The impacts of increasing industrial production in LEDCs.

Taiwan was an area included in the economic core area and is an example of increasing industrial production in an LEDC. In 1945, after many years under the Japanese Government, Taiwan once again became part of China. In 1950, Mao Tse-tung communists drove the Nationalist Chinese out of mainland China. These followers and their leader Chiang Kai-shek then occupied Taiwan and he kept the country under military law until July 1987.

Taiwan is a small island with a population of 20 million and an average density of 536 per sq. km. The western coastal plain is the only large area of flat land and industry concentrates here especially in the capital Taipay and the Free Trade Zone of Kaohsiung. There is little suitable land for building in the centre and the eastern coast as these areas are very mountainous (over 4000 metres).

Taiwan’s miraculous growth was not only due to the aid and help given to Taiwan from the USA, but due to import substitution (that is the manufacture of goods previously imported for sale on the national market.); export promotion (using FTZ’s and EPZ’s); and cheap labour. Other contributing factors had an effect on the growth of industry and will now be discussed.

Overall, the impacts of increasing industrial production have been mostly positive. However, we must consider and act on the negative environmental factors if the industrial production is to increase and remain in Taiwan and even though ‘global forces’ and the ‘free trade market’ are fundamental to economic change, the importance of the government policies can be paramount.

The impacts of increasing industrial production have had a major effect on the economic factors. In 1998, manufacturing accounted for 78% of the total industrial production and 26% of the national workforce. There are 12 Transnational companies in Taiwan with a total market value of over US$25 billion. There has been an increase in the number of developed companies with companies overseas in Taiwan and the development is still growing. Although these impacts have effected the economy of Taiwan in a great way, there are possibilities of the Transnational Companies pulling out, therefore leading to job losses, and the companies moving away. Also, as there is more machinery in the industrial production, it has meant that many thousands of people have become unemployed.

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