A Review of Chinese Taipei's Deregulation Approaches
－from Japan's History of Deregulation

Abstract

For many years, Chinese Taipei government has been advocating and implementing the so-called "deregulation" policy. Nonetheless, for many observers, it seems that the policy was implemented under pressure from other countries, especially the United States, which take advantages of Chinese Taipei's expectation to join the World Trade Organization (WTO). After analyzing what the government has done concerning the deregulation policy until now, we find that those observers may be right to a significant extent. Although the government has repeatedly explained and praised the ideas and necessity of deregulation, no comprehensive action plan or a clear blueprint of implementing mechanism has yet been offered. Such results may do harms to foreign governments and enterprises' beliefs in Chinese Taipei's resolution to deregulate its economy, delay the schedule of Chinese Taipei's own aspiration to become the financial center of Asia-Pacific, and eventually cause an economic turbulence as what happened in Japan after 1990s.

What the Chinese Taipei government is doing now about deregulation resembles much what the Japanese government had done before 1995. Both governments now and then see the deregulation as a piecemeal engineering, therefore resist the idea of overhauling the persistent regulatory mechanism. Having experienced the longest period of slack economic growth after World War II, the Japanese government finally realized that an overall reform of its current regulatory system is one of the few ways left for it to resurrect its downward economy. At the end of 1995, the Japanese government established an independent commission specifically responsible for regulatory reform, opening a new era for deregulation. All the members of that commission come from outside the government. Their jobs include forming a thorough deregulation plan, reviewing and revising the plan every year, monitoring if the administrative agencies actually implement the plan, if not, making suggestions to the prime minister to put pressure on it. Under the leadership of the commission, once underestimated deregulation policy soon became a national movement. The work of the commission proves to be a great success.

Chinese Taipei's economy is fortunate not to have experienced the slack time as Japan's has, but we should not be too optimistic about our future. Japan's economy, too, never expected its 1990s' situation when it went well in 1980s. The high growth-rate in 1980s let the Japanese government undervalue the importance of deregulation. If we want to avoid the situation Japanese economy is experiencing, we should implement deregulation policy without any reservation. To achieve this purpose, Japanese deregulation policy and its implementing mechanism after 1995 will be a good model for us. This research tries to find out how Japanese experience of and its approach toward deregulation can shed lights on the current deregulation policy in Chinese Taipei.