Taiwan's foreign economic policy: The 'liberalization plus' approach of an evolving developmental state

Recent developments in technical aspects of Taiwan's foreign economic policy (FEP) present a very useful case example of where economic liberalization has been implemented in a strong state institutional context. This 'liberalization plus' approach is closely associated with Taiwan's evolving developmental statism, that itself demonstrates a path by which states are adapting rather than surrendering their managerial roles in the era of economic globalization. In Taiwan's trade-industry policy nexus, we show how trade policy liberalization has been accompanied by industrial policy measures designed to enhance the competitiveness of Taiwan's strategic industries. Meanwhile, in Taiwan's international finance policy, it is revealed how liberalization has proceeded in a gradual and cautious manner whereby state institutions have retained various capacities to ensure that liberalization is effectively implemented and, moreover, that the scope for ensuing 'free' market volatility is contained. Before we examine these aspects of Taiwan's FEP in closer detail, we first consider more general perspectives on the relationship between the state and economic liberalization.