THE MAIN CHALLENGES AND CONSTRAINTS OF THE ECONOMIC DEVELOPMENT OF TAIWAN
Beyond a comprehensive review on Taiwan's economy, the main objective of the present study was to find answer to two questions. The first issue is whether Taiwan followed a classical model of the Asian Newly Industrializing Economies (ANIEs), or in spite of similarities at first sight, it rather had its own, individual way of development. To examine this question the author made a comparison between Taiwan and the Republic of Korea (South Korea) and beside the obvious similarities, a number of significant differences were found. The other main question this study was focused on is the present and future economic and social challenges which influence Taiwan's future development as well. From among these characteristics the author pointed out the issue of the high exposition (especially in terms of FDI) and growing dependence on mainland China (the People's Republic of China), the need for a shift in terms of the main drivers of the future economic development to preserve Taiwan's competitiveness and mitigate the risks of brain drain and social unrest. It looks evident that Taiwan has to give up insisting to the principle of low labour costs, and this may give impetus to the two-decades long salary stagnation and to the domestic consumption. Taiwan may only be competitive in the future if it gave an increasing focus to the domestic R&D and innovation in the new industries and also puts more emphasis on sustainability.