$29.95, paperback, 240 pages, charts, footnotes, bibliography, 6 pages photos, index, 1998, ISBN 1-881896-18-8

By Steven R. Champion

This is a tale of fast money, of a national mania for trading on the stock market, of unorthodox financial structures, of highly creative speculation, and of paradoxical legal and accounting systems.

Between 1987 and early 1990, the Taiwan stock market index rose from 1,000 to just under 12,500. Trading on the Taiwan Stock Exchange (TSE) in the last quarter of 1989 reached $306 billion, more than the total in all of 1988. Investors were paying 100 times annual earnings for a share of stock, about 7 times what investors paid in the U.S. On peak days trading volume reached the combined turnover of the Tokyo and N.Y. exchanges. Capitalization of this obscure market dwarfed that of Singapore and Hong Kong, and was almost as large as Germany's. While Taiwan's real economy continued to produce real goods and services, in no way was production in this small country worth so much more than that of the world's industrial giants.

Eventually the crash came, and ten months later, the index bottomed at 2,560. How did this happen? What factors allowed the market to reach a valuation completely disassociated from reality? And why has Taiwan's economy remained alive and well and worth investing in today? What potential risks are inherent in investing in the Taiwan stock market today?

This is a lively, highly readable and often humorous account with an insider's knowledge of the personalities and institutions involved. It is both a cautionary tale for potential analyzers of and investors in Taiwan's economy, and a textbook for analysis of any developing economy. An essential book for anyone interested in understanding international markets or global investing.

Steven Champion worked in Taiwan for 14 years as the manager of a major international bank and as CEO of a funds management company. He was also president of The R.O.C.-Taiwan Fund, which is listed on the New York Stock Exchange. He has frequently written and spoken on financial subjects, including an article for the Asian Wall Street Journal and annual presentations at Stanford Business School. He is currently based in Connecticut where he manages international portfolios for a major institutional investor.

Reviewers comment on The Great Taiwan Bubble:

"Steven R. Champion does a wonderful job of detailing this episode in financial history in The Great Taiwan Bubble. Champion uses hilarious anecdotes and sober analysis to explain how this hard working island community momentarily went nuts. Thus, the book offers a good guide to the emotions, miscalculations, and structural flaws that fed Asia's later stock bubbles in Hong Kong, Indonesia, Malaysia, and Thailand --- bubbles that burst last year with devastating effect."
------Business Week, November 23, 1998

"The Bubble fulfills the wish of every Taipei expat who has ever said, 'Somebody ought to write a book about this.' Finally, somebody did. . . . Taiwan is a land of rich personalities, and Champion sprinkles his text with stories of some of Taipei's most colorful characters during this period."
------Topics, The American Chamber of Commerce in Taiwan, October 1998

"Taiwan's boom of the late 1980s and subsequent crash is a great yarn. And Steven R. Champion tells it with relish in The Great Taiwan Bubble. Not only does he have an eye for the humor and excitement of the period, Champion occupied a ringside seat as Taipei-based manager of an offshore fund investing in Taiwan stocks."
------AsiaWeek, November 13, 1998


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