In 1624, when the Dutch established a trading post in Tainan, the indigenous economy in Taiwan was a combination of hunting and farming. During the Zheng and Qing dynasties, Taiwan transformed into an agricultural economy, but it experienced prolonged stagnation.

After becoming a Japanese colony in 1895, the colonial government initiated comprehensive infrastructure development, including a land census, improvements in public health, and the modernization of the transportation system. Taiwan underwent a transformation into a market economy, leading to a noticeable increase in people’s income.

Following the end of World War II and the Nationalist government’s takeover of Taiwan, strict economic controls were implemented, resulting in economic stagnation. Fortunately, during the period of U.S. aid (1950-1965), under American influence and pressure, Taiwan shifted back to a market economy system, and continuous high growth occurred in the early 1960s.

The remarkable economic growth in Taiwan over the 40 years of the late 20th century is considered a miracle by scholars. However, when viewed from the perspective of long-term development since the Dutch period, Taiwan’s experience provides clear evidence that a free-market system is more conducive to economic growth than strict controls.