ABSTRACT
This chapter explains the effect of globalization on the deterioration of income inequality in Taiwan after the Plaza Accord. The trade-investment nexus arising from the Plaza Accord first pushed Taiwan's foreign direct investment (FDI) to Southeast Asian countries and then spread across the Taiwan Strait to China in the late 1980s after Taiwan's government gradually lifted its ban on FDI in China. Consequently, the Taiwanese government has implemented a series of liberalization policies since the early 1980s. Since Taiwan is an egalitarian society, growth with equity is not only a core value but also the cornerstone of the principle of people's livelihood advocated by the Nationalist government, which has governed the country since the end of World War II, except for the 2000-2008 period. Lin analyzed the deteriorating income distribution in Taiwan during the 1982-2010 period by focusing on the impacts of Taiwan's trade dependency on China and its outward FDI concentration there.
