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Einzziilgl . 7 {in ; .iftifitttét {I r. if. $A3Kr1 i‘i?!’ 335‘\!\i\\))fi .11.) (l‘hi1irfi..4tli\..vdl7.fia\hif\ J... a. ‘ , . :1» U1 \nfliibilsat’ugfiabst‘lfit .Itotl I’ll. 113.0. o ’5. t- .04 .. . ..I 3.1.92.1; . 1.1% l: 1.)). 1.34.. I} (3.1); i I I‘liyl... . .2 6i .i 4 .11) 1 | ,Einntill‘ii; Elixkv . (31." .i‘i} .01.}. i111!§:i)0 a!:a\k.)a\!4¢.3n.xlllm11tvius\idnntlz . . \ .ald . . .. . . . 1..§\1§.i§v§§ . . . ....!.l..l¢41l.‘ .3341}..()z.61.1{w.11w|31511. 4...!!! 112...... . _ . u L. . . I .1. .|.5 . .31: E119 K ‘9'). .‘iflit ill}. :1. 1......134 n4 this r v 711;“... : IE4. é‘é li-..9l.:\,.s!. LIBRARY Michigan State University lllllllllllllllllllllllllll THESIC This is to certify that the thesis entitled THE CHANGING ROLE OF POLITICAL CONDITIONS IN THE ECONOMIC DEVELOPMENT OF TWO CHINESE REGIONS: HAI-NAN AND T'AI—WAN, 1895-1975 presented by Donald Leonard Batkins has been accepted towards fulfillment of the requirements for Ph.D. degree in Geography in“ W Major professor /‘-—. [kfie__:Xg:Lik_;L£2r_lji.7? 0-7639 OVERDUE FINES ARE 25¢ pER DAY PER ITEM Return to book drop to remove this checkout from your record. .L I;}¢:‘ ‘éfirf'23wff7 @ww 3; 4;) l’ 3H5“? 9.55;: ‘ ' ‘N’ 10'" m- 8006080 BATKINS, DONALD LEONARD THE CHANGING ROLE OF POLITICAL CONDITIONS IN THE ECONOMIC DEVELOPMENT OF TWO CHINESE REGIONS: HAI~NAN AND T'AI-WAN, 1895-1975 Michigan State University PH.D. 1979 University Microfi | ms I n te rn ati O n al 300 N. Zeeb Road, Ann Arbor, MI 48106 18 Bedford Row, London WC1R 43, England Copyrig ht 1979 by BATKINS, DONALD LEONARD All Rights Reserved (D Copyright by Donald Leonard Batkins 1979 THE CHANGING ROLE OF POLITICAL CONDITIONS IN THE ECONOMIC DEVELOPMENT OF TWO CHINESE REGIONS: HAI—NAN AND T'AI—WAN, 1895—1975 By Donald Leonard Batkins A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Geography 1979 ABSTRACT THE CHANGING ROLE OF POLITICAL CONDITIONS IN THE ECONOMIC DEVELOPMENT OF Two CHINESE REGIONS: HAI—NAN AND T'AI—WAN, 1895—1975 By Donald Leonard Batkins The purpose of this study was to determine why two similar geo— graphical regions experienced different economic conditions. A review of development theory revealed that social and political variables are con— sidered the most important factors in determining a region's economic growth. Since the Study selected two regions with similar cultural backgrounds, this research focused on the effects of political conditions on development. It was hypothesized that political conditions, as re— flected in development policies and administration of government, are the major factors in changing a region's development pattern. Hai—nan and T'ai—wan, two Chinese islands with very similar geo— graphical and cultural features, were selected as study sites. The study covers the years 1895 to 1975, a period when both islands experienced a variety of political and economic conditions. Data collected from a wide range of sources were analyzed by use of the comparative method which, in this research, organizes data into a geographical matrix. This organization and classification system greatly simplifies and strengthens the research by providing a framework from which to analyze the data. Donald Leonard Batkins The data showed that Hai—nan experienced little development during the years 1895—1939 and 1945—1949, and that Hai—nan's economy expanded during the years 1939—1945 and 1949—1975. During each of these periods Hai-nan's economy was based on the exploitation of natural resources. The island's meager industry was also primarily focused on the processing of natural resources. It was clear from the data that while the level of Hai—nan's economy changed over the years, the development pattern was much the same throughout the study period. T'ai—wan, like Hai—nan, experienced several years with little growth (1945—1949), and two periods of considerable development (1895—1945 and 1949—1975). Unlike Hai—nan, T'ai—wan's economy did not follow the same trends throughout the study period. Before 1949, the island's economy was based on the exploitation of natural resources, especially agricultural, but after 1949 the economy continued to shift toward manufacturing. Un- like Hai—nan, both the pattern and level of T'ai—wan's economy changed over the study years. Analysis of the data clearly showed that policies and administration of government led to changes in development levels and patterns on the islands. Thus the hypothesis was accepted. While the degree to which government was involved in economic matters was tied to ideology, this alone did not explain certain major changes in economic policies. For example, it did not appear that the economic policies followed on T'ai—wan after the mid—1960's were based on Sun Yat—sen's ideology. However, all policies reviewed in this study produced development, provided that they were properly carried out (i.e. administered). Thus, effective and efficient administration appears to be a major prerequisite for development regardless of ideology. The analysis further suggests that, for T'ai—wan, Donald Leonard Batkins it was a change in the situational characteristics brought about by ' rather than ideology, which caused a major shift in "independence,' that government's economic policies. This study reinforces development theory (e.g. Fairbank, Eckstein, and Yang) which contends that political variables are important factors in economic development. It appears desirable, however, to further examine the impact which changing situational variables have on development. Geographers have a major role to play in this area since most, if not all, situational variables have spatial characteristics and are thus geo— graphical phenomena. To Linda PREFACE This study was a result of discussion between myself and my adviser, Jack Williams. Professor Williams suggested that since I had an interest in regional development and China, an analysis of development on T'ai—wan and Hai—nan since 1895 would be a natural choice of topic. The challenge was to find sufficient data on Hai—nan, a region little studied in the West, so as to adequately analyze its economy. There was already considerable data about T'ai—wan's economy available. At times the search was frustrating; statistical datawereoften unavailable and descriptive data were difficult to locate. Nevertheless, perserverance and a lot of hard work finally brought this study to a successful conclusion. The help of Dr. Ian Marley, who acted as committee chairperson while Jack Williams was in T'ai—wan, was indispensible. My other committee members, Dr.'s Walter Gourlay and Lawrence Sommers were also most helpful, especially in the final stages of the dissertation. The unnamed members of the Interlibrary Loan staff at Michigan State University (MSU) Library, who so efficiently processed my many loan requesta.deserve special praise. New materials are constantly being published, and researchers know that they must draw a line someplace. Unfortunately, my limit preceded the publication of a major work on T'ai—wan's economic history, Samuel P. S. Ho's book, Economic Development of T'ai—wan, 1860—1970, (Yale University Press, 1978). For those who desire a more detailed review of certain aspects of T'ai—wan's development (in particular, the U.S. aid period and its effect on T'ai—wan's growth), Dr. Ho's book is well worth consulting. Finally, I wish to thank my wife, Linda, who put up with me when things did not go well. She never gave up hope that this project would eventually end successfully. ii TABLE OF CONTENTS Page PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . v LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . vi LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . vii Chapter I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . l The Research Base Statement of the Problem The Hypothesis The Study Site Methodology The Comparative Method Organization of the Study II. A REVIEW OF CONDITIONS ON HAI—NAN and T'AI—WAN PRIOR TO 1895 . . . . . . . . . . . . . . . . . . . . . . . 23 Introduction Physical Characteristics of the Islands The Overview of Hai—nan Hai—nan's Economy Hai—nan: Trade and Communications Social and Political Conditions on Hai—nan The Overview of T'ai—wan T'ai—wan's Economy T'ai—wan: Trade and Communications Social and Political Conditions on T'ai—wan Summary III. T'AI—WAN'S CHANGING POLITICAL AND ECONOMIC CONDITIONS, 1895—1975 . . . . . . . . . . . . . . . . . . . . . . . . . 58 Introduction The Colonial Period, 1895—1945 Economic Trends Under the Japanese The Policies and Administration of Successful Colonialization iii The Post—World War II Years, 1945—1945 The Post—War Economy Policies and Administration After the War "Independent” T'ai—wan, 1949—1975 A New Economic Life for the Island New Policies for a New Situation Summary IV. HAI—NAN'S CHANGING POLITICAL AND ECONOMIC CONDITIONS, 1895—1975 . . . . . . . . . . . . . . . . . . . . . . . . . 96 Introduction The Disruptive Years: A Period of General Strife, 1895—1939 Economic Trends A Lack of Policies and Poor Administration The Second Sino—Japanese War, 1939—1945 Economic Trends Under the Japanese Wartime Policies and Administration Civil War Disruption, 1945—1950 Economic Conditions Civil War Policies and Administration Hai—nan and the New China, 1950—1975 A New Economic Era, 1950—1975 New Policies and Administration Summary V. SUMMARY AND CONCLUSION . . . . . . . . . . . . . . . . . . 139 BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 GENERAL REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . 162 iv LIST OF TABLES Table Page 1. Principal Exports of Hai—nan for the Years 1894 and 1895 . . . 32 2. Hai-nan Balance of Trade, 1892-1895 . . . . . . . . . . . . . 32 3. Hai—nan Exports: Fisheries Items, 1894 and 1895 . . . . . . . 36 4. Hai—nan Exports: Manufacturing Items, 1894 and 1895 . . . . . 36 5. Principal Imports to Hai-nan for the Years, 1894 and 1895 . . 42 6. Principal Exports From T'ai—wan for the Years 1894 and 1895 . 44 7. T'ai—wan Exports: Fisheries Items, 1894 and 1895 . . . . . . . 47 8. T'ai—wan Exports: Manufacturing Items, 1894 and 1895 . . . . . 47 9. Principal Imports to T'ai—wan for the Years 1894 and 1895 . . 49 10. Cross Value of Production Recorded for ”Industry” in T'ai—wan T'ai-wan, by Line of Product. 1921-1942 . . . . . . . . . . . 62 11. T'ai—wan: Gross Recorded Value of A11 Principal Types of Production, 1915—1942 . . . . . . . 63 12. Value of Exports From T'ai—wan by Place of Destination, 1899—1942 . . . . . . . . . . . . . . . . . . . . . . . . . . 69 13. T'ai—wan: Volume of Major Exports, 1939,1950,1951,and 1953 . . 71 14. T'ai—wan: Average Output of Rice, 1939—1950 . . . . . . . . . 71 15. T'ai—wan: Industrial Production Index, 1937—1955 . . . . . . . 74 16. T'ai—wan's Exports to the Chinese Mainland, 1937—1942 and 1946—1948 . . . . . . . . . . . . . . . . . . . . . 74 17. T'ai—wan: Principal Industrial Products, 1974 . . . . . . . . 84 18. Destination of Hai—nan's Exports . . . . . . . . . . . . . . . 102 LIST OF FIGURES Figure Page 1. East Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2. A Comparative Analysis Matrix for Political and Economic Variables . . . . . . . . . . . . . . . . . . . . . . 15 3. Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . 18 4. Hai—nan, Generalized Relief . . . . . . . . . . . . . . . . . . 26 5. T'ai—wan, Generalized Relief . . . . . . . . . . . . . . . . . 28 6. T'ai-wan . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 7. Hai—nan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 8. Hai—nan: Exports of Pigs, 1895—1940 . . . . . . . . . . . . . 99 9. Hai—nan: Exports of Sugar, 1895~1940 . . . . . . . . . . . . . 99 10. Development Periods . . . . . . . . . . . . . . . . . . . . . . 140 11. T'ai—wan: Political and Economic Comparative Matrix . . . . . 141 12. Hai—nan: Political and Economic Comparative Matrix . . . . . . 142 vi CNA JPRS NCRRS SCMP SPRCP LIST OF ABBREVIATIONS Chinese News Analysis Joint Publications Research Service News from Chinese Regional Radio Stations Survey of China Mainland Magazines Survey of China Mainland Press Survey of Peoples Republic of China Press CHAPTER I. INTRODUCTION The world is divided into numerous economic systems. At the extreme macro level socialism and capitalism are two such systems. While the spatial dimensions of these economic systems vary depending on the level of generalization, most political states, and there— fore geographical regions, have an economic system which is identi— fiable with either capitalist or socialist economic principles. However, economic systems are not the only economic phenomena which have a geographical dimension. Regional economic development is by definition a geographical phenomena. Since the term "region" means a geographical area defined by the same criteria, "regional economic development" therefore simply means that the criteria used is economic development. The major underlying fact about regional development is that the world is not made up of areas which have similar levels of economic development. While it is easy to understand why there is little agriculture in the Sahara Desert and why no one grows cotton commercially in northeastern Minnesota, it is difficult to come to grips with the question of why similarly endowed regions have such different development patterns and, conversely, why dissimilar regions can have similar developmental patterns. 2 The Research Base Traditionally the natural resources base has been used to explain developmental differences, but more recently researchers (e.g. Ginsburg, Schultz, and Adler), have downplayed the determin— istic effect of resources in development theory.1 Ginsburg, for example, claims that resources are important and give a region a developmental advantage although they possess no deterministic value. Additionally, he feels that resources need not necessarily be found in a region, but that they must be easily accessible for growth to take palce. In Adler's argument, resources are co— determinants which speed economic development by permitting the expansion of exports, thus causing infusions of capital. A good example of this in the current world is the oil exporting nations. Along the same line, Schultz points out that in a relative sense resources decline in importance as development increases. Ginsburg contends that resources need not be located in a given region for them to influence the region's development. Perloff and Wingo's work uses the same logic while presenting the theory that ”relative economic growth of a region is directly related to its relative advantage in the production of goods and services for the national market: these may result from resource endowment on the one hand, or from a favorable degree of access to the national markets on the other——more generally from a combination of the two.”2 In this case relative advantage of a region means that it has some combination of efficient transportation, cheap or skilled labor, low taxes, and other goods that other regions lack. Once a region has an advantage over others, it is easy to understand why it would also have more development. This concept of regional advantage is used to explain develop— mental differences between regions. As Schultz points out, natural resources decline in importance as a region's economy grows, however, according to Myrdal, the region is able to maintain its develop- mental advantage over time since development carries with it a cumulative effect.3 This results in a condition where development improves regional advantage, which increases development, which in turn improves regional advantage. While regional advantage appears important in explaining development, it does not answer all the questions. For example, how is Japan's recent development explained, or China's relative lack of it during the late nineteenth and early twentieth centuries? It appears that in part Japan had a regional advantage which could ex— plain its development. In a world economy, Japan's ability to use ocean transportation was certainly advantageous. However, in the area of natural resources, Japan was woefully lacking. Even though Japan had access to such resources by use of ocean transportation, these costs reduced her regional advantage. Moreover, the theory of cumulative effect should have worked against Japanese development since many European states were well ahead of Japan in the nineteenth century, but today the opposite is true. China's case is different and much more complicated. Here a large nation—state with numerous regions containing large amounts of natural resources experienced little development. Even those regions which theoretically had a regional advantage in a national economy experienced little or no development. 4 Up to now few, if any, social—political variables have been cited in development theory. The apparent limitations of theory which does not consider these inputs has spawned considerable research seeking to define theory which contains numerous social and political variables. For example, Hagen claims that economic growth is the result of an "accelerating cumulation of scientific and technical knowledge" and the accumulation of this knowledge is a result of social variables.4 He states that early scientific or technical advances occur more or less randomly and that the growth of such knowledge and its cumulative effect is quite slow. But he goes on to say that at some point a social group, not necessarily in government, works to remove the barriers to acceptance of these new ideas. Kristensen also stresses the value of technical knowledge but stops short of Hagen's broad generalizations about the influence of social factors on the evolution of technology.5 By accepting the idea that social groups promote development, directly as Hagen claims, or indirectly, as Kristensen does, the question arises as to the role of the state. This is especially true in places where the state controls social activity, but it is also a concern in societies where the state reflects society. William Lockwood's study of Japan looks at the relationships between develop— ment, the state, and social groups.6 While he claims that the real drive and momentum for the development of Japan lay outside of state activity, it nevertheless set a ”favorable psychic milieu."-7 His arguments are less than convincing since he points out that it was the state which opened the country to new ideas, and spurred initiative by building transportation and communication systems. Obviously while the Japanese state was not socialist it was nevertheless involved 5 in development, though it certainly was influenced by social groups promoting Japan's development. All the research cited up to now has dealt with development in a positive sense. Those factors inhibiting development have only been implied. Thus it is important to cite Fairbank, Eckstein, and Yang's claim that it was the political arrangements in China which hindered that country's modernization during the late nineteenth and early twentieth centuries. The authors maintain that the "Chinese state failed to provide certain minimum pre-conditions essential to economic growth outside of the treaty ports."8 For example they cite the fact that government in China during these years was unable to provide peace and order, a unified monetary standard, stable administration, and a uniform system of weights, among other things. Additionally, only a minimal system of education, transportation, and communication was maintained. The authors maintain that in not providing these minimum necessities the Chinese government was a major hindrance to development. Statement of the Problem Based on the cited research, there are two major areas of theory about regional development. The first centers on regional advantage, which in turn focuses on natural resources and regional location. The second revolves around various social and political conditions ex— isting in a region. A review of the literature clearly indicates that social and political theories about regional development are more widely accepted today than are those which ignore social and political conditions. That is not to say that ideas about regional advantage have been abandoned, -1 rather, these theories now encompass social and political factors. Since social and political variables are so important to development theory it is necessary to better understand how they influence development. Lockwood's study of Japan showed how social and political variables were interrelated to each other and Japanese development. Similarly, in the case of China, Fairbank, Eckstein and Yang point out that social conditions were reflected in the Chinese government's inability to provide necessary leadership, while in both cases political conditions reflected certain social attitudes which either aided or hindered development. The important point is that political conditions were directly related to development. By accepting the theoretical premise that political conditions are reflected in development, one is confronted with a number of questions. For example, if political conditions change, will development change; do similar types of political conditions spawn like development; and do political conditions influence regional advantage? Theoretically, if political conditions are reflected in development, then as they change through time, so too should development. In a sense Lockwood's study reflects this idea since the government of Meiji Japan differed from that of the Tokagawa; however, it was not a major premise of the study. The same is even more true with the work of Fairbank, Eckstein, and Yang, since they never discussed the post—1911 years in China, and thus did not deal with the Nationalist or Communist periods which saw major political change. Therefore, it seems that a study which looks at changing political conditions and their effect on development would provide useful input into development theory. The Hypothesis . I Since theory predicts that changing political conditions will affect a region's development and may influence regional advantage, it is therefore necessary to construct a hypothesis, select a study site, and then test the hypothesis. One problem is how to measure political conditions. From a practical point of view, it seems that political conditions are reflected in the development policies and administration of government. An example of such a situation is when political conditions in China were directly reflected in govern— mental policies of the Great Leap Forward, which in turn had such a major impact on Chinese development. By definition a socialist govern— ment's policies would naturally have an impact on development, but based on the Japanese example it appears that the policies of a non— socialist government can also have a tremendous impact on development. Therefore, it is hypothesized that political conditions, as reflected in development policies and administration of government, are the major factors in changing a region's development patterns. The Study Site The logical place to test the hypothesis is a region which has experienced a wide range of political conditions and has had varying development patterns. There are a great many such sites in the world, especially in Africa and Asia. By selecting sites which are not only similarly endowed but which have also experienced similar as well as differing political conditions, the study can not only de— termine whether changes in political conditions are a major factor in changing a region's development patterns, but it can also determine whether analogous political conditions produce comparable economic development in two similar regions. Two regions which fit this study's requirements are the Chinese islands of Hai—nan and T‘ai—wan. These islands not only have very similar physical and cultural characteristics, but prior to 1895, they also experienced analogous political con- ditions. However, after that date, and right up to the present time, both islands have experienced differing political and economic situations. Thus these two islands make ideal sites for the study. Methodology Hai—nan and T'ai-wan were selected as study sites and the data for the research was gathered from a wide range of sources. Information about T'ai—wan was readily available, since that island's development history has been well documented and there is considerable published data regarding more recent events. A sample of the sources consulted for information on T'ai—wan includes Davidson's comprehensive survey of the island done at the beginning of the Japanese period, Barclay's book on the colonial years, Lin's research on the post-war times, and T'ai—wan's Sixth Four Year Plan. These and similar sources provided the basic data from which T'ai—wan'seconomic and political geography of the past 80 years was analyzed. Data on Hai—nan was more difficult to acquire, since there is little published research about the island. However, there is a considerable amount of information available from a wide range of sources which, when assembled in one place, provides a good overview of Hai—nan's economic and political geography. For example, for the years 1895 to 1941, the Chinese Maritime Customs reports provide both statistical and other information. This period of time also produced [5 o EAST ASIA f X e d . ; e ‘ “’ K v- ,')‘ Q .6 \ v 5 \ 0 I00 zoo 300 we KILOMETERS } . / Ying-l'oul k ‘ ’ \ 0/954 \ . Tc-lion I "8‘ ‘i/ POI-chino - wanna YELLQW 55A 9 \ . T'ion—chino cn'ino-No 0 D (36 \ I a Q. d ‘,;’ Nan-chino a C ' Shane-hm E '2 fl 3 SUM/r . Fu—chou ‘11) 1) Z ,9 s3 6. A, A Q q L J> _ 0“ Shun don. q/ Kuanc -Ch°“ A (canton) onq- Konfi \ / Ix“ \ ’ // \\9° EAST ASIA Figure 1. 10 a number of articles about Hai—nan which are of value in determining conditions on the island. American intelligence and consular sources provide the bulk of the data for the more recent period. While T'ai-wan's source material contains considerable amounts of statistical data, that on Hai—nan is very incomplete. For example, the Chinese Maritime Customs reports for the years 1895 to 1933 contain a mass of statistical information about Hai—nan's exports and imports. However, after 1933, little statistical information about Hai-nan can be found. Because of the lack of consistent statistical material for both islands a statistical analysis cannot be used in this research. As the collection of data continued it became clear that a certain amount of generalization and interpretation was necessary and that a macro level analysis was appropriate for this study. Handling the data at the regional level rather than at the hsien or lower level results in certain detail being lost, but since the study is concerned with the relationship of political change to development and since each island has experienced the same political conditions throughout its area, a regional level analysis is deemed sufficient. The Comparative Method This study deals with two regions and the relationship of political change to development over the past 80 years. Such a study is comparative in nature and, as Hartshorne points out, such an approach is not new to geography.9 Hartshorne briefly describes how the comparative method is used in regional geography but his discussion does not provide information on how to incorporate time into the method.10 The method as used in this context allows one to m N H _-_. ll compare two or more regions, or several parts of a single region, to each other during a set time period. But because change over time is a major part of this study, a simple comparison of the two islands' present political and economic geographies will not suffice. Since the present is a direct result of the culmination of past political and economic situations, the comparative method as out— lined by Hartshorne is not entirely suitable for this study, rather it is necessary to include an historical analysis of development trends. Hartshorne's explanation of the comparative method in historical geography allows the researcher to better understand relationships between historical events and geographical distributions.ll In this context, the technique, as described, requires that the researcher "geographies" of it for several focus on a single region and construct time periods which are then compared. Since this study deals with two regions, the technique as used by historical geographers will not work here. Unfortunately, neither of these explanations provides a proper methodological and organizational framework upon which to proceed with this study. Therefore, a search was undertaken to find a methodology, comparative in nature, which would fit the needs of this study. On the surface, such a search seemed easy for geographical literature abounds with comparative work. However, as soon as a review of the literature got underway, it became apparent that the task was more difficult than anticipated. For example, Murphey's book on India and China is comparative, but nowhere in it does he . 12 describe the methodology he followed, and the same holds true for . . . 13 an earlier work he did on western Chinese Cities. Lowenthal's 12 study of four American cities is titled as a comparative analysis.14 While he goes to great lengths to justify his study and analyzes his data, he spends no time describing his methodology. Along the same lines, King's study of urban growth patterns in Ontario and Quebec, while not comparative in title, was comparative in fact.15 Although he says ”there remains a great deal to be learned about the comparative structure of these provincial urban systems," he never claims that he is following a comparative methodology.l6 Other examples include Proudfoot's study of Britain and the United States in the Caribbean,17 Lewthwaite's study on Wisconsin and Waikato dairying,18 Ward's comparison of streetcar suburbs of Boston and Leeds,19 Hoffman's study of Romania, Yugoslavia, and Greece,20 and Barbour's article on north and south Sudan.21 All of these works have one thing in common——they all compare and they all neglect to mention a comparative methodology. More importantly, none of the authors ever defines or justifies the methodology used for the study. Since the comparative method has received such widespread use, even though it has not been well described by those using it, it must have some basic methodological underpinnings. However, a review of geographical methodological literature gives little insight into the comparative method. Recent books on methodology by Amedeo and Golledge,22 Chisholm,23 Minshull,24 and Harvey25 contain no reference to the comparative method. Daly26 refers to doing things comparatively, but does not mention a comparative methodology. Beaujeu—Garnier defines the comparative method as " a system for classification and explanation of spatially dispersed phenomena of the same order (cuesta relief, textile industries, urban regions, transcontinental railway l3 networks . . .)" but she never expands beyond that definition.27 Similarly, Mikesell says that "the aim of comparative studies is to build a foundation for generalization that extends beyond the par— ticular conditions found in a given area at a given time,” but he 28 In fact there appears to be too does not describe how the method works. no recent geographical source, except Hartshorne, which both defines and explicitly describes the comparative method. While it appears that geographers may not have written much in this area, writers in other disciplines have published materials 29 and dealing with the comparative method. For example, Eckstein Prybyla30 have both edited books on comparison in economics, while Holt and Turner,31 Ashford,32 and Scarrow33 have produced similar works in political science. In sociology and anthropology, one can find works by Nadel34 and Murdock35 which deal with the topic of compar— ative analysis. No matter which of these sources one consults, there is a considerable similarity between them. First, the bulk of the sources deal with the problems encountered in the classification of systems. Classification is important, since no matter what the discipline, comparative analysis depends on the classification of things into groups, with the resultant groups being used in a com— parative analysis. The second similarity between the reviewed sources is that they never present a design for a framework upon which to do the comparative analysis. The texts implied that given a good classifi— cation system, the analysis would, by default, be good. Perhaps the reason for this lack of an analysis framework is that frequently a quantitative analysis is implied for the comparison and thus the authors find no need to explain any further. However, none of the 14 sources rule out descriptive comparative analysis, they just neglect to provide an outline for such a methodology. One source comes close to providing the necessary framework for a descriptive comparative analysis. An article by Apter36 on the comparative method in the study of politics graphically presents an idea on stratification of data which results in a matrix. While Apter's interest focuses on sociological studies of politics, his ideas about organization relate very closely to those presented by Berry.37 Berry's conceptualization of a geographic matrix is designed to help isolate regional characteristics, but it also could be used in comparative analysis. First the matrix provides a classification scheme, a major prerequisite of comparative studies. But the matrix also forms a convenient organizational framework for analysis, since once the data is classified into cells one can easily compare the information in one cell to that in another cell of the same type. Figure 2 presents this idea as it would apply to a regional historical study of a comparative nature, which deals with the systemic topic of regional development. For this study material about the islands of T'ai—wan and Hai—nan has been divided into a number of time periods, similar to those shown in Figure 2. Likewise, the economic, social, and political data have also been classified to fit the logic of the matrix. Since the study focuses on changing economic and political conditions, it is necessary to establish a base point from which both economic and political change can be measured. The base point for this study is the political and economic geography of Hai-nan and T'ai—wan in 1895. Then for each island the eighty years following 1895 are divided into I'llllllll mmqumel; OHZOZOom Qz< AHHo040mo. zmzso 3 5 #583552 w I N E582. M menisci”: 3:: 0200mm 5m: o_._.m_mm._.o>H ZOEmE mmmIH 205mm 16 periods of time which correspond to political situations. In T'ai—wan's case this produces four and in Hai—nan's case, five separate periods for analysis. These analysis periods are then handled in the following fashion: the base point (1895) becomes the starting place, or a place from which all things can be measured. This then allows for a sequential description of all political and economic deviations which occurred after the zero point. The same base point was not used to analyze all the study's periods, it was only used for the first period with each succeeding period be— coming the base line for the following period. By using this technique the political and economic geography for each period Can be constructed and analysis of the relationships between political changes and economic development based on changes from the previous period is possible. Because the political situations on each island did not coincide, each island was analyzed separately. However, that analysis was not sufficient to make a decision about the hypothesis. Therefore, a final section compares periods with similar political or economic conditions with the intention of isolating political conditions which are basic for certain types of development. The hypothesis is that similar political conditions should produce analogous economic develop— ment in the two islands. It is also believed that this approach better separates developmental tactics from policies, thereby providing more insight into what determines development patterns. This is important since it appears that differing tactics can produce similar development providing that analogous geographical conditions exist. 17 Organization of the Study As was shown in the previous discussion, Hai—nan and T'ai-wan make suitable sites for this study. Because of their similarities the complexity of the analysis is greatly reduced, while the few differences, if anything, enhance the analysis. For example, the fact that both islands experienced the rule of the same political systems and governments, although at different times, allows for a more complete analysis of the hypothesis. All that has been said up to this point refers to an analysis over time and this requires that the study be assigned a specific time frame. 1895 was chosen as the date to commence analysis as it marks the year T'ai—wan ceased to be a part of the Chinese Empire and became a colony of the Empire of Japan. From that date T'ai—wan and Hai—nan no longer had a sequential commonality of government. The study thus begins with the year 1895 and ends in the mid 1970's. The study is divided into five chapters. The first is the Introduction. Chapter 11 provides the control point and describes the state of development on the islands in 1895. Chapters III and IV are concerned with analyzing the development of Hai—nan and T'ai—wan after 1895. Each of these chapters is subdivided into historical time periods which coincide with major political events. The chapter on T'ai—wan is divided into three subsections: (1) the Japanese occupation; (2) the years immediately after the second Sino—Japanese War; and (3) the period after 1949, when T'ai—wan became the Republic of China. The chapter on Hai—nan is divided into four sub—sections: (l) the first covers the last years of the Chinese Empire and includes the period from the end of the Ch'ing Dynasty (1911) to the start 18 TIME PERIODS HAI-NAN T'AI-WAN I895 . IMPERIAL CHINA COLONY |9II WARLORD of PERIOD '927 JAPAN NATIONALIST CHINA I939 JAPANESE OCCUPAHON I945 ovu_WAR POST-WAR .950 I949 PEOPLES WNDEPENOENT“ REPUBUC of T'AI-WAN cmNA I975 Figure 3. TIME PERIODS 19 of the second Sine—Japanese War (1939); (2) and (3) cover the years of the Japanese occupation and return of Hai—nan to the Republic of China after the war, and the final period (4) covers the years since 1950. Chapter V is the Summary and Conclusion. 20 Notes — Chapter I lNorton Ginsburg, "Natural Resources and Economic Development," Annals of the Association of American Geographers, 47 (September, 1957), pp. 197—212; Theodore W. Schultz, "Connections Between Natural Resources and Economic Growth," Natural Resources and Economic Growth. Edited by J. J. Spengler (Washington, D.C.: Resources for the Future, 1961); John H. Adler, "Changes in the Role of Resources at Different Stages of Economic Development,‘I Natural Resources and Economic Growth. Edited by J. J. Spengler (Washington, D.C.: Resources for the Future, 1961). 2Harvey S. Perloff and Lowdon Wingo, Jr., "Natural Resource Endowment and Regional Economic Growth," Natural Resources and Economic Growth. Edited by J. J. Spengler (Washington, D.C.: Resources for the Future, 1961), p. 212. 3Gunnar Myrdal, Economic Theory and Under—Developed Regions (London: Gerald Duckworth and Co. Ltd., 1957). 4Everett E. Hagen, On the Theory of Social Change: How Economic Growth Begins (Homewood: The Dorsey Press, Inc., 1962), p. 12. 5Thorkil Kristensen, Development in Rich and Poor Countries: A General Theory with Statistical Analysis (New York: Praeger, 1974). 6William W. Lockwood, The Economic Development of Japan (Prince— ton: Princeton University Press, 1968). 71bid., p. 574. 8John King Fairbank, A. Eckstein, and L. S. Yang, "Economic Change in Early Modern China: An Analytic Framework." Economic Develop— ment and Cultural Change, 9 (October, 1960), 1—26. 9Richard Hartshorne, The Nature of Geography (Lancaster: Association of American Geographers, 1939), p. 447. 101bid., pp. 447—448. llIbid., pp. 184—188. 12Rhoads Murphey, The Outsiders: The Western Experience in India and China (Ann Arbor: The University of Michigan Press, 1977). 21 l3Rhoads Murphey, ”The City as a Center of Change: Western Europe and China," Annals of the Association of American Geographers, 44 (December, 1954), 349—362. 14David Lowenthal, Environmental Assessment: A Comparative Analysis of Four Cities (New York: American Geographical Society, 1972). 15Leslie J. King, ”Discriminatory Analysis of Urban Growth Patterns in Ontario and Quebec, 1951—1961,” Annals of the Association of American Geographers, 57 (September, 1967), 566—579. lerid., 566. 17Mary Proudfoot, Britain and the United States in the Caribbean: A Comparative Study in Methods of Development (London: Faber and Faber Limited, 1954). 18Gordon Lewthwaite, "Wisconsin and the Waikato: A Comparison of Dairy Farming in the United States and New Zealand," Annals of the Association of American Geographers, 54 (March, 1964), 59—88. 19David Ward, "A Comparative Historical Geography of Street— car Suburbs in Boston, Massachusetts and Leeds, England: 1850—1920," Annals of the Association of American Geographers, 54 (December, 1964), 477—490. 20George W. Hoffman, "The Problem of the Underdeveloped Regions in Southeast Europe: A Comparative Analysis of Romania, Yugoslavia, and Greece," Annals of the Association of American Geographers, 57 (December, 1967), 637—667.’ 21K. M. Barbour, "North and South in Sudan, A Study in Human Contrasts," Annals of the Association of American Geographers, 54 (June, 1964), 209—227. 22Douglas Amedeo and Reginald G. Golledge, An Introduction to Scientific Reasoning in Geography (New York: John Wiley and Sons, Inc., 1975). 23Michael Chisholm, Human Geoggaphy: Evolution or Revolution? (Baltimore: Penguin Books, Inc., 1975). 24Roger Minshull, Regional Geography, Theory and Practice (Chicago: Aldine Publishing Co., 1967). 25David Harvey, Explanation in Geography (New York: St. Martin's Press, 1969). IIIIIIIIIIiIIiIIIIIIIIIIIIIIIIIIIIIIlllElElEll=======:::::::::::::::__ ' 22 26M. T. Daly, Techniques and Concepts in Geography (Melbourne: Thomas Nelson Limited, 1972). 27J. Beaujeu—Garnier, Methods and Perspectives in Geography (London: Longman, 1976), p. 25. 28Marvin W. Mikesell, "Comparative Studies in Frontier History," Annals of the Association of American Geographers, 50 (March, 1960), 62-74. 29Alexander Eckstein, ed., Comparison of Economic Systems (Berkeley: University of California Press, 1971). 3OJan Prybyla, ed., Comparative Economic Systems (New York: Appleton—Century—Croft, 1969). 31Robert T. Holt and John E. Turner, eds., The Methodology of Comparative Research (New York: The Free Press, 1970). 32Douglas E. Ashford, ed., Comparing Public Policies (London: Sage Publications, Ltd., 1978). 33Howard A. Scarrow, Comparative Political Analysis: An Introduction (New York: Harper and Row, 1969). 34S. F. Nadel, The Foundations of Social Anthropology (Glencoe: The Free Press, 1953). 35George Peter Murdock, ”Anthropology as a Comparative Science," Behavioral Science, 2 (October, 1957), 249—254. 36David E. Apter, ”A Comparative Method for the Study of Politics," The American Journal of Sociology, 64 (November, 1958), 221—237. 37Brian J. L. Berry, "Approaches to Regional Analysis: A Synthesis," Annals of the Association of American Geographers, 54 (March, 1964), 2—11. CHAPTER II. A REVIEW OF CONDITIONS ON HAI—NAN AND T'AI—WAN PRIOR TO 1895 Introduction Historically, Chinese control dates back much further for Hai—nan than it does for T'ai—wan. Chinese administration of Hai—nan began in 111 B.C., when the Han Dynasty gained control over parts of the island. T'ai—wan's relations with China go back only to the T'ang Dynasty, although T'ai—wan was not under Chinese administration until the Manchu Dynasty. Up until the 1880's, both islands were governed as part of larger provinces, Hai—nan was part of Kuang—tung and T'ai—wan was part of Fu—chien Province. In 1887, T'ai-wan became a separate province. Both islands experienced numerous foreign contacts prior to 1895. during the last years of the Ming Dynasty Japanese pirates used T'ai—wan as a base from which to raid coastal China. Later in the seventeenth century the Spanish and Dutch fought for control of the island, resulting in Dutch control for about 20 years. The Dutch were expelled in 1662 by Ming Dynasty loyalists who fled the mainland from the invading Manchus. From that time until 1895 T'ai—wan was under Chinese control. Hai—nan's foreign contacts were much less dramatic than T'ai—wan's. The earliest reported European contact was through a Jesuit mission established on the island in 1630. This mission was abandoned after the founding of the Ch'ing Dynasty 23 24 and was not reestablished for over 200 years. Since Hai—nan was near the European trade routes to China, there was interest in the island from an early date. The French in particular were interested and in 1884 threatened to invade the island. However, nothing happened and Hai—nan remained Chinese. The year 1895 marked a major turning point in modern Chinese history, with the signing of the Treaty of Shimonoseki which ended the first Sino—Japanese War. Through the treaty China was forced for the first time in recent history to transfer sovereignty of a Chinese province to a foreign power. The province, of course, was T'ai—wan, and for the purposes of this study the year 1895 marks the divergence of T'ai—wan andHai~nan. T'ai—wan began a fifty—year period as a colonial appendage of Japan, while Hai—nan remained a part of China and experienced, to a varying degree, all the turmoil that was part of Chinese history for the next fifty years. These events, coupled with change in the development patterns of the two islands, make the year 1895 an ideal point to begin this study. Physical Characteristics of the Islands In terms of physical geography, both islands are remarkably similar. Hai—nan is a large island off the southern coast of China, separated from the mainland by a narrow (24 kilometer) strait of water. T'ai—wan is also a large island, located off the southeastern coast of China, separated by a 99 kilometer strait of water. Historically, neither of the two straits has been a major barrier to travel between the islands and the mainland. The islands contain almost the same land area, with T'ai—wan covering 35,880 square kilometers while Hai—nan contains about 34,000 25 square kilometers of land. The bulk of the land on each island is either mountainous or hilly. 0n Hai—nan the mountains are located in the southwestern part of the island and run northeast to southwest. The Wu—chih shan constitutes the heart of the mountainous area reaching a maximum ele— vation of 1,879 meters; most of the other mountains have relatively low elevations, ranging from 500 meters to 1,000 meters.1 The mountains split the island into a northern low level and southern mountainous area. In contrast to the mountains of the south, the low areas of the north contain Hai—nan's rolling hills and plains. The northern and eastern parts of the island consist of relatively low sandy plains, while the west coast contains savanna and deserty Steppes. Most of the island's agricultural activity occurs in this northern low level area, but whatever advantages the low areas have, the mountains are nevertheless the dominant physical feature of the island——they cover the largest land area and have a significant influence over the islands weather, which in turn affects the agricultural regions of the north. Hai—nan is located in a monsoon region with the mountains acting as a barrier for the monsoons coming from the south thus depriving the north and especially the western parts of the island of the full benefits of the rains. In T'ai—wan, the plains lie mostly on the western side of the island with the mountains rising toward the east. The mountains run north—south along the eastern side of the island which is by far the most rugged part of T'ai—wan. They reach a height of 3,992 meters at Yu shan, with over 60 peaks over 3,048 meters. The alluvial plains 26 RMHAMM QMNHAon< Omm_ loom vom - 05 wow - mom won I O zo_._.<>m._m m E... 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PING—TUNG TIAI-TUNG '22:, ‘J‘ CHI-LUNG I I TN—WAN I ‘ I — Road I I M Railroad I Coal Field . HENG-CH'UN I I ‘ 22° , I W I ‘1} Major Darn l I I I I0 0 .o 20 30 I2IO° IZIo KILOMErEas Figure 6. T'AI—WAN 60 relative instability. Though the Chinese on T'ai-wan had proclaimed a republic shortly before the Japanese occupied the island, the Japanese soon eliminated that government. By October of 1895, the island was in the complete control of the armed forces of the Empire of Japan. However civil disruption occurred sporadically until 1902 and four anti—Japanese uprisings took place between 1907 and 1928. Neverthe— less, Japanese military control was never seriously challenged. It should be noted that most of the civil disorder was caused not by the Chinese population of the island but rather by the native peoples of T'ai-wan, who lived in the island's mountainous regions. T'ai—wan progressed from a subsistence agricultural economy in 1895 to a commercial agricultural economy by 1940. T'ai—wan's agriculture and her total economy, by 1940, had undergone numerous changes which transformed the island from a modest to a major exporter of food products. For example, in 1894, the island exported 40,634 metric tons of sugar and 700 metric tons of rice compared to 1,111,000 metric tons of sugar and 688,027 metric tons of rice in 1937. Table 10 shows gross recorded value figures for T'ai—wan's economy and Part A of this table gives some idea of the extent of T'ai-wan's agricultural growth. Overall it is estimated that the annual growth rate for the prewar years of 1905 to 1940 was 2.57 percent.1 T'ai-wan's agricultural growth during the Japanese period cen— tered on two major crops (rice and sugar cane) and several minor ones (bananas, pineapples, and sweet potatoes). Both rice and sugar cane production increased dramtaically during the Japanese period, with rice increasing sharply by the mid—1920's. Much of the increased pro- duction of rice was exported to Japan, as rice consumption on T'ai-wan 61 during the Japanese period declined considerably. The minor crops, bananas and pineapples, also expanded, but never challenged the two leaders, as sweet potatoes were primarily a domestically consumed crop. After 1932 rice production in Japan and Korea increased and the Japanese shifted the emphasis to sugar and other crops on T'ai-wan. The figures in Tables 10 and 11 make it apparent just how much agriculture dominated the pre—war economy of Taiwan. Agriculture itself accounted for almost 50 percent of the total gross recorded value of production from 1915 to 1940, with industry making up most of the remainder. The figures in Table 11 show that over two-thirds of the gross value of production recorded for industry was generated by the food products category or, in other words, agriculture. Thus, while T'ai-wan had a fairly substantial industrial sector, manufacturing probably made up less than 15 percent of the gross value of production even as late as 1940—42. In fact the value of agricultural production, as part of the total gross recorded value of production, showed a slow decline because of more pre-export processing rather than a shift from farming to manufacturing. The food products industry and industry as a whole was dominated by sugar. This dominance of the food industry is well illustrated by the fact that food process workers were the same percentage of the total industrial labor force during most of these years, and about 55 percent of this total was made up of sugar mill employees. But not all of T'ai-wan's industry was food processing, for significant development occurred in the metal and chemical industries, especially in the late 1930's and early 1940's. Some examples are the 62 TABLE 10 GROSS VALUE OF PRODUCTION RECORDED FOR "INDUSTRY" IN T'AI-WAN, BY LINE OF PRODUCT, 1921-42 (Yearly Average for Each Period) Years Total Textiles MEtals Eguip. Misc. Chemicals Foods A. Millions of Yen: 1921-24 165 3 3 4 20 13 122 1925-29 217 3 4 5 32 20 153 1930-34 228 3 6 5 29 18 167 1935-39 387 6 17 12 45 38 269 1940-42 664 46 3O 91 91 80 406 B. Percentages of Total: 1921-24 100 1.7 1.9 2.1 11.9 7.9 74.6 1925-29 100 1.5 2.0 2.2 14.7 9.3 70.3 1930-34 100 1.1 2.5 2.3 12.9 7.8 73.3 1935—39 100 1.5 4.5 3.1 11.6 9.9 69.4 1940-42 100 1.7 7.0 4. 13.7 12.1 61.0 Source: George W. Barclay, Colonial Development and Population in Taiwan, Princeton: Princeton University Press, 1954, p. 38. TABLE 11 T'AI-WAN: GROSS RECORDED VALUE OF ALL PRINCIPAL TYPES OF PRODUCTION, 1915-1942 (Yearly Average for Each Period) Years Total Agriculture Mining, Fishing/Forestry Industry A. Millions of Yen: 1915—l9 262.7 144.5 7.2 9.1 101.9 1920-24 411.5 207.0 12.0 23.0 169.0 1925-29 559.0 293.6 16.8 31.8 216.8 1930—34 525.5 255.8 15.5 26.5 227.7 1935-39 901.0 432.9 39.6 41.1 387.0 1940-42 1388.4 576.4 62.8 91.8 657.4 B. Percentages of Total: 1915-19 100 55.0 2.8 3.4 38.8 1920—24 100 50.3 2.9 5.6 41.2 1925-29 100 52.5 3.0 5.7 38.8 1930-34 100 48.7 3.0 5.0 43.3 1935-39 100 48.0 4.4 4.6 43.0 1940-42 100 41.5 4.5 6.6 47.4 Source: George W. Barclay, Colonial Development and Population in Taiwan, Princeton: Princeton University Press, 1954, p. 38. 63 production of aluminum using bauxite from Southeast Asia, and the manufacturing of chemicals made from T'ai-wan's own agricultural raw materials. Still T'ai-wan's industry was mostly processing and included little manufacturing by the early 1940's. As shown by Table 10 there was little change in the percent of the production of textiles, machinery and equipment, and miscellaneous from 1921 to 1940. It is worth noting that areas of the economy which had been important in 1894—95 did not necessarily decline in production or disappear, they just did not expand as much as some others. For example, tea exports nearly doubled in value during the year31897 U01937, from 6,906,000 yen to over 12,000,000 yen. However, for the same period the value of sugar exports increased by some 120 times, 2,688000 yen in 1897 to 191,546,000 yen in 1937. Similarly, the values of rice exports increased some 85 times, camphor only doubled, and while coal values increased 131 times the value was less than 4 percent of that of rice exports. While T'ai—wan experienced considerable development during the Japanese period it should be noted that the T'ai—wanese population did not necessarily share in this growth. Much of the surplus produced by T'ai—wan's agriculture and its processing industries went to Japan, and not to the T'ai—wanese consumer. As George Barclay pointed out, "Japan evolved a system of managing affairs in T'ai-wan that developed into one of the most successful colonial programs in the world and [T'ai—wan1repaid them handsomely for their initial investment 3 of care and expense." 64 Trade, Communications, and Infrastructure Under the Japanese, T'ai—wan's dependence on ocean trans— portation coupled with that of the Japanese economy, was a great asset. This allowed the Japanese to incorporate T'ai-wan's resources into their economy without incurring massive transportation costs. Politically, the Japanese discouraged foreign trade, and within a short time, T'ai—wan's trade was almost exclusively with the Japanese Empire. Table 12 shows that as early as 1908, Japan accounted for over 50 percent of the island's total trade and this increased in small amounts until it reached 90 percent by 1938. Additionally, T'ai-wan's location astride the shipping routes from southeast Asian bauxite sources and the Japanese home islands, coupled with the availability of cheap electric power on the island, led to the development of a metal processing industry on T'ai—wan. Internally, T'ai—wan's transportation and communication net- work expanded considerably under the Japanese. Road construction was started in earnest early and by 1938 there were over 17,000 km of roads on the island. Railroads, the other major segment of the island's transportation system, grew from less than 100 km to over 800 km by 1925. After 1925, the total length of T'ai—wan's railroads increased only slightly. Harbor facilities, that most necessary link between T'ai-wan's internal and Japan's external transportation system, also improved during this time. The health and education segment of the island's infrastructure also experienced much growth during this period, with over 70 percent of the children in school by the end of Japanese rule. Basically, the T'ai-wanese received a fair quality lower level education, with emphasis 65 on job related skills, Higher level training, especially uni— versity education, was a privilege afforded to few. In fact, while the Japanese established a university in T'ai—pei, it was used more for research than teaching. T'ai—wan's education system did under— go somewhat of a transformation during the 1930's, with more high level technical training made available to the T'ai—wanese, but it never offered certain types of instruction which would prepare T'ai—wanese for managerial type positions. It is important to note that the Japanese were not attempting to change the basic T'ai-wanese social structure, they were simply interested in molding it to suit their needs. The improvement of health conditions on T'ai—wan was one important benefit of Japanese rule. Major diseases such as cholera and plague were greatly reduced early during the Japanese tenure, though malaria remained a major threat until much later. The methods used were fairly straightforward—-disease was controlled by removing the source of infection. One method was to quarantine people who had the disease, which removed at least one source of infection. The other was to locate and eliminate the basic, often non-human, source of infection. Efforts were made to remove basically unhealthy situations ——swamps were drained and regulations enforced for food handling. However, throughout this period, the detection and compulsory treat- ment of sick individuals, under police supervision, was the principal weapon against disease. The Policies and Administration of Successful Colonialization During this period Japan followed the ideology of colonialism and practiced the economic system of capitalism on T'ai—wan. Colonialism 66 during the nineteenth century was a result of the industrial revolution and this new system of production needed markets for its products and raw materials for its factories. Colonies provided secure markets for industrial nations while also providing needed raw materials. Although the level of the colonial powers' involvement in the colonies' economic affairs varied widely under colonialism, there was always some involvement. In the case of T‘ai—wan, the Japanese became very involved in the island's economy, for they were interested in maximizing the economic benefits from their control of the island. During the Japanese period, T'ai—wan's development took ad- vantage of and utilized the island's natural resources. However, the rate at which development occurred and the direction it took was directly related to the policies followed by the Japanese colonial administration. Most of the policies were very straightforward. Im— proved health care and public health programs were started early, partly to keep the Japanese administrators and soldiers healthy and with the net result being improvement in the lot of the average T'ai-wanese. Increased public security and tight administrative policies were instituted, which meant the government was able to control the popu— lation and, to a great degree, many economic factors. The Japanese completed a land survey which clarified land ownership and allowed for a more complete collection of taxes. Standard— ization of money, measures, establishment of census, and the creation of numerous monopolies all helped the Japanese gain total control over the island and provided a monetary base needed for capital generation. The Japanese used the new capital generated from T'ai—wan's monopolies and taxes to improve the island's transportation system, education, harbors and so on. 67 These policies were intended to develop T'ai—wan as a supplier of raw materials and as a market for Japan's industrial products. The raw materials that T'ai—wan could provide the Japanese were primarily agricultural; the infrastructure improvements and tight administration were simply geared to improve the island's ability to supply Japan with these raw materials. Two of the raw materials selected by Japan for exploitation were rice and sugar. The colonial government sponsored and built irrigation systems, and from 1911 to 1945 the irrigated area increased by an average of 9,428 hectares per year. The government also supported research in agriculture and introduced new strains of crops. The objective was to raise per unit and per capita agricultural output. In the area of rice production, by the early 1930's a new strain of rice (Pon-lai), was introduced into T'ai—wan from Japan and replaced the native types. This led to increased yields and the production of a rice that was more to Japanese taste. In addition, the rice market was manipulated in such a way that the T'ai—wanese became major producers but not consumers. This allowed the Japanese to ship the increased surplus to Japan leaving the T'ai—wanese to eat sweet potatoes and other less desirable foods. The sugar industry was another area that the Japanese specifically nurtured. By the early 1900's Japan established a sugar cartel which was then given a free hand. The cartel could, and did, use any means necessary to control the sugar industry on the island. Examples of such measures were their control over irrigation and giving cash ad- vances to farmers which were tied to certain concessions. The cartel was able to force the T'ai-wanese farmer to grow sugar cane at a low 68 price and in some cases to plant sugar in place of the more profitable rice. By these means the cartel was able to establish a large sugar industry which produced huge quantities of sugar at low constant prices. Within a short time the sugar industry of T'ai-wan was supplying the sugar needs of the Japanese Empire. Considering the fact that prior to 1895 Japan's imports of sugar were equal to 10 percent of her total imports, T'ai—wan's cheap and abundant sugar was extremely bene- ficial to Japan. Japan also sought to exploit other areas of the island's wealth. Investment in the canning industry was but another way to increase the island's profitability. Costs were kept low, profits high, and the crops did not compete with rice or sugar. The same logic held true when the Japanese began development of the island's hydro—electric power potential. The internal investment was high, but the power gener— ated over time was quite cheap. This cheap power plus T'ai—wan's location between Japan and supplies of minerals led to the development of the metal processing industries (such as aluminum) late in the colonial period. Still the Japanese envisioned T'ai—wan as a supplier of raw materials, not as a site for manufacturing industry. Thus, while the sugar industry refined sugar, and the metal industry made aluminum, the further processing of these materials was done in the Japanese home islands. The Post-World War II Years, 1945-1949 The Post-War Economy The immediate post—World War II period found T'ai-wan's economy in very poor condition due to the effects of the war. The Japanese had been unable to maintain the island's economy. However, even though 69 TABLE 12 VALUE OF EXPORTS FROM T'AI-WAN BY PLACE OF DESTINATION 1899-1942 Total To Japan Percent Year (thousands of Yen) (includes Korea) to Japan# 1899-1909 24,659 13,932 56.5 1910-1914 56,936 46,727 78.0 1915-1919 130,192 98,929 76.0 1920-1924 195,767 163,566 83.6 1925-1929 256,326 214,533 83.7 1930-1934 251,176 230,579 91.7 1935-1939 445,653 402,641 90.3 1940-1942 527,609 419,570 79.5 #Includes Korea George W. Barclay. Colonial Development and Population in Taiwan. Princeton: Princeton University Press, 1951, p. 21. Source: 70 T'ai-wan's economy had suffered greatly from the war, the basic infra- sturcture was still functional. The roads were damaged but usable, and the same was true of other segments of the transportation and communi- cation systems. Also, many industrial facilities had been damaged but not completely destroyed. In fact, upon T'ai—wan's return to Chinese control, it probably had the best basic economic framework of any Chinese province. By 1949, T'ai—wan's economy had not recovered to pre-war levels. A glance at Table 13 shows how much the volume of T'ai-wan's exports had fallen by 1950. With the exception of salt, all of T'ai—wan's traditional exports had dramatically decreased. Sugar exports were down some 50 percent, coal was down by about 80 percent and rice exports had decreased by an almost unbelievable 95 percent. Table 14 shows how rice, one important segment of T'ai-wan's economy, performed during the immediate post—war period. By 1949, T'ai-wan was still not producing as much rice as it had in 1938, though it had about doubled its production since 1945. However, much of this increased production is explained by the increased land area under culti- vation as about 50 percent more land was devoted to rice in 1949 than in 1945. Thus not only was per hectare productivity lower than it had been under the Japanese, but the amount of land devoted to other crops must also have been smaller. Smaller amounts of land devoted to sugar, coupled with likely lower productivity per hectare, would then explain the reduced amounts of sugar exports. Not only was the agricultural segment of the island's economy slow to recover, but so too was industrial production. Before the war, the food processing industry was the largest segment of this part of the 71 TABLE 13 T'AI—WAN: VOLUME OF MAJOR EXPORTS, 1937, 1950, 1951, and 1952 Item Quantity 1937 1950 1951 1952 Sugar M. Tons 1,111,000 608,425 283,515 458,182 Rice " 688,027 27,425 84,935 107,415 Bananas " 156,781 10,800 26,502 42,567 Tea " 10,282 7,549 11,324 9,323 Salt " 117,222 203,210 239,051 181,412 Coal " 407,915 67,705 18,121 77,829 Pineapples (cans) " 35,000 3,539 4,870 5,016 Cement " 9,715 3,554 50,500 11,144 Camphor " 2,026 1,477 929 277 Source: Norton S. Ginsburg. The Economic Resources and Development of Formosa. New York: Institute of Pacific Relations, 1953, p. 56. TABLE 14 T"AI—WAN: AVERAGE OUTPUT OF RICE, 1938-1950 Year Hectares MEtric Tons* 1938 625.4 1,402.4 1945 502.0 638.8 1946 564.0 894.0 1947 677.6 999.0 1948 717.7 1,068.4 1949 747.7 1,214.5 1950 (est.) 781.8 1,412.9 * in 1,000 Source: Lih-wu Han. Taiwan Today. Tai-pei: Hwa-kuo Publishing Co., 1951, p. 79. 72 economy. By 1949 production was only 72 percent of what it had been in 1941. The mining and timber industries were in even worse con— dition, as in 1949 they were only 56 and 53 percent of their 1941 production, respectively. Only the transportation, fertilizer, and textile segments of the economy had higher production figures in 1949 than in 1941. The major reason for this was that beforeijmawar pro- duction was almost nonexistent therefore any increase in production would show up as a high percentage. The statistics also show little change in production lines from the previous Japanese period. The type of exports from the island remained almost the same, discounting volume, as before the war, and in the post-war years on T'ai—wan no new products were developed. Similarly, while there was increased production of a few items for the internal market, they seldom reached the level necessary to supply T'ai-wan's needs, and in all cases were attempts to supply locally what had previously been provided by Japan. Fertilizer is the best example of this, since it was a very small industry before the war, and it expanded somewhat after the war. However, T'ai-wan's fertilizer pro— duction of 59,000 metric tons fell far short of the 338,000 metric tons used on the island in 1950. Thus while T'ai—wan's economy recovered very slowly from the effects of the second Sino—Japanese War, it had changed little from what it had been under the Japanese. The island's economy generally pro- duced less of the same items than it had during Japan's rule. More— over, the products continued to be based on the island's natural re- sources and the economy showed no sign of a change from that direction. While there were declines in the island's production of traditional 73 goods, both agricultural and industrial, they were not the result of effort put into different economic endeavors. While the makeup of T'ai—wan's economy was little changed during these years, it was not a healthy economy. For example, in- flation was a very serious problem on T'ai—wan after the war, as it was on the mainland, with "prices rising at the rate of 1,145 times a year in 1948."4 Inflation was but one condition among many that was tied to the situation on the mainland. Another was the lack of trained personnel to manage T'ai—wan's various industries and infrastructure, for the Japanese had previously held the higher level jobs and they left after the war. There were few on T—ai'wan who had the training to replace them and the mainland Chinese did not have the necessary managerial skills either. Trade, Communications and Infrastructhre In a sense the conditions under which T'ai—wan engaged in trade in 1945 were much like they had been in the last half of the nineteenth century. T'ai—wan was again part of China and the restraints the Japanese had imposed on the island's trade were removed. But in their place were new ones which prevented private T'ai-wanese merchants from trading with Japan. China therefore replaced Japan as main recipient of T'ai—wanese exports (See Table 16). However, conditions on T'ai-wan at this time do not indicate that China played the Japanese role in the area of imports, since there is little evidence of Chinese manu— factured goods being received on the island. The Japanese had developed the island's infrastructure to a very high level of efficiency prior to the war, with health care, education, irrigation, transportation and communications on T'ai—wan undoubtedly 74 TABLE 15 T'AI-WAN: INDUSTRIAL PRODUCTION INDEX, 1937-1955* Industries 1937 1949 1953 1954 1955# Power 56 83 151‘ 175 177 Transportation 61 145 193 223 263 Chemical 84 91 208 267 306 Fertilizer 85 139 581 582 492 Food Processing 106 72 118 109 115 Metal and Machinery 49 46 78 108 107 Mining 75 56E 88 85 86 Textile 67 174 1085 1270 1274 Timber 58 53 116 115 116 All Industries 79 74 140 152 159 Per Capita all Industries 88 57 88 93 97 * Base 1941=100 # First Six Months Source: Norton S. Ginsburg. The Economic Resources and Develpp- mentcfobrmosa. New York: Institute of Pacific Re— lations, 1953, p. 55. TABLE 16 T'AI-WAN'S EXPORTS TO THE CHINESE MAINLAND 1937-1942 AND 1946-1948 Total Exports Exports to Mainland Year Value*# Value* Percent 1937 440 (440) 12 2.7 1938 456 (390) 27 6.0 1939 593 (443) 70 11.8 1940 566 (375) 94 16.6 1941 494 (299) 110 22.3 1942 523 (311) 97 18.6 1946 2,482 (29) 2,309 93.0 1947 36,247 (90) 33,544 92.3 1948 226,268 (91) 187,120 82.7 * Million Yen # Figures in parentheses based on 1937 index of 100 Source: Ching—yuan Lin. Industrialization in Taiwan, 1946—1972. New York: Praeger Publishers, 1973. 75 better than anything in China properiv This was probably‘true even» after 1949, but the new Chinese government did not capitalize on this advantage. For example, while there were 241 locomotives serviceable in 1945, there were only 188 operating in 1950. Also the tonnage carried by the railroads in 1950 was still below that of 1941. While the length of the island's highways was about the same as in 1938, their quality was in disrepair. This shows a certain amount of deterioration, but mostly a lack of rehabilitation of the island's infrastructure. That was not the case in the area of health conditions. Sanitary conditions as well as health care were allowed to deteriorate after 1945 as evidenced by the lack of garbage collection, due to the appropriation of garbage trucks to haul more profitable materials for Chinese officials. Another reason was simply lack of trained health care personnel, since most of the medical personnel were Japanese who had been sent back to Japan after the war. From 1946 to August of 1947, there were a series of epidemics of smallpox, cholera, and plague, with smallpox continuing to be a problem until 1950. Pro—government sources claim success in the rehabilitation of two areas of the island's infrastructure——irrigation works and edu— cation. In the area of land under irrigation, the statistics of the pro—government source conflict with that of the Joint Commission on Rural Reconstruction (JCRR) with the pro—government source claiming 81,000 hectares more irrigated land than does JCRR for 1955. However, whichever figures one accepts, it is clear that irrigation increased fairly considerably after the war, and that it was due largely to the work of government sponsored agencies. The education picture is less clear, for while the number of students remained about the same as 76 under Japanese rule, it is hard to gauge the quality of the instruction. One thing is known--provincia1 level (i.e. controlled) schools saw an increase in the number of students enrolled after 1945. Policies and Administration after the War T'ai-wan was formally surrendered by the Japanese on 25 October 1945. From that date the teachings of Sun Yat-sen provided the ideological underpinnings of T'ai—wan's government. Sun claimed that "there is no real difference between the two principles-—communism and min-shengllPeople'slivelihoodlwthe difference lies in the methods by which they are applied."5 Regardless of the merit of his claim that communism and min-sheng are the same, the methods Sun proposed to attain min—sheng were certainly different from those used under com— munism or even socialism. Sun proposed two principal methods to achieve min—sheng——the equalization of landownership and the regulation of capital.6 By equalization of landownership, he hoped to eliminate landlordism, thereby freeing the Chinese peasant from land rents. Sun proposed that government should impose a high land tax, which would liteHAIIthucthe large landowners out of their "excess” land. Thus government was to be the major instigator in the equalization of land. Similarly, the regulation of capital was also to be a major concern of the state, since Sun perceived the "development of state industries" . . 7 . . as one means by wh1ch to accumulate capital. In his book, International Development of China, Sun proposed a series of programs for the develop— ment of China. These programs included 100,000 miles of railroads, a million miles of highways, three large new harbors, building of an iron and steel complex in Shan-hsi, improvement of telegraph and tele— phone service, improvements in agriculture, and the development of a 77 wide range of industries and related facilities.8 Sun envisioned most of these programs as state enterprises, but he also indicated a willingness to accept foreign capital to facilitate his plans.9 This and increased private landownership are major contradictions be- tween communism and min-sheng. Nevertheless, the important fact for this research is that Sun envisioned direct government involvement in Chinese economic affairs. After the Chinese took over T'ai—wan they appointed the former governor of Fu—chien Province, Ch'en Yi, as Governor—General of T'ai-wan and sent a military garrison to the island. During Ch'en Yi's approxi— mately one and a half year tenure, T'ai-wan was under a military govern- ment with a few civilians appointed to various posts. Apparently the reason the national government appointed a military administration was the belief that there was still considerable Japanese influence on 2 the island thereby necessitating a strong military government. Once the Chinese took over the island they appropriated all residential, commercial, and industrial holdings of the Japanese. In May of 1946 they ”consolidated the numerous Japanese private enter- prises into 22 large public corporations owned solely by the central government or the provincial government, or jointly by both governments."10 Thus, in theory, the Chinese government now controlled most of the modern segment of T'ai—wan's economy. While this organizational structure meant that the Chinese government was now in control of large segments of T'ai—wan's economy, the organization itself could not provide the needed administrative skills necessary for proper management of these enterprises. Unfortunately, there must have been few Chinese on T'ai—wan who had the necessary management skills, for a number of Japanese managers were kept on during this time. 78 In most cases it appeared that the new Chinese government really wasn't concerned with managing the new industries, since numerous reports claim that officials were more interested in immediate and personal profit than in long range rehabilitation. One writer claimed that this period was best described with the phrase "if you can't sell the product, sell the plant."11 There also appeared to be little attempt to emulate the Japanese, who had such success on the island. Since so many Chinese officials were interested in immediate profit, "the cohesive administrative system which held the economy together under the Japanese had disintegrated, and in its place appeared an amorphous mass of bureaucrats, legitimate businessmen, and profiteers."12 While there were changes after Chen Yi was replaced, principally that the island was placed under civilian rule, the effectiveness of govern— ment improved little. In the area of transportation and communication, war damage, direct due to bombing, or breakdown of equipment because of lack of repair parts, hindered T'ai—wan's economy. The post-war government was unable to rehabilitate the transportation and communication net— works, much less improve them. While much the same situation existed in other parts of China, most of these regions were involved in the civil war, which was hindering reconstruction of the transportation network. But there was no civil war activity on T'ai-wan, thus the inability of the provincial government to rehabilitate communications and transportation cannot be blamed on communist warfare. The blame falls right on the shoulders of various Chinese governmental agencies. In some cases the impediments to trade were bureaucratic, and the right leverage got the goods moving. In other cases the lack of trained 79 personnel or proper protection meant that goods would probably never arrive at their destination. In either case, such conditions put a serious burden on trade. Even a semi—official source admitted that "while the government was full of good intentions . . . there were bound to be petty opportunists and unscrupulous politicians" and that a "shortage of trained personnel [local] and lack of sufficient experience and understanding which came with years of servitude, were necessarily handicaps" before 1949.13 Whatever the specific reason, the government during this whole time experienced extreme difficulty in repairing the island's economy, much less improving it. While government administration was not very effective, some attempts were made to rebuild T'ai-wan's economy. For example, there was some government investment in T'ai-wan's industries before 1949. However, due to rampant inflation, theft, and poor statistics, it is hard to evaluate the effect of such investment. Nevertheless, it appears that government policies were aimed at rehabilitation of ex— isting segments of T'ai—wan's economy rather than investment in new areas of development. For example, both the T'ai—wan Sugar Corporation and the T'ai—wan Power Company (government controlled companies) received government bank loans for reconstruction and refurbishing projects. Also various enterprises under the National Resources Commission, such as the T'ai—wan Gold and Copper Mining Administration, T'ai-wan Fertilizer Company, and the T'ai—wan Aluminum Corporation, received government investments after May of 1946. The final factor worth discussion at this time centers on the provincial government's relationship to the inflation which was rampant throughout China. In one sense, the provincial authorities on T'ai—wan 80 had little control over an inflation which was national in scope, for the Chinese civil war and the large military budget was something beyond any province of China to control. However, that is not to say T'ai—wan's government was not without blame in helping inflation grow. Since the Bank of T'ai—wan issued money, and the bank was under provincial control, the provincial government therefore controlled much of T'ai—wan's money supply. But during 1946 the Bank of T'ai—wan had three printing presses busily producing banknotes, the total issue of which was unknown. Later new banknotes were issued, but that new issue was no more successful in controlling inflation than the previous 14 one. Independent" T'ai—wan, 1949 to 1975 A New Economic Life for the Island With the fall of Shang—hai on May 25, 1949, economic relation— ships between T'ai—wan and mainland China were severed. Thus, as one Chinese writer put it, after that date "the planning and development of T'ai—wan's industries were [sic] based on the economic interests of T'ai—wan."ls Soon changes in the development pattern of T'ai—wan began to take place. This new economic period was summed up by Lin Ching—yuan, who said that T'ai—wan was "transformed within a short span of time from an unstable agricultural economy exporting sugar, rice and other primary goods to a expanding exporter of light manufacturings and other highly processed goods."16 The years between 1949 and 1953 were concerned mostly with re— construction and rebuilding of that part of the island's economy which was still suffering from the war. By 1952, many of the economic indi— cators were approaching or had surpassed the pre—war levels, while 81 cement and timber production had exceeded their earlier marks. Additionally, textile production expanded during this time as compared to limited production under the Japanese. In 1952, the China Textile Industries Corporation established a mill at K'an-tze-chiao with 17 Other plants had machinery evacuated from the China mainland. also been "transferred" from the mainland during the late 1940's and these became the nucleus of T'ai—wan's current textile industry. In 1953, T'ai-wan's economy entered a new phase. Reconstruction and rehabilitation were considered completed and the government began to plan for future development. In that year the Republic of China's First Four—Year Plan began. From 1953 to 1971, industrial production grew at an annual rate of 14.6 percent, while agriculture grew by 4.8 percent annually so that by 1971 industrial production had surpassed agriculture and accounted for 34.4 percent of the net domestic product versus agriculture's 17 percent.18 The 1971 figures are nearly exactly the reverse of those for 1953, when agriculture contributed 40 percent of the net domestic product and industry accounted for only 17 percent. Before 1960, T'ai—wan's economy had moved toward stability but the economic structure of the island had not yet been transformed from an agricultural to a manufacturing one. In the manufacturing area, dramatic movement occurred during this early period, as evidenced by a 39 percent drop in the value of production of food and related 20 goods between the 1940's and 1954. That was dramatic, but food products in 1954 still accounted for about 90 percent of exports: "in 1947, for instance, imported goods accounted for more than 70 percent of apparent domestic consumption (i.e., value of production plus im- ports, minus exports) of manufactured goods other than food, beverages 82 and tobacco," but by 1954 domestic production was supplying an estimated 77 percent of apparent domestic consumption.21 The major areas that were being supplied by domestic production were the con- sumer goods of textiles and apparel, wood products, leathen and printing along with some producer goods like petroleum refining and cement manu- facturing. By the late 1950's, the domestic market was saturated and this was followed by an industrial slowdown with industry centered on light manufacturing showing little growth in the intermediate and capital goods sectors. In terms of the overall economy, by 1959, 56.6 percent of the work force was employed in agriculture, forestry, or fisheries, while only 11.1 percent worked in secondary industries (i.e., manufacturing, mining, construction, and public utilities).22 It was mainly after 1960 that both the base and mix of T'ai-wan's economy changed. "The share of industrial production in the net domestic product began to surpass that of agricultural production in 1963" and continued to grow as the decade went on.23 Not only was industry replacing agriculture as the base of the island's economy, the secondary manufacturing industries were becoming the largest em— ployer on the island. As of October 1974, 33 percent of the labor force was employed in manufacturing, 34 percent in tertiary industries, and 30 percent in agriculture, forestry, hunting and fishing.24 The initial expansion of T'ai—wan's industry resulted from the growth in areas of light industrial products designed primarily for export. As the light industrial products industries grew, so did the chemical and heavy industries which supported them. In fact, the share of the chemical and heavy (metals and machinery) industries as part of the total manufacturing sector increased from 30 percent in 1952 to 51.2 percent 83 in 1971, while during the same period light industry's share declined from 70 percent to 48.8 percent of the total. By the 1970's, T'ai-wan's economy had not only become based on industry which was mostly manu— facturing, but the mix of the manufacturing was shifting toward a dominance of chemical and heavy (metal and machinery) industries (see Table 17). Trade, Communications, and Infrastructure The events of 1949 not only meant a political and economic change but they also pushed T'ai-wan into a new trading situation. No longer could China and Taiwan trade with each other, for politics would not permit it. Thus T'ai—wan's unique location off the coast of China was changed by political conditions and T'ai—wan had to find other trading partners. This was not really difficult from a trans— portation point of view for the island's dependence on ocean trans- portation meant that it could easily tie into the world's trading net— work. In effect that was what happened, for the rest of the world eventually provided an outlet for T'ai-wanese goods. After December 1949, trade with Japan, which was closed to private merchants before this date, was resumed. The early trade was mostly barter, but agreements were later reached which formalized trade between the islands. During the same time T'ai—wan's trade with other parts of the world was expanded so that by the mid—1960's, many of the world's nations traded with T'ai—wan. At this time Japan and the U.S. were the two largest trading partners accounting for over 50 percent of the total trade. T'ai-wan's trade breakdowns have not changed much up to the present. 84 book, 1975. T'ai-pei, 1975. TABLE 17 T'AI-WAN: PRINCIPAL INDUSTRIAL PRODUCTS, 1974 Item Unit pguantity Mining Coal M.T. 2,934,427 Crude Oil K.L. 209,975 Natural Gas 1,000 M3 1,586,701 Salt M.T. 362,809 Heavy and Petrochemical Plastic Shoes 1,000 Pairs 197,037 Aluminum Ingots 1,000 M.T. 31,320 Sewing Machines 1,000 Set 1,178 Agricultural Machinery Set 5,800 Electric Fans 1,000 Set 501 Air Conditioners Set 35,300 Transistor Radios 1,000 Set 16,100 TV Sets 1,000 Set 4,340 Recording Machines 1,000 Set 2,204 Electronic Calculators 1,000 Set 400 Automobiles Units 28,000 Motor Cycles 1,000 Units 304 Bicycles 1,000 Units 1,178 Ships or Vessels 1,000 Gross Ton 306 Fluorescent Lamps 1,000 Units 17,310 Lighpfilndustries Canned Pineapples 1,000 Std. Case 2,670 Canned Asparagus 1,000 Std. Case 3,653 Canned Mushrooms 1,000 Std. Case 2,950 Polyamicle Filament M.T. 43,297 Garments 1,000 Doz. 9,384 Knitted Garments 1,000 Doz. 22,175 Cement 1,000 M.T. 6,242 Plywood Million Ft .2 3, 762 Source: The China Yearbook Editorial Board, China Year— 85 While the island's trade has expanded, so too have her internal transportation and communication systems. For example, railroads have improved their efficiency with over 338 serviceable locomotives operating in the early 1970's. Roadway and supportive equipment has also improved. Highways, while not expanding in terms of mileage, have undergone considerable change, with almost half of the island's roads paved by the mid-1970's.25 In addition, harbors, aviation facilities, and telecommunications have all been updated during this period. Those parts of the infrastructure which affect labor have received special attention. The education system has received increased emphasis over the years, with enrollment rates high and the total educational expenditure as percent of GNP increasing from 5.1 percent in 1971 to 5.4 percent in 1976.26 It appears that the government is aware that its new economic policies also require the development of the island's manpower resources. New Policies for a New Situation The Chinese government's attitude toward T'ai—wan changed con- siderably after 1949. In April 1949, the Nationalist government evacuated Nan—ching for Kuang-chou (Canton), in October the move was to Ch'ung—ch'ing (Chungking), and a month later the government was housed in Ch'eng-tu. Finally, in December of 1949, T'ai—pei became the capitol of the Republic of China. Shortly after the central government moved to T'ai—wan, the last Nationalist areas on the mainland fell to the Communists and T'ai-wan, along with a few small islands, became the only Chinese region which followed Sun Yat-sen's principles. There was, however, a major change during this period, with the govern— ment becoming much more effective and efficient in handling economic 86 policies. Thus while the ideology upon which the government based its policies had not changed, the effectiveness by which they were applied certainly had improved. Coupled with the fact that T'ai—wan had for all practical purposes become independent, it is easy to understand the new emphasis on strengthening the island's economy, for if the Republic of China was to survive as a state, the economy of T'ai-wan would have to support it. During 1949, when it became apparent that T'ai-wan was to become the last place of resistance for the Nationalist government, a number of actions were taken which were hoped would stabilize the island's economy. One of the first was to get under control the inflation which had grown to tremendous levels. Steps were taken to stabilize the currency, control foreign exchange, reduce expenditures and increase taxes. A new T'ai—wan dollar was issued in 1949, with strict controls and as a non-convertible currency, with one new dollar worth 40,000 of the old dollars.27 While these various measures helped to stabilize inflation, it was not brought under control until 1956, as a sizable budget deficit prevented its rapid elimination. Fortunately for the Nationalist government, U.S. aid was available to help offset large budget deficits (mostly military).28 Aid to the Nationalist government, especially American aid, was continued after 1949 in the form of the Chinese American Joint Commission on Rural Reconstruction (JCRR).29 However, while JCRR was important in the overall improvement of T'ai-wan's economy, it was not until 1951 and the beginning of the Korean War that large amounts of American aid entered the island via the Mutual Security Act. From 1951 to 1965, over 1.5 billion dollars of U.S. aid entered T'ai—wan 87 in one form or another.30 While U.S. aid was not the only reason for T'ai—wan's dramatic economic recovery, it was, no doubt, an important factor when combined with other changes such as the Economic Stabilization Board, created in 1951, and the First Four—Year Plan, which started in 1953. In 1949, the government also undertook the first phase of the well-known land reform program which was meant to improve economic conditions on the island and gain popular support. During its first phase, land rents were reduced to a maximum of 37.5 percent of the main crop and the tenant was given certain security through six-year contracts.31 In 1951, considerable government land was put up for sale, most of which had been appropriated from Japanese interests after the war, and was sold to T'ai—wanese farmers (through government financing) at low prices. The final phase of land reform started in 1953 and was aimed at limiting the size of land holdings. A11 land in excess of a certain amount had to be sold to the government at a set price and was then resold to private farmers. By 1965, 87 percent of farm families were owners or part owners of the land they tilled, compared to only about 33 percent in 1949.32 The land reform 11x1 to a high degree of income equalization, limited the concentration of land, and garnered considerable popular support for the government. With the formulation and implementation of the First Four-Year Plan in 1953 the government began to take an active role in the island's overall development. The first two Four—Year Plans stressed self sufficiency in agriculture and light industrial products. During this time import controls were imposed which helped local industry develop, and laws were passed which encouraged investment in the island's economy. 88 The economy was directed toward import substitution and the results were quite satisfactory. However, by the late 1950's, economic growth was declining, since the local market was now unable to support more growth. The government thereupon redirected the economy toward exports based on manufacturing. The third, fourth, and fifth Four-Year Plans stressed development of industries suitable for export markets and began a transition from light to heavy industry. An important part of these last three plans was the improved investment climate, liberal- ization of controls on industry and trade, improved export promotion, and foreign exchange reforms, all of which were meant to give incentives to export industries. The government's involvement and success in agricultural reform went a long way toward assuring the success of the new economic plans, for T'ai—wan's cheap labor was a prime reason for the island's competitiveness in its export products. Moreover, the availability of this labor and its effectiveness was primarily a result of success in agricultural development and various other social overhead invest- ments such as education and health care. Although the government chose to develop agriculture, it did not follow the colonial Japanese example and base the island's economy on this revitalized sector of the economy. Instead, it decided to follow a different path which closely paralleled the Japanese example. Summary T'ai-wan has undergone considerable economic change since 1895. During the period from 1895 to 1945, the island had an effective economy which was based on the exploitation of the region's natural resources. 89 This economy was effective in that it successfully produced surpluses of products, primarily rice and sugar, which could be exported to the Japanese home islands. Japan, in turn, shipped manufactured items to T'ai-wan, thus maintaining an efficient trade relationship which continued throughout the Japanese period. T'ai—wan never developed enough manufacturing capability to supply its own needs during this time period. The reason that T'ai—wan's economy at this time did not develop sufficient manufacturing capability for local needs was that Japan's colonial policies did not permit it. This policy called for T'ai— wan to supply raw materials for Japan's industry which in turn would supply T'ai-wan with manufactured products. Towards that end, the Japanese government on T'ai-wan followed policies which discouraged most manufacturing on the island, while encouraging those activities which facilitated the exploitation of certain natural materials. The creation of the sugar cartel and the expansion of the island's irri- gation network are two good examples of actions taken by the Japanese authorities which greatly aided in the exploitation of T'ai—wan's rice and sugar potential. During this period the Japanese practiced colonialism. The eco- nomic system which they used on T'ai—wan during this time was state- supported capitalism. The Japanese allowed private Japanese com- panies monopolistic or near monopolistic control over segments of T'ai-wan's economy. Because of this and the fact that the colonial government's laws and administration were tailored to support the Japanese companies, efficiency and high profits were the norm for these enterprises. However, while the colonial government supported and 9O encouraged Japanese capitalists, they discouraged foreign capitalists by placing numerous roadblocks in their path with the result that whthin a short time after 1895, foreign companies played a very small role in T'ai-wan's economy. Assuming results are a good measure of the success of a policy, then the Japanese administration on T'ai—wan was very successful. Since colonialism implies that the colonial area (T'ai—wan) is used to the benefit of the colonial power (Japan), it is easy to understand why the Japanese followed certain practices. For example, monopolies increase profits and that was a major concern for the Japanese companies. Also since Japan imported large amounts of sugar, T'ai-wan's ability to supply these needs at a low price was a decided advantage for the Japanese economy. It appears that Japan's discourage— ment of manufacturing on T'ai—wan was not only a result of colonialism, but also necessitated by the distribution of raw material resources. During this time it is very unlikely that the two regions could have been cast in any roles other than Japan as supplier of manufactured goods and T'ai-wan as producer of raw materials. It could have worked no other way, since Japan had few natural resources and its economy during this period would not have supported the development of manu- facturing on both T'ai—wan and Japan. Ideology aside, the major reason T'ai—wan developed under the Japanese was that the Japanese provided an effective and efficient government which provided incentives and support for the island's developing economy. Improved health care, transportation, irrigation, police protection, all had a definite impact on T'ai-wan's development. In most cases the construction of this infrastructure was tied directly 91 to an economic goal, for example, irrigation and rice farming. In other areas the relationship was more abstract, as was the case with police protection. But whatever the relationship, it was government involvement which was a major factor in the island's development. When T'ai—wan was garrisoned by forces of the Republic of China in 1945, the island entered a new political condition which was for T'ai-wan to become a part of China once more. This condition has con- tinued, on paper at least, down to the present day. Of course, T'ai—wan ceased to be a part of China in 1949 and became defacto independent. However, for the first four years, T'ai—wan was indeed a part of China. During these years the island's economy stagnated. While it appears that the basic make-up of the economy changed little during this time, its effectiveness was never at the pre—war level. Thus while rice and sugar were still the island's major crops and made up the largest segment of the economy, they did so at a reduced level from previous years. Also T'ai—wan's economy during these years suffered the effects of massive inflation which not only hindered economic growth, but was unique to this period. Most of T'ai-wan's economic ills during the late 1940's were related to the actions or inactions of the new Chinese government. The Opportunism of the new Chinese bureaucrats is hard to imagine and the facts themselves are even harder to believe. Still, it is an indisputable fact that government administrators' willingness to make personal profits and their inability or unwillingness to do their jobs gave rise to conditions in T'ai-wan which kept the economy from repairing much of the wartime damage. 92 However, around 1949, the attitude of Chinese officials began to change as the Nationalist government began to lose the Chinese civil war. From then on Chinese administration improved and government policies began to affect positive changes in T'ai—wan's economy. For example, the early land reform improved agriculture and increased public support for the government. The redirection of the economy in the 1960's away from dependence on exporting natural resources and toward more exports of manufactured products is but another example of govern— ment involvement in T'ai—wan's economy. The obvious reason for this change was that after 1949 T'ai-wan was no longer a part of a larger national economy. T'ai-wan had to survive economically on its own and support not only a provincial level government, but the national level government of the Republic of China as well. This created a con— siderable burden on the economy and no doubt contributed to the decision to direct T'ai-wan's economy away from reliance on natural resources. The basic economic system which has been used to accomplish this redirection has been capitalism coupled with state planning. While T'ai—wan's government officially follows the teachings of Sun Yat—sen, the economic policies which it has followed since 1949 have only a remote similarity to his ideology. As one source points out while the "over- all long range guiding principles for the economy were based upon the tenets of Sun—Yat-sen . . . in practice, the principles were interpreted as allowing for both private and state enterprises" with the direction by the state kept to a minimum.33 The early land reform on T'ai—wan clearly paralleled Sun's ideas about the equalization of landownership and his ideas of state involvement in economic matters certainly underlay T'ai-wan's system of planning since 1949. Thus in a general way Sun's 93 ideology has contributed to T'ai—wan's economic policies but it is also true that his ideology does not specify where and how the economic policies should be implemented. It seems that the political condition of T'ai-wan's "independence” called for a strong economy. Towards that end the government determined that a manufacturing economy was desirable and implemented policies which encouraged that sort of development. Thus, it appears that it was the political condition of T'ai—wan's indepencence rather than any ideology which effected a change in the island's development pattern. It is unlikely, however, that without an effective and efficient govern- ment T'ai—wan could have experienced such changes. 94 Notes - Chapter III thi-min Ho, Agricultural Development of Taiwan, 1903—1960 (Kingsport: Vanderbilt University Press, 1966), p. 117. 2George W. Barclay, Colonial Development and Population in Taiwan (Princeton: Princeton University Press, 1951), p. 64. 3Ibid., p. 7. 4Ching-yuan Lin, Industrialization in Taiwan (New York: Praeger Publishers, 1973), p. 29. 5Sun Yat—sen, San Min Chu I (Shanghai: The Commercial Press, Limited, 1928), p. 416. 6Ibid., p. 409. 7Ibid., p. 441. 8Sun Yat—sen, The International Development of China (Shanghai: The Commercial Press, Limited, 1920). 9Sun, San Min Chu 1, Op. cit., p. 442. 10The China Yearbook Editorial Board, China Yearbook, 1975 (Taipei: China Publishing Co., 1975), p. 313. 11George H. Kerr, Formosa Betrayed (Boston: Houghton Mifflin Company, 1965), p. 127. 12Norton S. Ginsburg, The Economic Resources and Development of Formosa (New York: Institute of Pacific Relations, 1953), p. 35. l3Lih Wu Han, Taiwan Today (Taipeh: Hwa Kuo Publishing Company, 1951), p. 52. 14Kerr, 0 . cit., p. 128. 8 1"Han, o . cit., p. 52. l6Lin, op. cit., p. l. 17The China Handbook Editorial Board, China Handbook, 1952-1953 (Taipei: China Publishing Co., 1952), p. 273. 95 8Economic Planning Council, Executive Yuan, The Republic of China's Sixth Four-Year Plan for Economic Development of Taiwan, 1973-1976 (Taipei, 1974), p. 119. 19Frederick H. Chaffee, et. al., Area Handbook for the Republic of China (Washington, D.C.: U.S. Government Printing Office, 1969), p. 251. 20Lin, op. cit., p. 64. 21Ibid., p. 65. 22The China Yearbook Editorial Board, China Yearbook, 1960—1961 (Taipei: China Publishing Co., 1961), p. 299. 3Economic Planning Council, op. cit., p. 119. 24The China Yearbook Editorial Board, op. cit., 1975, p. 313. 25Economic Planning Council, op. cit., p. 197. 26Ibid., p. 197. 27Chaffee, op. cit., p. 372. 28Ibid.,[).355. 29Ibid., p. 348. 30Ibid., p. 348. 31Ibid., p. 250. 321bid., p. 250. 33Ibid., p. 249. CHAPTER IV. HAI-NAN'S CHANGING POLITICAL AND ECONOMIC CONDITIONS, 1895-1975 Introduction This chapter analyzes Hai—nan's development patterns during the years 1895-1975. Hai—nan's economy experienced only minor changes in development patterns during this time, while the island's political climate varied considerably. Following the pattern established in the previous chapter, Hai—nan will be analyzed by the following political- historical time periods: The Disruptive Years (1895-1939), The Japanese Occupation (1939—1945), The Post—War Period (1945-1950), and Hainan as a Part of the Peoples Republic of China (1950-1975). The Disruptive Years: A Period of General Strife, 1895—1939 Economic Trends Constant changes in the political and economic environment of the island caused a period of general strife from 1895 to 1939. During this period Hai—nan's economy experienced little successful development. Al- though a number of development schemes were proposed and a few were started, none were completed. Hai-nan's economy in 1895 was based primarily on agriculture and remained so for the next 44 years. Using export figures as a guide to judge the total economy shows that agriculture, particularly sugar and animal products, dominated the island's economy. 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