ABSTRACT Japan’s victory in the Sino-Japanese War of 1894-1895 lead to 50 years of colonial rule of Taiwan. The industrial hardware facilities and equipment left behind by the Japanese withdrawal from Taiwan after the World War II (WWII) provided Taiwan with a basis for industrial development. The frequent economic exchanges between Taiwan and Japan economies, even before the Second World War, became stagnant with the withdrawal of Japan from Taiwan after the war. Afterwards, due to the outbreak of the Korean War, a large number of special needs promoted the rapid growth of the Japanese economy, which led to the economic development of Taiwan and other Asian countries. Once again, Taiwan and Japan were economically joined and exchanges became even more active, as compared to the situation before World War II. The success of Taiwan's economic development still cannot escape the trade and economic development model highly dependent on the United States of postwar Asian countries, in particular, foreign capital is a very important factor. Japanese capital, ranking the second place in foreign investments in Taiwan, is one of the indispensable factors. On the other hand, the opening up of the Chinese market has given a great deal of room for cooperation between Taiwanese and Japanese enterprises adept in direct investment.
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