China's open-door policy prompted China to participate in the wave of globalization, which in effect, provided surplus labor to the rest of the world, pushing down production costs and commodity prices. China's opening set off a process of resource reallocation, in which capital moves to China en-mass, enabling rapid capital accumulation and high economic growth rates. The China miracle is nothing but a one-fime Pareto improvement, rather than a self-generated economic growth. Because of its proximity to China, Taiwan has been greatly affected impacted by China's opening, but Taiwan's position in the world's division of labor will be largely unaffected after the impact has subsided.