and multiple exchange rates achieved the goal of promoting exports and restricting imports, and thus maintained the nation's balance of trade.
E. Trade
---The government's implementation of multiple exchange rates, strict control of foreign exchange, and institution of tariff barriers and import controls at the beginning of the fifties served to restrict imports, made the most effective use of limited foreign exchange, and protected fledgling industries.
---Tax rebates for exports were instituted in 1956.
F. Manpower
---The active establishment of junior high schools, vocational and regular high schools, and vocational colleges helped to broadly raise citizens' levels of education.
---The promulgation of the "Guidelines for the Retirement of Workers in Taiwan Province Factories" in 1951 laid out conditions for retirement and standards for pensions.
---The National School of the Arts and Taichung Provincial Normal School were both upgraded to junior colleges.
G. Social Welfare
---The establishment of the Adopted Daughter Protection Committee in 1951 helped reduce the abuse or sale of adopted daughters.
---The establishment of the "Executive Yuan Employment Committee for Discharged Soldiers" in 1954 and the "Taiwan Provincial Citizens' Employment Counselling Centers" in 1956 provided counselling tasks relating to job-seeking and occupational training to discharged soldiers and ordinary citizens respectively.
---The implementation of fishermen's insurance (1951), sugarcane growers' insurance, and civil servants' insurance (1958) helped lay the foundation for the development of social insurance.