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Taiwan’s political system
According to Chen (np), Taiwan has developed by using mercantilism which proposes the economy is inferior to politics. Economics is looked at as a way of escalating state power therefore national interest takes priority over the market place. Wealth and power are corresponding contending objectives and economic dependence on other states should be completely evaded.
Mercantilism believes that economic action is and should be subsidiary to the major goal which is to build a strong state. Economics is a political tool whereby ones state’s loss is another state’s gain. Recent mercantilist way of thinking has led to the successful development of East Asia states not excluding Taiwan.
Patterns of globalization
Arguably, Taiwan has adopted a transformationist pattern of globalization. From the 1970’s Taiwan in its efforts to escape from the colonial divisions of labor and forge economic development, it majorly emulated Japan. It adopted an export-oriented industrializing approach, carving out markets for itself in the world economy. Furthermore, Taiwan’s nation state has been evolving, especially political democratization, with the state been a catalyzer.
The winners and losers in Taiwan can be represented through the NIE perspective.
Taiwan contends that globalization is the vital driving force following main economic, cultural, social political changes in the population of the world today. The new world order “architecture” is advancing looking at the general outcome of directly intertwined activities leading to change in various fields for example, technology, governance, communication just to mention but a few (Castles 24).
Global cities and competitive advantage of Nations
According to Kwok (163), Taipei, the capital city and the largest city in Taiwan has become one of the global cities through the production of high technology and its components. In reference to China Economic News Service, Taiwan is now one of the creditors of economy, which holds one of the world’s largest foreign exchange reserves.
The GDP per capita in Taipei is US$48,400 making it the second highest in Asia following Tokyo and 13th among world cities.
Taipei holds the industrial area of Taiwan, which holds both secondary and tertiary sectors. This shows that not only is Taiwan a developed nation but its capital city is one of the global cities in the world today showing that Taiwan is not only developed as country but also its cities are developed as well (Castles (24).
Taiwan products can not enjoy monopoly rent although they have a huge market share this is because competition ion Taiwan itself is quite stiff and the fact that there are other cheaper goods flooding the markets from foreign countries makes the situation worse.
Most Taiwan industries belong to individual families and efficiently thoroughly supervised, hence there is no motivation as both the owner and manager are like minded and their thoughts and goals are the same. This most certainly why, Taiwan firms and industries have been enabled to act in response and fine tune fast to the ever changing competitive advantage (Fitzgerald 104).
Taiwan and non-polarity
According to Chen, Taiwan’s liberal foreign policy is an effort by the country to fine tune itself to the age of non-polarity. Taiwan’s cessation from China and its overdependence on the United States of America had a huge negative impact on it. This largely affected its GDP dropping form 5.7% in 1999 to -2.17%in 2001; with the help of the United States of America crisis in 2007 Taiwan’s GDP was at 4.13%. Taiwan needs to make sociable relations with other countries so as it can continue to grow economically. At the moment, Taiwan is pushing for “bilateral free trade agreements (FTA) with particular nations that make up the ASEAN (Association of Southeast Asian Nations).
Economy of Taiwan
The relations between the state and the corporations in the country can be described as collective capitalism, which was first developed in Japan after the Second World War.
Looking at the Taiwanese economy, real process of the capitalist socialization of production is evident though in an unclear means because it does not take into consideration the seminal reality that the rights to the means of production are privatized are held by the capitalist companies, unlike in market-oriented capitalism where it belongs to individual capitalists. The economy embraces free competition and monopolistic private enterprise. There is collective labor of many employees in large companies and the correlation of various stages and sector of production.
The Taiwanese economy is driven by “relational markets,” which put much emphasis on the cooperative long-term engagements. For instance, in the intertwined share rights, where majority of the organizations hold rights in other firms; as seen this has resulted in a lot of collaboration between the concerned firms, since each is concerned of the other’s activities.
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Taiwan’s geopolitics of energy
The country has considerable natural resource, for instance coal, petroleum and natural gas deposits. Taiwan’s energy generation is approximately 55 percent coal-based, 18 percent nuclear power, 17 percent natural gas, 5 percent oil, and 5 percent from renewable energy resources.
However, due of the extensive exploitation all through from Taiwan’s pre-modern to its modern time, its natural resources have been almost depleted. “Nearly all oil and gas for transportation and power needs must be imported, making Taiwan particularly sensitive to fluctuations in energy prices” (Munck 45).
Due to this, Taiwanese Executive Yuan intends to increase power generated from renewable sources to 10 percent by 2010, doubling it from the current 5 percent. Through encouraging renewable energy, “Taiwanese hope to also aid the nascent renewable energy manufacturing industry, and develop it into an export market.
Taiwan is rich in wind energy resources, with Wind farms both onshore and offshore, though limited land area favors offshore wind resources. Solar energy is also a potential resource to some extent” (Munck 47). This energy situation in Taiwan has attracted American and German corporations, which have constructed numerous wind farms.
Furthermore, much of its forest resources, were greatly exploited during Japan’s regime rule for the building of temples, though efforts have been made to recover then. Nowadays, forests do not contribute significantly to timber production largely due to production and environmental concerns. Many industries have been subsequently shut down due to depletion of the scarce natural resources and also due to the down fall of international market demands.
Taiwan’s domestic politics believe that outsourcing is a key pillar towards its financial recovery and to take advantage of its strategic positioning in global production.
It has continuously supported outsourcing though incentives, such as taxation, and marketing its outsourcing industry. Notably, the country has been able to solve the puzzle of economic development considering its emerging economy and its global standing.
Castles, Stephen. “Development, Social transformation and globalization.” Centre for Asia Pacific Social Transformation Studies workshop 23-25 June 1999. 1999. Web.
Chen, Jin. “Taiwan Pursuing Free Trade Pacts with ASEAN states.” Taiwan News. 14 Oct 2008. Web.
Fitzgerald, Scott. The competitive Advantages of Far Eastern Business. New York: Routledge, 1994. Print.
Kwok, Yin-Wang. Globalizing Taipei: the political economy of spatial development. New York: Routledge, 2005. Print.
Munck, Ronaldo. Globalization and social exclusion: a transformationalist perspective. Bloomfield CT: Kumarian Press, 2005. Print.