Taiwan's economic freedom

According to the Heritage Foundation, the economic freedom of Taiwan drops from #26 last year to #37 this year.

Meanwhile, HK stayed at #1, 8 years after reverted to PRC rule. China still ranked low, but its score has improved steadily (note high value in score means unfree).

Taiwan's score has been in the decline since Chen Shui Bian started to rule the island (score=2.03 in 2000). The only year of improvement was right before the 2004 election (improved slightly from 2.48 to 2.34). It seems safe to expect the decline until 2008 election.

In the 10 categories of scoring, Taiwan scored worse at
  • Fiscal burden
  • Gov't intervention
  • Regulation
I would not blame CSB too much on fiscal burden, except that he still plans on aggressive spending on arms purchase (but he did not succeed).

To appreciate the government intervention and regulation via means of "active management" in Taiwan, there are two examples here
Sounds like a very strategic advice from Ho. The only problem is, Ho is a government bureacrat. She is not the strategic VP of PSC and knows nothing about the business environment where PSC operates. The minister of economic is responsible for hundres of industries, other than semiconductor. In a free market the business should determine whether an investment will be profitable, because it is putting its own money on the table.

Imagine John Snow telling Microsoft what its strategy should be. This is why Taiwan's economy is not free, and how its economic has suffered, from the irrational management of CSB.


Anonymous said...

Another great chart from Mr Sun bin!

Anonymous said...

More than 700,000 people are reported to have moved from Taiwan to the mainland in the past three years. Why have they given up liberal democracy that United States and Japan enjoy, for the ruthless, oppressive, corrupt and non-transparent ways of the mainland?

Anonymous said...


There was a special report in the Taiwanese TV not long ago...yes a lot of Taiwanese are settling down in Beijing, Shanghai and in the south, most of them find more business opportunities in the mainland, and the whole family is transplanted overthere. Taiwanese women are opening small businesses in China also.

Michael Turton said...

This post is absolutely wrong in every aspect. Taiwan is far, far freer now economically than it was under the KMT, Sun. I've blogged on this, and on Myrick's pointer to your piece, on my own blog: Heritage Nonsense


Sun Bin said...

compared to KMT in 1960s, yes.
compared to KMTA under Lee Tenghui, no.

Myrick and I have refuted on your defense of CSB. Let's just agree to disagree here.

Anonymous said...

North America, Europe, and South Asian Tigers (also Japan) would be at the top on actual list!! China is only fitting to copy and steal other's concepts and nothing more than that.