Fostering Competition Law and Policy: A Facade of Taiwan's Political Economy

PRELUDE—A MISSED OPPORTUNITY FOR ECONOMIC REFORM In mid-1984, Premier Yu Kuo-hua of the Republic of China (ROC) on Taiwan was upset. However, he had no reason to be. President Chiang Ching-kuo had just promoted him from the Governor of Taiwan's Central Bank of China (CBC) to become Premier. A thoughtful but low profile conservative, he formerly was a trusted lieutenant of the Chiang Kai-shek family, whose inner circle ran the ROC government through the Kuomintang (KMT, or Nationalist Party) then. In his more than ten years at the helm, he turned the CBC into one of the most powerful agencies in Taiwan using foreign exchange control measures authorized under the Statute for Administration of Foreign Exchange (SAFE). 1 President Chiang Ching-kuo, son of Chiang Kai-shek, hand picked the reserved Premier Yu to serve as Premier in part for his conservatism. Nonetheless, he soon announced an ambitious message in his first policy address in 1984. Henceforth, his economic policy would focus on the three pillars of "internationalization, liberalization, and institutionalization" (ILI). As this Article will discuss, the ILI policy would guide Taiwan's economic development in the decades to come. Difficult as it was to implement, the ILI policy had profound ramifications on the development of competition law and policy in Taiwan. What upset Premier Yu was that Taiwan was in the middle of one of the worst economic crises in its history when he stepped into his new job. A few months before, the Tenth Credit Cooperative (TCC) had experienced massive runs by depositors concerned with unrecoverable bad