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Industrial Policy: Chinese Debate To Taiwanese Foundries

Author

Listed:
  • AN-CHI TUNG

    (Institute of Economics, Academia Sinica, Taipei, Taiwan)

  • HENRY WAN

    (Department of Economics, Cornell University, New York, USA)

Abstract

This study explores Chinese realities of industrial policy. These facts attract global interest. They also caused China’s Debate of the Century between prominent Chinese economists, Justin Lin and Weiying Zhang. After commenting on this exchange with evidential assessments, three questions are explored for technology-followers: (A) Can industrial policy against market failure also minimize government failure? (B) Can catching-up create win–win outcome by complementarity, rather than substitution? (C) Can leapfrogging trigger global innovation by co-evolution? TSMC from Taiwan suggests affirmative answers for all these three. Although its game-theory basis appears challenging for replication, exceptions may prove rules for further studies.

Suggested Citation

  • An-Chi Tung & Henry Wan, 2019. "Industrial Policy: Chinese Debate To Taiwanese Foundries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1057-1080, December.
    • Handle: RePEc:wsi:serxxx:v:64:y:2019:i:05:n:s021759081950022x
    DOI: 10.1142/S021759081950022X
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    References listed on IDEAS

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    1. Tung, An-Chi, 2001. "Taiwan's Semiconductor Industry: What the State Did and Did Not," Review of Development Economics, Wiley Blackwell, vol. 5(2), pages 266-288, June.
    2. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    3. Jagdish Bhagwati, 1958. "Immiserizing Growth: A Geometrical Note," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(3), pages 201-205.
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