Chuan Lyu Lectures
University of Cambridge
Faculty of Oriental Studies
5:00PM, Tuesday, May 11, 1999
at the Faculty of Law, University of Cambridge

Subject: Can Taiwan's Economic Miracle Persevere? An Examination of Its Past and Future

By: Mr. Li-Pei Wu
Chairman & Chief Executive Officer
GBC Bancorp and General Bank, Los Angeles

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I.INTRODUCTION

Taiwan's Economic Miracle

     We all have head about Taiwan's economic miracle. Just what is so miraculous about this miracle? Chart 1 shows some very spectacular statistics. Other than a little blip caused by the Oil Crisis, in the last 30 years Taiwan's annual real GDP growth has maintained within the range of 5-12% while keeping the unemployment rate below 3%, and a low inflation rate. The extraordinary accumulation of foreign exchange reserve is another good indication of Taiwan's competitive edge in the world market and its ability to create national wealth. Whether compared to other developed or developing countries, these statistics qualify to be considered of miraculous proportions.

     As a lifetime banker, I spent three decades in Taiwan personally witnessing these economic changes unfold. I then spent another 30-some years in America helping my bank clients here and those inside Taiwan carry out transactions here and there. I believe as a long-term observer I have good insight as to how and why this economic miracle could have happened the way it did, in spite of the fact that Taiwan is but a small island nation of now 22 million people, and extremely lacking in natural resources. I can still remember how poor we were growing up, and when you look at Taiwan today, you have to admit it has come a long way. I was there every step of the way, and I will go beyond the surface to examine the past, the present, and offer my future perspectives.