The Increasing Irrelevance of Industrial Policy in Taiwan, 2016-2020

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Like every democratically elected president in Taiwan before her, in her first term, President Tsai proposed and implemented various industrial policies designed to create new or bolster hopefully emergent industries. Unfortunately, industrial policy has proven to be increasingly irrelevant in terms of failing to deliver on upgrading new or inchoate industries in Taiwan. This increasing irrelevance of industrial policy preceded Tsai's administration and has deep structural and institutional roots. To the extent that industrial policy was impactful during Tsai's first term, it did so by supporting existing industries and firms, such as TSMC, and via the continued hidden industrial policy of currency intervention to promote exports. Taiwan's economy and Tsai's administration did benefit from Trump's trade war with China. Recent trends such as the return of Taiwanese manufacturing from China would not have occurred without the trade war. However, any future broader decoupling between the US and China's economies beyond that of Trump's limited trade war could badly hurt Taiwan.
Original languageEnglish
Title of host publicationTaiwan During the First Administration of Tsai Ing-wen : Navigating in Stormy Waters
EditorsGunter Schubert, Chun-yi Lee
Number of pages14
Place of PublicationAbingdon
Publication date2022
ISBN (Print)9781032072807, 9781032072821
ISBN (Electronic)9781003206323
Publication statusPublished - 2022
SeriesRoutledge Research on Taiwan Series

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