As soon as the nationalists took control of the island, they began nationalizing the bulk of the Japanese enterprises and properties, disassembling entire factories to ferry them to the Mainland to aid the war effort against the Communists. This led to the collapse of Taiwan's economy and a hyperinflation of over 1000% by 1948,1 and prices in August 1948 being 3 million times what they were in January 1937. There was a significant initial shortage of civilian government workers, as the ROC could only send roughly a tenth as many people as the Japanese employed to run the bureaucracy and the security apparatus.
Not only were Provincial Governor Chen Yi's policies futile against the crises, his intervention is claimed to have worsened the situation, and corruption and nepotism flourished under his heavily authoritarian rule.
The administration performed a drastic U-turn on this policy when they needed to retreat to Taiwan, as now the key to their success was developing, not exploiting the island. In October 1948, food exports were ordered to seize, and the Nationalist administration was relocated to Taiwan soon after.
