In this paper trends and varying types of industrial restructuring in Taiwan are examined as the island continues to lose comparative advantage in international markets. Based on some official statistics, triggers of industrial restructuring are explored and the corporate strategies of industries are identified. There is evidence of specific triggers of industrial restructuring which include shortage of labor, rising domestic real wages, appreciation of currency value, increasing raw-material costs, and labor productivity changes. The author addresses corporate strategies both at home and abroad, with emphases upon the issues of hiring illegal foreign workers and the operating of outward investment. The government has played a major role in policy responses as reflected in efforts to expand domestic demand, diversify export markets, and revise mercantilist trade regulations. Additional national efforts include further liberalization of imports and foreign exchange controls and financial system reforms, as well as expansion of technology transfer.