The Drift: Industrial Policy Under President Ma

This chapter provides a critical account of Taiwan’s industrial policy during the rule of Ma Ying-jiu. The author argues that Taiwan’s manufacturing and service sectors have not been ‘hollowed out’ by Taiwan’s capital investment in China since the early 2000s, and also that Taiwan’s economy, at least in terms of employment, remained robust throughout the Ma era. There has been a significant rise in inequality on the island, but that trend set in long before Ma Ying-jiu came to power. Taiwan under Ma was unable to make a breakthrough in developing its high technology sectors, which are critical for industrial upgrading, and the state’s influence on the economy declined continuously. However, since these developments had already been observed much earlier on, they cannot be attributed to failed policies during the Ma era. Certainly, Ma failed to resolve Taiwan’s economic problems by intensifying cross-Strait economic interaction. However, the fears of Taiwan’s selling out to China were much inflated, given the limited scope of the economic cooperation between the two sides, which was mainly due to the fact that Taiwan had very little to offer China and that Chinese investments in Taiwan remained strictly regulated and restricted throughout the Ma era.