• Journal of the Economic Geographical Society of Korea
• /
• v.19 no.2
• /
• pp.173-188
• /
• 2016

This paper argues that the establishment of the Kaohsiung Export Processing Zone (KEPZ), the first EPZ in East Asia, is a compromise of cold-war geopolitical economy in the 1960s. The KEPZ is part of the liberalization policy advise of the US Aid agency which intended to push the KMT (Kuomintang) government to downsize the nationalized sectors and foster private enterprises and encourage foreign investments. However, the KMT state hesitated to embrace the advice wholeheartedly but was forced to implement selectively the policies. To meet the compromise between liberalization and control, the KMT government takes advantage of the KEPZ to grab the geoeconomic opportunities emerging from the new international division of labor in the 1960s without losing the geopolitical support from the US. The idea that zoning as a space of compromise would provide a subtle re-examination of the rise of the KEPZ which is conventionally explained by the functionalist arguments such as increase of employment opportunities, foreign investments and export by the far-sighted developmental state.