Eyes On.... ASIA'S ECONOMIES: Case of Taiwan
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TAIWAN: CASE STUDY
"Increasingly, we live in a global economy," observes the National Council on Economic Education at the start of one of its content recommendations in A Framework for Teaching Basic Economic Concepts (1996). "What is done in ... [one] nation affects the rest of the world, and what is done there affects ... [the] nation. Economic issues associated with this trend must be analyzed by examining trends in trading levels, investments, foreign exchange values, and changes in public policies affecting these sectors. (20.10)"

In 1997, the world got a major lesson in the truth of that observation, when an economic crisis erupted in Thailand, dominoed across East Asia, and spread to Latin America and Russia before it was reined in. The crisis and its effects are profiled on the Student Text Page for this unit. So is the amazing story of Taiwan — a case study in survival.

CURRICULUM STANDARDS
In addition to serving the economics goal stated above, this unit should help you to address similar objectives in other social studies curriculums for Grades 9-12. Here's one from Expectations of Excellence, published by the National Council for the Social Studies. Thus, "the student should be better able to:

• "distinguish between ... domestic and global economic systems, and explain how the two interact" — from "Production, Distribution, and Consumption"

CRITICAL TERMS
Though the term is not always used, investment is a recurring theme in this unit's story. Thus, readers learn that, at the outset of the economic crisis in 1997, speculators made huge investments on the future exchange rates of Asian currencies (a kind of trading that Taiwan and its neighbors are now intent on curbing). Overall, "$80 billion in investment money" fled East Asia before the crisis was halted. And Taiwan's independent businesses are always "seeking new markets," which might involve investing in new product lines. Other terms you may want to preview: capital, currency value (price of currency), foreign debt, foreign-exchange reserves, free-market economy, global market, gross domestic product, product component, regional center, stock market, and strong currency.

DEEP BACKGROUND!
Students read that "Taiwan was the clearest survivor" of the recent economic crisis in Asia. That does not mean it emerged untouched. Its vital export trade with other East Asian economies, for example, declined almost 20 percent — a reflection of what was happening elsewhere in the region. What made Taiwan excel was its ability to overcome such problems.

The Student Text Page explores its recovery in some detail. (See the end of the "Taiwan... #1" segment and the paragraphs under "Funded, flexible, free.") You may want to tell students, too, that Taiwan has budgeted billions of dollars for new public works and high-tech information projects, as a means of increasing domestic consumption. And it continues to profit from its multibillion-dollar investment in mainland China's industries. Taiwan is among the top five sources of external funding for the mainland, with which it racks up billions of dollars in trade every year. TIP: Access to this unit's Asia's Economies Map Page and Asia's Economies Data Page will help students strengthen their concept of Taiwan's geographic location and its economic status vis-a-vis Hong Kong, mainland China, and other members of this vital world region.

EXPLORING THE ISSUES
Separating causes from effects — and effects from coincidences — is a critical-thinking skill that the topic of this unit demands, and that the following research projects may help students to attain:

1.   Broadening the picture. To balance this unit's focus on Taiwan, you might urge students to investigate why other East Asian economies were so vulnerable to the economic crisis that began in 1997. (Indonesia, for example, was troubled by political uncertainties.) An easy way to start this would be to urge students to consult the country listings in the current CIA World Factbook, and read the introduction to the "Economy" segment for each of Taiwan's neighbors profiled on this unit's Data Page. They'll find brief clues as to how the crisis affected these countries — as well as an indication of how well they're doing now.

2.   Strengthening concepts. The slide in currency values at the outset of the Asian crisis was, in the view of some, precipitated by the very speculators who rushed to trade in those currencies as their value was falling. To understand how currency values fluctuate, urge students to follow the dollar exchange rate of a selected number of currencies (perhaps those of the 10 economies profiled on the Asia's Economies Data Page) for several days or weeks. Have them rank these currencies periodically in order of preference for buying, or selling, them. In discussing the outcome, ask students to describe the probable impact on various sectors of a society (investors, producers, bankers, importers, consumers, etc.) whose currency's value is on a major downslide. What kinds of decisions would get priority? What remedies might be most desirable?

3.   Examining the literature. For a real challenge, some students might enjoy analyzing contemporary articles on the crisis. Encourage them to search for articles on the "Asian economic crisis," using an Internet search engine, such as FAST or Dogpile. Have them print out and read two or three such articles (you may want to preview the articles for level of difficulty). Then discuss: At the time, how did world economists explain the crisis? What predictions did they make? How have those predictions turned out? (For the latter question, consult current data in the World Factbook (see link above).

4.   Tracking Taiwan in the news. Taiwan is one of the world's major traders. Prompt students to track the outcome of its recent admission to the World Trade Organization (WTO — or, sometimes, WTrO). Encourage a small committee to be on the lookout for reports or bulletins on this topic and to post their findings on a bulletin board dedicated to the topic. And ask students to speculate on the impact of Taiwan's WTO membership on its relations with other world societies — with mainland China in particular. How might increased mutual trade affect the development of other kinds of links — in cultural, academic, and scientific matters, for example?

MORE SOURCES
If you haven't already found this link, be sure to bookmark the Hong Kong-based "Asia Times Online" for daily articles related to East Asian economies. (See the "Asian Economy" link on the site's Home Page.) To learn Taiwan's viewpoint on recent economic trends in Asia — and within its own borders — check the Web Page it devotes to Asia's Economic Crisis.

Are students having trouble with economic terms in this unit? Refer them to "Investor Words" for good explanations and helpful cross-links to related terms. Looking for a source on the value of another nation's currency? See the Universal Currency Converter.

And, to augment your shelf library on this unit's topic, try one or more of the following:

Blustein, Paul. "World Economy Passes from Crisis to Caution." The Washington Post. April 7, 1999. Page A01.

Kristof, Nicholas D. "Experts Question Roving Flow of Global Capital." The New York Times. September 20, 1998. Page 18. This article raises good questions about the impact of currency trading on developing regions.

Plate, Tom. "Commentary: A Miracle With New Correctives." The Los Angeles Times. August 30, 2000. Page B9.

Asia's Economies Student Text Page | Asia's Economies Map Page | Asia's Economies Data Page

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