Starting from the premise that Taiwan's success in the global economy is not a miracle, the authors of this timely and relevant book give a scientific view, backed by historical, geographical and political circumstances that contribute to the outstanding achievements of the Taiwanese people. The book begins with the Japanese colonization of the island and good governance that provided a foundation for success. Taiwan emerged from the 1997 financial crisis unscathed while other Asian neighbors were deeply affected. Some, like Korea, have had to endure the humbling interference of the International Monetary Fund to boost their economies. Edited expertly by Peter C.Y. Chow, studies and writings from a dozen highly respected scholars expound on the theme that Taiwan's solid economic performance has made it a reliable partner in the global market.

In the final chapter on the theme "From Dependency to Interdependency," tracing four decades of arduous economic effort, Chow states that the Taiwanese government and its entrepreneurs, both in private as well as in public sectors, have made the country what it is today through pragmatic and consistent shifting of policies to adjust to the demands of the world market.

"It is not an over-exaggeration to argue that Taiwan could serve as a role model for many developing countries in its struggle for development and its transformation from an agrarian economy dependant on industrial core countries to a newly industrialized country with a high degree of interdependency with the OECD," he says. With decades of consistent growth behind it, Taiwan is a newly industrialized country trading with OECD countries and its citizens have per capita income higher than those in some of these very same trading partner nations.

Chow says the economic path was not dictated by a single theory or model, but by the government and people on the island and their pragmatic approach to solving their problems and creating their economy.

What has helped Taiwan attain that position is first explained by Gustav Ranis who believes that Taiwan's success was "neither miracle nor crisis." Rather, it was due to a combination of factors that contributed to successful economic development, in which mistakes were made and corrected, and lessons and experiences learned. Taiwan was a Japanese colony for more than 50 years, ending with the latter's defeat at the hands of allies in World War II. The favorable initial conditions created by Japanese colonization no doubt set the stage for the start of economic development, which included land reform based on "growth with equity" that has taken into account the interests of farmers, building of an infrastructure, agricultural research and education. Taiwan's lack of natural resources has from the beginning convinced the authorities to focus on the importance of human development.

Poverty was gradually reduced and income distribution increased over the years while the country built its system of political democracy. One should remember also that assistance from the United States in the post World War II period constitutes a significant factor in the economic development of the island even though it remains under constant threat from mainland China. Why Taiwan has decided to invest so heavily in China is explained in the chapters dealing with foreign direct investment and Taiwan's global economic strategy. Taiwan cannot ignore the so-called "China factor" while it expands its economy on a global scale. Authors Frank S.T. Hsiao and Mei-Chu W. Hsiao expound on the significance that geographic location determines the interdependency of economy and politics. Taiwan may be a small country, but its economy is major. Both argue also that mainland China's territorial claim over Taiwan is "tenuous at best," and the two countries across the Taiwan Strait would be better off, economically at least, if they can find a civilized way to settle the dispute.

The emphasis on Japan's colonization in explaining Taiwan's economic success is heavy in this book despite the pain taken by the authors to explain the effects of many other factors on economic development, such as the human development, political strategies and business skills of the Taiwanese. Teruzo Muraoka says "Japanese imperialism" played an important role, calling Japan the "Last Empire" and Taiwan the "Initial Colony." Both drew benefits from the relationship. Muraoka makes comparisons with Korea, which was also colonized by Japan. He contends that Taiwan developed a monoculture - rice and sugar - in the initial stage of trade with Japan. But Japan used its trade surplus in that monoculture to carry out its occupation of the Korean peninsula and three provinces in northern China before World War II. He argues that Japan's occupation of Taiwan was prompted decades ago by the existence of the vast Chinese market, but it did not prevent Taiwan and Japan from enjoying a mutually beneficial relationship.

"As for the future of that relationship, it would depend on the development and change in the China market," Muraoka says. He says a further study of the Chinese market is as important as the historical study of "Japanese imperialism and Taiwan colonization."

Both Taiwan and China are now WTO members, which will enable them to deal with each other within an international forum.