Review of Taiwan's go-south policy toward Southeast Asia: limit of government-led investment fever

Abstract

Since 1994, Taiwanese government has initiated four waves of "Go-South" policy schemes to encourage investment by domestic firms in Southeast Asia. The aim of these policy initiatives is not only to increase economic connection between Taiwan and Southeast Asia but also to divert investment by Taiwanese firms away from flocking into China. While the government places high premium on the Go-South policy, the policy obtains limited result. In the first wave of Go-South policy initiative, the investment does increase by huge volume. However, since the second wave, the investment increase stirred by official policy schemes had been decreasing. How to account for the decline? What is the role played by the locus of the various policy schemes in explaining the declining force of policy push? In order to answer the above questions, this paper will explore on the different policy schemes whose effect will be evaluated against variation of inbound investment by Taiwanese firms in this region as well as corresponding political context within which the political and economic factors interact with each other.