Honestly, these types of questions are totally meaningless as mainland China is not Taiwan and hence we would never know what the nationalists could have done in China. Taiwanese economic growth isn't just a miracle of the ROC; its economy started off better than those of China's thanks to Japanese administration and the dynamics of that growth under Japanese occupation has not halted since Taiwan never suffered serious damage from war. The KMT received a centrally administrated Taiwan from the Japanese while left a war torn mainland where centralized administration was largely absent to the communists.
I would say that Taiwan's economy starting out better than China's is a gross exaggeration and that economic growth in Taiwan in some regards occurred despite some of the initial actions of the KMT. As a colony of Japan, hundreds of thousands of Taiwanese were sent to fight during WWII and around 15% died. Japan did heavily build up Taiwan's industrial capacity for manufacturing (which exceeded Taiwan's agricultural output in 1939) and centered major naval yards on the island for their war effort. The importance of Taiwan to Japan's war economy (in terms of the agricultural production and war manufacturing) led to America's strategic targeting of the island - first by aircraft carrier planes and B-29 bombers followed by round the clock B-24 and B-25 bomber raids. In other words, Japanese-occupied Taiwan had the living daylights bombed out of it. After the KMT got control of the island in 1945 (and before the arrival of the central government in 1949), the situation in Taiwan went from bad to spiraling out of control. The KMT governor, Chen Yi, landed on Taiwan and started to monopolize entire industries, confiscate hundreds of businesses, and tens of thousands of private residences. The KMT straight-up looted much of the already scarce resources from Taiwan and instead shipped it to the mainland at inflated prices. KMT cronies and other opportunists from the mainland arrived on Taiwan and simply replaced scores of native islanders in their jobs while economic mismanagement caused the local economy to tank and the price of rice to inflate to 400 times its original value by 1947. In that same year, tensions on Taiwan erupted in a brutal massacre (now remembered as the "228 Incident") where KMT troops killed thousands of people (including both the Taiwanese and the Chinese newcomers, and in some cases completely at random) and completely liquidated the existing Taiwanese elite that had come to power during the Japanese colonial era. All of this had occurred prior to the KMT loss of the mainland. It was only after the 228 incident that the KMT was able to institute complete centralized control over the island's inhabitants, and this authoritarianism persisted for 40 years as the "White Terror."
I wouldn't say that the PRC's economic growth was so much of a "miracle" as it was out of complete and utter necessity. Mao and the communists inherited a people and an economy devastated by both WWII and a really destructive civil war. What happened under Mao's rule was nothing short of an attempt to totally destroy Chinese culture, traditions, institutions; pit sons against fathers, students against teachers, the young against the old; and keep the majority of the people confused in a destructively "revolutionary" state of mind while he engaged in power struggles behind the scenes. On a large scale, people were instructed to engage in such wealth-destroying actions as melting down their useful cooking implements or agricultural tools to produce completely worthless lumps of metal in order to goose production figures in order to "report" economic growth. The only thing that saved the PRC from a total utter collapse following Mao's death was the economic liberalization policy initiated by Deng Xiaoping. Only then did some people see an actual improvement in their living conditions. And who should really get the credit for the economic "miracle" we see today? It should not go to the officials in the PRC (since the outcome of the Cold War shows us what happens with massive governmental micromanaging). It should not fully go to Deng Xiaoping either (since the only viable option he really had was liberalization and to open China up to foreign investment). It should be the individual actors in the market economy, the Chinese people themselves, that get the credit, since their individual actions and preferences, which will always be too variable and complex for central planners to accurately gauge, are what have driven the real growth in China these last 40 years.
Well said. It is worth noting that Chiang secretly shipped massive amount of gold, silver and foreign exchange from mainland to Taiwan at the end of the civil war. Chiang Ching-kuo, son of Chiang Kai-shek and president after his death, was said to have written in his diary: “if we have not had this gold in the early period of moving the government to Taiwan, it is unimaginable what would have happened. How would we have the stability of today?” (http://guanyu9.wordp...-from-the-reds/) Wouldn't that make one wonder how PRC managed to stablize and grow its economy, at a size many times bigger than Taiwan's, *without* the gold reserve that was stolen from them? What PRC has accomplished since 1949 is nothing short of a miracle in the human history, even dwarfing the so-called "Taiwan miracle".
The same can be said for what people call the "Taiwan miracle." Both sides of the Taiwan strait were initially left with destroyed infrastructure and economies and had no other choice but to enact market liberalization reforms in order to move past devastation and grow their economies. The initial question of "What would China be like today if the KMT won the war" is meaningless. As far as I can tell, the only really significant difference between the development of China and Taiwan after 1949 is that Taiwan is almost 30 years ahead of China in terms of development due to the fact of Mao's disastrous rule while he was alive.