A Person Changes an Economy: Yin Zhongrong and Taiwan’s Economic Transformation

Many people think that Taiwan was originally a market economy. In fact, the original philosophy of the Kuomintang (KMT) was to “restrain private capital” and “develop national capital.” Taiwan was still a typical planned economy in 1949. Mr. Yin Zhongrong assumed the position of deputy director managing manufacturing businesses in Taiwan. He reformed public enterprises, implemented down-sizing, increased efficiency, and expanded production. At the same time, he used various economic means to support strategic industries. In 1954, Mr. Yin took office as minister of economic affairs and advocated the relation of government control, development of private enterprises, and reform of foreign exchange trade. Since then, he became a spokesperson for the privatization and liberalization of the Nationalist government, calling for economic reforms to quickly integrate Taiwan’s economy with global markets.

During the reform process, Yin was met several debate challenges and faced backlash from vested interests, conservatives, and ideologues within the KMT. The debate brought about changes in economic thinking, and KMT leaders began to change their minds. In other words, “restraint” of private capital need not amount to restriction; restraint may be practiced as sensible mediation and regulation. After taking office as minister of economic affairs, Yin strived to implement privatization, including that of various state-owned enterprises in cement, paper, forestry, and mining, by means of economic regulation. He also used American aid to expand trade relations with Japan, which led to the growth of small and medium-size businesses and economic prosperity.

This series of reforms and transformation brought Taiwan three decades of rapid development and served as a driver for important social and political reforms. Professor Kuo Tai-chun will present the life and work of Yin and his team of economic reformers. In addition, she hopes to shed light on how Taiwan may break through current economic difficulties and find proper strategies through reform.