Government Subsidies for Taiwanese Businessmen Returning to Invest is Bad Economics: Short-Term Effects and Worsening Terms of Trade
This article criticizes the Tsai Ing-wen government"s highly publicized "Taiwanese businessmen returning to invest" policy. The author questions that the announced NT$700 billion investment mostly consists of domestic funds, with zero overseas funds remitted, believing that the government is creating a false illusion of economic prosperity for electoral purposes. From an economic perspective, the author points out that Taiwanese businessmen returning is primarily to avoid high tariffs in the US-China trade war, representing a temporary order transfer effect. Moving products lacking comparative advantage back to Taiwan for production not only worsens the efficiency of internal resource utilization but also continuously deteriorates Taiwan"s external terms of trade, ultimately harming people"s living standards. The author concludes that government subsidies for domestic capital investment are "bad economics."