lly beneficial trade relationship.
As noted earlier, Taiwan is the 20th largest economy in the world and is the 13th largest trading nation, boasting a fiscal year 1993 trade surplus of $10 billion. Real growth in the Gross National Product (GNP) has averaged 9% yearly (since 1971 according to some sources, for the period 1952 to 1993 according to other sources - still other sources reduce the average growth to 8% yearly ). Taiwan currently holds foreign exchange reserves of circa $91 billion - more than any country except Japan. In 1993, Taiwan ranked 9th in overseas investments.
As a result of this strong position, Taiwan is virtually free of foreign debt; in 1992 external debt was only $620 million. Taiwan's debt service in general is minimal: in 1993 debt service payments totalled $1.8 billion, accounting for only 1.9% of export of goods and services.
The general profile of the current economy has Manufacturing accounting for 40% of Gross Domestic Product (GDP), with the fast-growing Service sector up to 45% of GDP in 1994. Agriculture accounts for a mere 4% of Taiwan's GDP.
That was not the case when the Republic of China first set up its government-in-exile on Taiwan in 1949. Still ravaged by fifty years of Japanese occupation and exploitation, Taiwan was primarily an agricultural economy that year, when refugees from the mainland civil war once again disrupted the island's stability. The geopolitics of the Cold War (and the nearby "hot" Korean Conflict) resulted in massive infusions of U.S. foreign aid into the economy, but Agriculture still accounted for 35% of GDP in 1952.
During the next two decades, Taiwan's economy benefitted from the Cold War in two ways: first as a result of "Red" China's virtual economic isolation from the developed economies of the world, second as a result of U.S. expenditures related to "containment" policies - heightened during the U.S.'s 1960s involvement in ...