After the Second World War, Taiwan returned to Chinese National Government control and after a short period of political turmoil and hyperinflation, production activities gradually resumed. Calculated in 1986 prices, the total industrial production value in 1953 was NT$63,721 million which surpassed the highest amount ever reached in the colonial period, NT$52,850 million in 1942. It was in 1953 that the government began to undertake the first four-year economic planning project, which was consequently succeeded by later projects..

     From 1953 onward, the government\\'s industrial policy could be traced in three phases: (1) the import-substitution phase from 1953 to 1960, (2) the export-expansion phase from 1961 to 1972, and (3) the phase of industrial structure from 1973 and onwards. The third phase could be sub-divided with 1978 as a landmark; the fist sub-phase emphasized a general development of chemical and heavy industries while the second one pursued development of strategic industries.

     The industries promoted by the government in the 1950s were labor-intensive ones such as textile, food processing, leather, rubber, and plywood manufacturing to substitute for imports. During 1961-1972, the industries promoted were mainly for exports, and some of them, such as plywood, cement, sheet glass, plastic, and textile had already developed in the previous phase for substituting imports and were now encouraged to expand into foreign markets under the regulation for promoting investment that was announced in 1960. In addition, some industries were only newly promoted for export, such as canned mushrooms and asparagus, and electronic parts. Third phase began with ten major construction project initiated in 1973 and further reinforced with an announcement in 1979 to undertake a ten-year planning project from 1980 to 1989. Thus industries of iron and steel products, shipbuilding, machinery, electric and electronic machinery, communication equipment, and motor vehicles were all strategically promoted.

     With the time series data provided by Yeh, the total industrial production value (TIPV) and industrial gross domestic products (IGDP) during 1902-1990 were calculated in natural log and depicted in Figure 1; their growth rates are in Figure 2. It can be seen clearly that both TIPV and IGDP grew faster, except during the two world war periods, and the growth rates appear to be more stable after the 1950s than before. Moreover, Figure 3 shows the shares of light and heavy industries as well as that of sugar manufacturing during 1912-1942, while Figure 4 has the shares of light and heavy industries in 1961-1990.