Conflicts between polarized contingents and belligerency about opposing ideologies have filled China’s history. For instance, the Chinese Civil War that began in 1927 resulted from a political clash between two groups that politically and ideologically opposed each other: Nationalism, led by the Kuomintang (KMT), and Communism, led by the Communist Party of China (CPC). While the Nationalists were rooted in Sun Yat-sen’s teachings- mainly, his Three Principles of the People that enumerated the moral and structural foundations of the KMT government- the Communists were led by Mao Zedong, who embraced a Marxist form of governance. After an eight-year intermission, during which the parties focused their efforts against the Japanese invasion, the Civil War re-intensified. In 1949, the CPC emerged from the conflict victorious, thus forcing the Kuomintang contingent, including many of the intellectuals and wealthy citizens of the Mainland, to retreat to the island of Taiwan. This geopolitical separation begs a question whose answer may assist the present-day populace in improving its future economic condition: to what extent did the events of 1949 to 1969 result in an economic dichotomy between Taiwan and Mainland China that favored one economy over the other?
From 1949 forward, the CPC on the Mainland and the KMT in Taiwan commenced the rebuilding and restructuring of their respective economies, with their own respective strategies, that progressed into the mid-twentieth century. Though their opposing political ideologies would suggest otherwise, these strategies were initially not all that different; they were both focused on agricultural, industrial, and land reform on a reconstruction footing. The continuation of economic development into the 1960s, however, brought the differences that would eventually set the Mainland and Taiwan on separate fiscal paths. Mao’s policies, as influenced by Soviet ideology and seen in the First Five-Year Plan, the Great Leap Forward, and the Cultural Revolution, both indirectly and directly set Mainland China on a path to economic downturn. Meanwhile, Taiwan developed a stable economy that maintained balance between industry and agriculture, and rose above the unfortunate state of the Mainland. Thus, the events of the 1950s and 1960s brought a dichotomy between the economies of Taiwan and Mainland China, which caused the Mainland to experience less industrial and agricultural success than Taiwan as a result of its government’s radical economic policies.
Immediately following the CPC victory on Mainland China and the retreat of the KMT to the island of Taiwan, reconstruction of both the Mainland and Taiwan began. The initial conditions of national rehabilitation seemed to begin in Mainland China’s favor; its natural resources were far superior to those of Taiwan, with resources such as iron ore, coal, petroleum, molybdenum, asbestos, and pyrite deposits, in addition to the minerals and metals...