2.1 The Composition of the Industrial Sector

      The census data show that Taiwan's industrial sector of four main industries: (1) mining and quarrying, (2) manufacturing, (3) electricity, gas and water supply, and (4) construction. The number and share of establishment units of these industries during 1954-1996 are listed in Table
1.
(Table 1 here)

     It is quite clear that the manufacturing industry has the lion's share; the percentage of this industry accounted for 92 percent in 1954 and remained around 85-89 percent until 1991; however, it declined to 76 percent by 1996. It is notable that the number of establishments in construction increased remarkably between 1991 and 1996; there was an increase of nearly 92 percent, compared to only 9 percent in manufacturing. Moreover, in terms of value added, which indicates the efficiency of industrial management, there was an increase of 2.5 percent between 1991 and 1996 for construction, compared to a decrease of 1.2 percent for manufacturing. (The 1996 Census, Vol. 1: 29-31) Apparently, the structure of the industrial sector was changed in recent years and as such the development of the construction industry requires further study. For this paper, however, I will limit the discussion only to the manufacturing industry with regional variation.

2.2 Classification by Regions

     In order to reorganize the data by region, this paper adopts the four-region divisions set by the Executive Yuan in 1968 with groupings of cities and counties as follows: (Liu Ts'ui-Jung. 1991:532)