Taiwan's miracle

WHEN Chiang Kai-shek led the remnants of his Chinese Nationalist Army, defeated by Mao Tse-tung's communists, to this island of Taiwan 40 years ago, he could hardly have foreseen the economic miracle his people would bring about, or the dramatic changes it is triggering today. Throughout most of their years on Taiwan, the Chinese Nationalists have maintained a rigidly hostile posture toward the Peking regime. Some have dreamed dreams of ousting the communists and reuniting China under a noncommunist flag.

As the communist regime has endured, the prospect of 20 million people on Taiwan recovering by force the vast Chinese mainland, with its more than a billion people, has turned from dream to myth. But if the Nationalist regime on Taiwan is not to rule all of China again, it has, in its years of ``exile,'' achieved an immensely impressive record of economic growth which has far outstripped that of the mainland.

This, combined with changing world circumstances, has brought Taiwan to the brink of probably the most drastic changes in its history. The changes include significant political reform at home, plus a confident new assertiveness abroad and a cautious review of its attitude toward the communist mainland.

When the Nationalists came to Taiwan they found an island about the size of the Netherlands, with little in the way of natural resources. Using the inherent energy of the Chinese and the native Taiwanese, and the stimulus of the free-enterprise system, they have transformed the face of the land. Thus the economy of little Taiwan is today 10 times as rich as that of the huge mainland.

Drive the length of Taiwan and you see a country bursting with energy and prosperity. Agricultural land is intensely and efficiently cultivated. The rest of the island's flatlands are dotted with factories and shipyards and steel mills. Rooftops have sprouted a metallic crop of TV antennas. Homes are replete with consumer goods like refrigerators and washing machines and VCRs. Bicycles, the workhorses of Asia, are rare. Motorcycles are everywhere, and cars clog the cities' streets. Stores are well stocked. Restaurants are full. Women's fashions are modern.

This is no struggling third-world country. This is one of the four Asian ``tigers'' (the others are South Korea, Hong Kong, and Singapore), the NICs (newly industrialized countries) that are chasing after Japan. The debate in Taiwan today is not about how to feed itself, but about the problems of pollution and whether to build yet another nuclear power plant.

Taiwan's economy is industrialized, and much of its prosperity has been built through massive exports, mainly to the United States. Taiwan has become the world's 12th-largest trader, and the fifth-largest trader with the US.

Visit the Tatung manufacturing company headquartered in Taipei and the president, W.S. Lin, walks you down the assembly line constructing computer monitors for IBM. The company turns out refrigerators and hi-fi equipment and exports hundreds of other items. When pressed about the scope of his operations, Mr. Lin talks modestly of the plants Tatung has established in California and Atlanta, England and Singapore. Though much of Taiwan's prosperity is built on the efforts of small-business men, it has also spawned international industrialists, so much so that Robin Leach has been in town filming some of them for his ``Rich and Famous'' TV show.

But the prosperity is widespread. Per capita GNP is about $5,000, high by Asian standards. Foreign-exchange reserves are more than $75 billion. This comfortable economic situation is the framework within which significant political and foreign policy changes are taking place, to be discussed in later columns.