In the past, Taiwan had been favored with the effect of international division of labor and industrial transferringas proposed bythe flying-geese-theory. In the sequence of time, the flying-geese-theoryserved as a good analytical framework to observe the track of Taiwanese economic development. It explained the course and connotation of Taiwan stepping into the Four Dragon of Asia. The viewpoint and explanatory framework of the flying-geese-theory adequately illustrated the development course of Taiwan from a war damagedland to an economic miracle. This paper studies the thesis and meaning, and restriction of the flying-geese-theory. It discourses the relation between flying-geese-theory and Taiwan economy, and the prospective direction of Taiwan.