The Best of Times, the Worst of Times: Taiwan’s New Economic Policy under The New DPP Government

Taiwan’s economy is facing growing problems for stagnating growth and escalating inequality that call for a reset of the nation’s economic strategy. In 2016 election campaign, Tsai Ing-wen promised to reorient Taiwan’s strong economic ties with China to reduce the diplomatic leverage of a country which claimed political sovereignty over Taiwan (Clark, Ho, and Tan, 2016; Copper, 2016). That is the precursor of the DPP government’s New Southbound Policy (NSP). In this study we examine the NSP from the economic standpoint. The first section traces the decline of Taiwan’s “miracle economy” into a stagnating one; the second analyzes how political and economic events have impacted the country’s key export sector; the third provides a brief overview of the New Southbound policy; and the conclusion evaluates the potential effects of this economic reorientation.