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When Taiwan's modern growth epoch began in the 1950s, the dominant strategy chosen was import substitution. On the one hand, it imported raw materials to produce commodities needed. On the other hand, it protected the domestic industries. Around 1960, because of the success of relatively neutral incentive policies, which had supported import substitution, domestic market had been satisfied for many goods. The prospects of further using import substitution strategy were considerably less rosy. As a result, Taiwan made a critical decision, switching import substitution to export-oriented strategy, which altered the structure of production...
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