The Taiwan Miracle

Written by Peter Li-Chang Kuo

By 2026, I have reached the age Confucius (551-479 BC) spoke of, an age at which one should speak the truth plainly — without putting makeup on anyone’s face or polishing anyone’s image.

Compared with Confucianism, I place greater faith in Guan Zhong (Guanzi, 725-645 BC)’s philosophy of governing the people: “When a nation is wealthy, those afar will come; when land is opened and opportunities abound, the people will stay. When granaries are full, people understand propriety; when food and clothing are sufficient, they understand honor and shame.” It was for this reason that I devoted all my strength to helping my wife Linda Din (Ding Lin-Hong) realize the “Rich Taiwan Plan.”

The price paid is beyond anything most people could imagine. To explain it, I must begin with my background.

During the Lunar New Year of February 1966, a Bing-Wu Year, my father (aka A-Kun) said to me, “From now on, this family is your responsibility.” Immediately afterward, he was arrested and taken to the jail of Hsin-Sheng Street. I was not yet thirteen. I founded "Cheng Kuang Metal Works" at the Kuo-Ming Market and worked at least twenty hours a day. Not only did I ensure that no one went hungry, I even made sure he had Japanese Fuji apples to eat every day. In truth, A-Kun never tried tto study and relied entirely on raw talent and impulse. He had long ceased to support the family; we lived off my grandmother’s tiny paper-cutting scissors. Whether he “handed over responsibility” or not made no difference to my commitment to Guanzi’s principles.

Because Mr. Chen Yong-Tian once helped me when I was in hardship, I repaid him once I had the means—until he successfully developed a "Portable Transistor Tape Recorder," secured orders from Jewish buyers in the United States, and built a massive factory near the Yongkang Interchange. At the celebration banquet, slightly tipsy, he said to A-Kun, “Old Kuo, how did you end up with a son like 'Brother Li-Chang?' Why don’t I have one?” Astonishingly, A-Kun could not swallow this and regarded me as an enemy. Even after I founded two companies and made him chairman, he still chose to play the role of a modern "Heart-blind Elder."

Looking back to November 1966: within two days, I produced from nothing "precision eyelet samples" for an American firm (Avnet), followed by the classic "Approval Sheet" —which nearly stumped two professors at National Cheng Kung University, Yao Jing-Bo from Electrical Engineering and Ma Cheng-Jiu from Mechanical Engineering. The order was secured, NASA’s "PTH" concept was realized, and Apollo 4 flew into space. More than a hundred local townspeople helped along the way — yet A-Kun and A-Jin shouted all day long: “You animal—can’t even survive on your own, yet you think you’re fit to deal with Americans? You don’t know your place, and one slip up and they’ll cut your balls off and make you disappear.”

Even under such pressure, I held fast to my own vision. I helped Americans succeed in starting businesses in the Kaohsiung Export Processing Zone (KEPZ) and earned from them the nickname “Dr. Blacksmith.” With that income, I paid off A-Kun’s long-standing debts at the Yamuliao market and gave the family the first decent New Year of our lives. Soon afterward, foreign firms in KEPZ all came to buy precision eyelets from me; money flowed in, and A-Jin even brought in "male consort." Then, I quickly moved away from the mocked Chong-An Street to a house on Park Road, giving my younger brothers a better environment to grow up in.

Most importantly, my grandmother—who had endured decades of humiliation—was able to spend her final two years living in a house I built myself.

By 1974, when Chiang Ching-Kuo came to inspect my "Cheng Kuang Precision Industrial Co., Ltd.", I already had an army of automated machinery and vast reserve land. He called me the “Father of Taiwan’s Precision Industry.” Mei Ke-Wang, then Secretary-General of the National Youth Commission, Executive Yuan and later President of Tunghai University, recalled Chiang’s special instruction at a cabinet meeting to “pay attention to precision industry in Tainan.”

In my view, however, Chiang Ching-kuo was not only an executioner of the White Terror but also remarkably foolish. Upon taking office as Premier, he ordered private steel mills to stop producing and selling tool steel. The reason I could make precision eyelet samples for Americans in two days was that a small steel mill in Mr. Isisan custom-made tool steel for me, enabling precision deep-draw continuous stamping dies. Chiang’s "Steel Ban" severed Taiwan’s most critical core technologies.

In the 1970s, without the privately developed "portable transistor tape recorder industry," Taiwan’s economy would have collapsed long before—let alone the “Ten Major Construction Projects.” Yet we remained vigilant. Around that time, an American deeply fond of Taiwan, Mr. Dieska, worked with me to develop many products—AV jacks, antenna terminals, headphone sockets, European-standard connectors (DIN jacks), even radar speed detectors. Ultimately, we chose "satellite receivers and cable television" as the next-generation flagship products. Unfortunately, my conscription as a 26th-term reserve officer delayed the entire plan.

In 1972, to make A-Kun chairman, I founded "Baisheng Metal Industrial Co., Ltd." in Yong-Kang and met my neighbor Mr. Chang Li-Tang of “Cheng-Yi Paperware Factory.” He later became Mayor of Tainan. To implement Chiang’s “people-to-people diplomacy,” we established sister-city ties with San Jose in 1974, building a direct bridge between "Taiwan and Silicon Valley." My Cheng Kuang Precision Industrial Co., Ltd. became a window—or façade—for technological diplomacy, where visiting IBM engineers and I discussed, in a hall facing the Yanshui River, what the future "Personal Computer" (PC) should look like.

On January 25, 1977, Chiang Ching-Kuo inexplicably invited me to breakfast and gave me these words: “The fiercest storms cannot drown a confident person… the most ruthless enemies cannot defeat a determined one.” Even so, I still had to obediently waste my life in the barracks until my discharge in 1978.

After discharge, I earned "six million NT dollars" and immediately increased Cheng Kuang Precision’s capital from one million to six million, handing all the money to A-Jin as “settling-in funds,” asking her to ensure my younger brothers could study. Then, on the very day Jimmy Carter unilaterally severed diplomatic ties with Chiang Ching-Kuo, I risked my life to go to the United States—facing unknown fortunes, with "SSC" quotas shifted to the PRC.

Because an American named Christopher visited Taiwan and was pelted with eggs, Taiwan was then likened to “Tehran.” No one dared come. So I had to go to the United States—only then could there be six million for A-Jin to manage. And it was during my risking my life abroad that this “modern heart-blind elder couple” plotted a human tragedy.

During my travels, I met a middle-aged lawyer who stood 202 centimeters tall — William H. Gates Sr.. Facing an America governed by Jimmy Carter, he sighed and said, “If only I had five thousand dollars in cash right now.” In fact, I not only had US$500,000 in hand, but also a newly developed product line of “satellite receivers and cable-television systems,” and the experience of creating Taiwan's Precision Industry.

Fig 1: William H. Gates Sr. and Li-Chang Kuo

My American friends were astonished that I could rely solely on items sold at ordinary "Hardware Stores" to fabricate tools, fixtures, jigs, and molds, and complete full new-product development. When I visited Mr. Dieska at his home in Santa Barbara, his two sons asked me, “Do you know Bruce Lee?” When they mentioned that Bruce Lee had a powerful weapon, I immediately walked into the garage and made a pair of "Nunchaku" for them on the spot. The brothers proudly invited a crowd of classmates to see it and discovered that what they had seen in the movies was real. Their younger sister, Annie, said that I truly resembled "Apostle Peter."

Fig 2: Annie Dieska and the Apostle Peter

One day, while I was reading a book titled "Home Computer," Mr. Dieska and I discussed the future development of artificial intelligence (AI). He was surprised that I read books page by page, cover to cover. Fully aware of my capabilities, he hoped that during the economic downturn I would remain in the United States, cultivate my own followers and believers, and believed my future should lie in America.

I traveled from New York to Silicon Valley, then from Seattle to Boston, helping some people and confirming that America was indeed a better place to make my mark. So I made a five-year plan — first, to get a doctorate and become a true "Dr. Blacksmith," and then to build my network through schools and churches for any eventuality.

Unexpectedly, when I called back to Tainan, a piercing scream exploded from the handset. A-Jin shouted, calling herself “your father,” “You unfilial son—bring your father back here, immediately!” I ran into the China Airlines office in San Francisco and bumped into a girl named "Yin Xia." I bought a ticket and rushed back to Taiwan. When I went abroad, I took a small plane from Song-Shan Airport to Narita, then transferred to a Boeing 747 to the United States. When I returned, the plane landed at Chiang Kai-Shek International Airport — at last, Taiwan had an airport worthy of the name.

To my disbelief, A-Jin gave me three months to marry a woman I had never met. Then, on May 4, 1980, she impatiently launched a bloody property-seizure coup—later referred to as the “New Xuanwu Gate Incident.”

During this incident, some people believed I should bring matters to a final end. Everyone knew that "Cheng Kuang" was an enterprise I had built from nothing, yet it had been handed over to “unsavory people as chairmen” — trouble was inevitable. But in order not to let the Kuo family become the laughingstock of Tainan once again, I chose to leave quietly and apply for a position at a Taipei firm called "Chia-Hsin Electronics." During the interview, someone joked, “The famous ‘Father of Taiwan’s Precision Industry,’ Dr. Kuo—why are you applying to be an engineer?” That conversation eventually led a group of us to the Leofoo Hotel, where a new startup plan was born.

At the end of 1979, I helped a friend surnamed Wang develop a " Cooling Fan." By 1980, after renting a place for only a few months, he went to Hsi-Gang and purchased a large factory. After I left Cheng Kuang, however, A-Kun astonishingly began manufacturing cooling-fan components. Within months, he squandered all the large sums of money I had left behind. In November 1980, he even sought out my wife, Linda Din. Young and inexperienced, she delivered a long lecture on “filial piety,” urging me to return and "rescue Cheng Kuang."

I had been gone only a few months, yet the “modern heart-blind couple” (my parents) had completely destroyed the customer base and production lines I had painstakingly built, converting vast sums of money into cooling-fan parts they could never sell in their lifetimes. I immediately transferred funds back from the United States to stabilize operations, while Linda rushed to apply for "tax rebates," earning "five million NT dollars" for them to squander. Just as everything returned to normal, all my money had been converted into “Cheng Kuang deposits.” My parents — who took pleasure in fratricidal destruction—once again joined forces with their son and launched another property-seizure coup. This time, not only was I completely stripped of everything, but I also lost a precious unborn life.

From that moment on, Linda devoted herself diligently to morning and evening prayers.

The Origins of Inventing the TES New Commercial Mechanism

In the depths of heartbreak, an opportunity arose through the enterprise founded by “Ruth Handler” —Mattel—that allowed me to leave southern Taiwan for Taipei, thereby spreading precision manufacturing to northern Taiwan.

In November 1982, on my very first day at MLT (Mattel Ltd. Taiwan), it took me only five minutes to resolve the problem with Ruth Handler’s invention, "See & Say." Then, in just ten seconds, I sketched a "two-piece leg armature" design in the hope of curing Barbie’s long-standing leg defects.

Fig 3: Li-Chang Kuo's “two-piece leg armature”

The two-piece leg bone separates the upper and lower sections; one mold produces four sets connected by runners. It also uses my invented AV-jack assembly machine—the "Sliding lower-die Punch Press" —as a degating machine. In “15 seconds it produces four legs,” solving the problem of children snapping Barbie’s legs.

Fig 4: Li-Chang Kuo’s Sliding Lower-die Punch Press

When I entered the original "three-piece leg assembly shop," I saw large numbers of female workers clamping two upper-leg pieces around a lower-leg piece, pressing the three parts together with brute force, steadying them with the left hand while hammering them into position before ultrasonic welding. It took “15 minutes to make one leg.” Every worker’s fingers were wrapped in tape, injured and deformed from constant pressure. This was the hidden cost of Taiwan’s bonded factories attracting foreign investment — girls in the Kaohsiung Export Processing Zone (KEPZ) had even lost their lives.

I initially assumed that MLT’s senior management—known as ABP (Ake Larsson, Bier Auer, and Pete White) — would quickly adopt my "two-piece leg semi-automated system" to replace the inhumane, labor-intensive, and defective three-piece leg process. Instead, ABP told me: “The three-piece leg was designed by a guy who was a designer of ‘HAWK missile.’ It can’t be changed casually — it must be evaluated in the United States.”

I wrote a full report and included my new "two-piece leg design" along with the "sliding lower-die punch press" used as a degating machine. Astonishingly, they spent hundreds of thousands of U.S. dollars and nearly a year in the United States, only to ship back a 100-kilogram wooden crate. When opened, it contained a module packed with "one hundred steel pins." Seeing this, I immediately explained the fundamental flaw to ABP, but instead they ordered me to build a "pneumatic press" for trial molding. To prove its infeasibility, "my left palm was crushed," nearly destroyed.

Knowing that I had founded Taiwan’s precision industry and was well versed in "Occupational Safety Law," ABP panicked and halted the project. However, because MLT was responsible only for "manufacturing," every process collapsed— "from hair, head, face, and body to the legs" —scrap rates skyrocketed. Costs exceeded selling prices, and factory closure plans were initiated.

The irony was that after spending vast sums in the U.S. to “develop” a design I had conceived in ten seconds, ABP claimed they lacked "NT$240,000" to complete my mold and semi-automated system in Taipei County — and chose closure instead.

At the time, my left hand was still wrapped in surgical bandages. When I told Linda about the shutdown, this compassionate woman said: “If our hands have the power to do good, we must not refuse.” She believed that in such hard times, our ability to live happily in Taipei was a blessing from the Most High. If completing the two-piece leg could save the livelihoods of 5,000 families, the merit would be immeasurable.

Thus, without Mattel spending a single regular budget, it obtained the most advanced production tools in the toy industry—boosting capacity by "240 times," with "zero defects." Ruth Handler thus called me the “Gadget Master,” and Linda became everyone’s beloved “Shimu” (mentor’s wife). I continued gifting Mattel solutions to problems involving hair, head, face, and body.

Shockingly, Mattel staff later told me: “Peter, using your weapons (production tools), Barbie’s cost in Taiwan is US$1. If production moves to Malaysia or mainland China, it drops to US$0.35.”

As my "Satellite Receiver" was about to enter Taiwan’s market and IBM’s personal computer (PC)-- "IBM 5550" had succeeded, I turned to revitalizing Taiwan’s industries. True to form, Mattel shut down the Taiwan plant completely in 1986, leaving 5,000 middle-aged workers unemployed. That was when Linda Din insisted on pursuing "Social Responsibility Investment " (SRI)— entrepreneurship to solve unemployment, and "industrial innovation" to address structural unemployment. She then invented "New Industry" (TES) during her spiritual meditation to address the structural problem of unemployment.

Originally, I planned to develop "Power Chip" along the satellite-receiver trajectory, applying them to every corner of human life. Instead, I spent 11 years helping Linda Din realize her invented new techno-economic system— "The eStore System" (TES). In 1998, she promoted e-commerce legislation at APEC based on TES, lighting a path to recovery for countries hit by the 1997 Asian Financial Crisis. TES thus earned the name “Total Economic Solution” at APEC.

Fig 5: Linda Din’s proposal leading to e-commerce legislation

From 1997 to 2009, we helped pass numerous APEC initiatives—mitigating the Asian Financial Crisis, easing the Global Financial Crisis, and during COVID enabling “1.5 billion people to earn global income from home” (APEC’s official figure is one billion). The "ICT" framework we advocated became a crucial pillar sustaining Taiwan’s economic development.

Just one year after leaving Tainan with nothing, I was able to help a multinational company like Mattel cure Barbie’s chronic defects, return her to global No. 1 status, and even "lend money to banks"—helping medium-sized firms avoid default. Had such capability been used purely "for profit" rather than SRI, the resulting wealth would have been unimaginable.

Fig 6: Linda Din was lending money to a bank

Yet today—February 16, 2026, Lunar New Year’s Eve of the Yisi Snake Year — the world enjoys the fruits of her social responsibility investment (SRI). The "cashless" subsystem of TES alone handles tens of trillions of U.S. dollars annually. And yet she has been besieged by corrupt cartels until her only “remaining wealth is treasure in Heaven” — living on NT$200 for 30 buns over 30 meals. This morning, I picked up the prophetic book she wrote in 2001 after being robbed of everything, "The Daughter of A National Defense Employee" (A Lady of Rich Taiwan). Why are cartels so terrified of the words “innovative industry, solving unemployment, rich Taiwan”?

Fig 7: Book — "A Lady of Rich Taiwan"

Looking across sixty years of Taiwan’s industrial history, governments were often helpless during periods of industrial transformation. President Mei Ke-Wang once told me, “You yourself are Taiwan’s industrial history.” Had I not insisted in 1966 on doing business with Americans, had that failed and people packed up and left, the success of KEPZ would have been uncertain. Had I not risked my life going to the U.S. in 1979, Taiwan’s 1986 economic revival might never have happened. Had I not invested immense capital and love to realize Linda Din’s invention, the world might still be stuck in the "contact-based era," and Taiwan’s semiconductor industry — lacking markets — might have faded away.

In short, the so-called “Taiwan Miracle” is the result of someone’s sacrifice and dedication.

Finally, the key to the “Taiwan Miracle” lay in Chiang Ching-Kuo’s decision in 1984 to choose Lee Teng-Hui as Vice President. After Chiang passed away on January 13, 1988, Lee succeeded to the presidency and was willing to listen to the advice of ordinary citizens. Former President Lee recounted that after taking office in 1988 he encountered many turbulent challenges. Yet one day, when the Governor of Washington State visited, a member of the delegation—the 202-centimeter-tall William H. Gates Sr.—mentioned that personal computers exported from Taiwan were using their "MS-DOS." President Lee immediately summoned the relevant officials to address the matter. This seemingly incidental response helped give rise to a future world’s richest man and enabled Taiwan to secure “intellectual property sovereignty,” assisting the upgrading of Taiwan’s IT and semiconductor industries, driving growth in high-tech exports, strengthening its position in global supply chains, and enhancing its leverage in international negotiations.

Peter Li-Chang Kuo, the author created Taiwan's Precision Industry in his early years. Peter was a representative of the APEC CEO Summit and an expert in the third sector. He advocated "anti-corruption (AC)/cashless/e-commerce (E-Com)/ICT/IPR/IIA-TES / Micro-Business (MB)…and etc." to win the international bills and regulations.