COMM 376 Lecture Notes - Lecture 13: Wistron Corporation, Semiconductor Manufacturing International Corporation, Pegatron
Document Summary
Fundamental idea: taiwan handled the asian financial crisis better than others because of a paranoia about mainland china. This paranoia has led taiwan to have a proportionately large defence budget, overseas propaganda efforts, and at times even martial law. While neighbours had recession, taiwan grew 4-5% through 1998. Taiwan"s losses in currency and stock markets were only half of what neighbours experienced. Because taiwan has limited diplomatic relationships, it cannot engage in risky behavior with the security of the imf bailing it out. There is a fear that an economic collapses could mean civil unrest or invasion. Therefore taiwan"s leadership is very pragmatic (built up large foreign reserves through boom years, low bad-loan ratios among banks, and companies have low debt- equity ratios, maintained some currency controls. The crisis exposed the tigers, ending efficacy for the taiwanese model; but they will find it hard to copy.
