Lutao Sophia

Among the chief economic policy-makers, K. T. Li is the most influential in Taiwan during the second half of the twentieth century. He served in important positions and guided industrial development, economic and financial policies, tax reform and development of human resources, all of which are determinants of Taiwan's dramatic economic growth. This book is built upon a detailed oral history of K. T. Li, and is further supported by archival research and other interviews. It helps readers to understand K. T. Li as well as the process of economic policy-making in Taiwan from 1953 to 1988.

List of Charts…………………………………………………………………………ix
Illustrations…………………………………………………………………………v
Foreword by Ezra F. Vogel…………………………………………………………xxxix
Preface………………………………………………………………………………xlv
Acknowledgements…………………………………………………………………xlix
Introduction…………………………………………………………………………1

PART I

The Education of Taiwan’s Godfather for the Development of Science and
Technology…………………………………………………………………………27

CHAPTER I

Childhood in a Gentry-Merchant Family in Nanjing (1910-1926)…………………29

Li’s Family and Education in Chinese Classics……………………………………30

The Experimental School of the Nanjing Senior Teachers’ College - a Modern
Deweyan Child-Centered Elementary School………………………………………34

The Zhongying Middle School - the Cradle of a Young Mathematician……………37

CHAPTER II

The Education of a Scientist in China and England (1926-1937)…………………41

From Southeast University to Central University, from Mathematics to Physics………
……………………………………………………………………………………42

Teaching Physics and Mathematics at Ginling Women’s University………………49

The Examination for the Sino-British Indemnity Scholarship………………………53

K. T. Li and the Cavendish Laboratory of Cambridge University…………………54

CHAPTER III

Making Science Serve China During the War (1937-1945)………………………59

Could a Physicist Fight a War?……………………………………………………59

Observing the Full Eclipse of the Sun in Northwest………………………………65

Li as a Manager of the Labor Department of the Ziyu Iron and Steel Mill…………66

The Iron and Steel Committee at the National Resources Commission……………70

PART II

The Practical Training of a Technocrat……………………………………………73

CHAPTER IV

Ship-building in Shanghai and Taiwan (1945-1953)………………………………75

Maobo Zhou, K. T. Li and the Construction Office for the Central Ship-Building
Corporation (1945-1948)…………………………………………………………75

Taiwan Ship-building Corporation – From a Novice to an Innovator……………79

CHAPTER V

Industrializing with Few Entrepreneurs - Industrial Development Commission
(1953-1958)………………………………………………………………………87

Taiwan’s Economy and Economic Policy-makers in the 1950s…………………88

K. Y. Yin and his “Planned Market Economy”…………………………………97

K. Y. Yin, K. T. Li and the Industrial Development Commission…………………104

The Industrial Development Commission and the Foreign Exchange Reform…………
……………………………………………………………………………………112

The Beginning of Li’s Career as an “Economic Diplomat”……………………115

PART III

A Technocrat’s Economic Policy…………………………………………………123

CHAPTER VI

Liberalizing the Economy during the Period of Military Mobilization - the Council for
US Aid (1958-1963)………………………………………………………………125

The Dissolution of the Economic Stabilization Board and the Reorganization of the
Council for US Aid………………………………………………………………127

The US’s Taiwan Policy in the 1950s……………………………………………130

K. T. Li and “How to Make a Bigger Pie”………………………………………133

August 7th Flood in 1959 - How to Turn a Natural Disaster into a Blessing for
Taiwan’s Economic Development………………………………………………137

The Formation of the 19-Point Program for Financial and Economic Reform…………
……………………………………………………………………………………139

The Statute for the Encouragement of Investment, its Formulation and Implementation
……………………………………………………………………………………143

A Sick Leave in the United States and an Appreciation of American Culture…………
……………………………………………………………………………………149

CHAPTER VII

Promoting Independent Economic Growth - Council for International Economic
Cooperation and Development and Ministry of Economic Affairs (1963-1969)…153

How to Accelerate the Growth of Exports………………………………………154

How to Control Population Growth and Cultivate Human Resources……………160

Studying the Principle of People’s Livelihood as the Minister of Economic Affairs
…………………………………………………………………………………162

Promoting International Economic Cooperation…………………………………167

Science and Technology Exchange between Taiwan and the US…………………171

Conversion to Christianity to Cleanse the Mind…………………………………177

CHAPTER VIII

Simultaneously Achieving Wealth, Equality and Stability - Ministry of Finance
(1969-1976)……………………………………………………………………181

Pluralization of Taiwan’s Finance……………………………………………184

The Man Behind the Tax Reform………………………………………………186

The Reform of Tax Administration……………………………………………191

The Centralized Disbursing System……………………………………………192

Adjusting Interest Rates at the Opportune Time to Control Inflation……………194

How to Manage the Oil Crisis under Chiang Ching-kuo’s Iron Fist……………195

CHAPTER IX

Making and Implementing an Appropriate Science and Technology Policy to Sustain
Economic Growth, to Promote People’s Livelihood, and to Achieve Self-Reliance
in National Defense - Minister without Portfolio (1976-1988)…………………203

The National Conventions for the Development of Science and Technology and the
Science and Technology Advising Group of the Executive Yuan………………206

The Program to Cultivate and to Attract Science and Technology Manpower………
…………………………………………………………………………………210

Strategic Industries and the Development of Information Industry………………213

TSMC……………………………………………………………………………220

CHAPTER X

The Taiwan Experience and Lesson………………………………………………225

The Taiwan Experience in Summary -- Appropriate Timing, Appropriate Policies…
…………………………………………………………………………………227

The Ethical Foundation of a Modern Society – the Sixth Relationship…………228

Notes……………………………………………………………………………233
Selected Bibliography……………………………………………………………243
Index……………………………………………………………………………247