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On May 13, 2026, the Stanford Center on China's Economy and Institutions and Stanford University Libraries welcomed Professor Chang-Tai Hsieh (University of Chicago) for the 2026 Dr. Sam-Chung Hsieh Memorial Lecture. In a talk titled The Ghost of Plaza,  Professor Chang-Tai Hsieh offered a frank and nuanced assessment of Taiwan's economic rise and the structural vulnerabilities hiding beneath it.

Taiwan's Unique Position in the AI Era

Professor Hsieh opened by noting that Taiwan's economic trajectory looks like a genuine success story. Its leading role in the semiconductor industry has positioned the nation at the very center of the global AI boom. Yet Hsieh argued that this surface-level success masks a deeper problem: economic policy in Taiwan remains governed by what he called the "Ghost of Plaza.”

The Ghost of Plaza

The specter Hsieh described traces back to the 1985 Plaza Accord, when U.S.-Japan negotiations forced Taiwan to allow its currency to appreciate. In response, Taiwan's policymakers developed a deep institutional fear that the economy is always just one step away from disaster; this persistent fear has shaped policy ever since. Rather than allowing the gains of export success to flow broadly through the economy, Taiwan has systematically suppressed domestic consumption and kept the New Taiwan dollar undervalued to protect its competitive edge.

This policy has produced a trade surplus that reached 20% of GDP in 2025 and may climb to an extraordinary 35% of GDP in 2026. The surpluses have been invested most notably through purchases of U.S. treasury bonds by Taiwan's life insurance industry, parking roughly 90% of its assets in U.S. dollar-denominated instruments. The result is a system carrying enormous hidden financial risk: if the New Taiwan dollar appreciates sharply, a significant portion of Taiwan's life insurance sector faces potential collapse.

Who Bears the Cost?

A central thread of Hsieh's lecture was a pointed question: who has actually benefited from Taiwan's economic boom? His answer was largely: not workers. Labor policy in Taiwan, including widespread use of non-compete agreements, suppressed wages, and constrained mobility between firms, reflects the same logic of sacrifice that underlies macroeconomic policy in Taiwan. 

Hsieh illustrated this with a simple analogy: imagine your income rises significantly, but you are culturally and institutionally pressured to act as though it didn't. That, he argued, is the lived experience of many Taiwanese workers: a social norm of sacrifice rationalized by a sense of perpetual economic insecurity.

Toward an Uncertain Future

Present-day Taiwan may face a potential policy response to growing external pressure: rather than holding surpluses in foreign treasury bonds, Taiwan would channel investment into direct foreign investment, including building manufacturing facilities in the United States. While this may ease political tensions around the trade imbalance, Hsieh cautioned that it does nothing to address inequality at home. Any returns from such investments will flow to firms, not to workers.

Professor Hsieh closed with a call for honest reckoning. Taiwan's economy has achieved something genuinely extraordinary, but its success has been built on a foundation of suppressed wages, financial risk, and a policy psychology rooted in fear rather than confidence. Moving beyond the Ghost of Plaza, he suggested, will require confronting those structures directly, and ensuring that the gains of Taiwan's boom are finally shared more broadly.

 

Watch the Recorded Event


This lecture was endowed by the family of Dr. Sam-Chung Hsieh (1919–2004), former Governor of Taiwan's Central Bank, in honor of his legacy of economic stewardship and development.

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The Stanford Center on China's Economy and Institutions and Stanford University Libraries welcomed Professor Chang-Tai Hsieh (University of Chicago) for the 2026 Dr. Sam-Chung Hsieh Memorial Lecture on the risks of Taiwan's economic boom.

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Stanford University Libraries and the Stanford Center on China’s Economy and Institutions are pleased to present the 2026 Dr. Sam-Chung Hsieh Memorial Lecture featuring Professor Chang-Tai Hsieh who will be speaking on The Risks of Taiwan's Economic Boom.

To attend in person, please register here.
To attend online, please register here.



Professor Hsieh will discuss how Taiwan's Central Bank has had a longstanding unstated policy of keeping the exchange rate undervalued to boost exports. The rise of Taiwan as the center of the semiconductor industry, and more generally as the center of AI hardware, is making this policy untenable. The trade surplus reached 20% of GDP in 2025 and is likely reach an astronomical 35% of GDP this year. Furthermore, much of the surplus has been channeled into purchases of US treasury bonds by Taiwan's life insurance industry that face collapse when the Taiwan dollar appreciates.
 


About the Speaker 

 

Chang-Tai Hsieh headshot.

Professor Hsieh is the Phyllis and Irwin Winkelreid Distinguished Service Professor of Economics at the University of Chicago. He is an elected member of Taiwan's Academia Sinica, the American Academy of Arts and Sciences, and the Econometric Society. He is also a two times recipient of the Sun Ye-Fang Award of China's Academy of Social Sciences.



The family of Dr. Sam-Chung Hsieh donated his personal archive to the Stanford Libraries' Special Collections and endowed the Dr. Sam-Chung Hsieh Memorial Lecture series to honor his legacy and to inspire future generations. Dr. Sam-Chung Hsieh (1919-2004) was former Governor of the Central Bank in Taiwan. During his tenure, he was responsible for the world's largest foreign exchange reserves, and was widely recognized for achieving stability and economic growth. In his long and distinguished career as economist and development specialist, he held key positions in multilateral institutions including the Asian Development Bank, where as founding Director, he was instrumental in advancing the green revolution and in the transformation of rural Asia. Read more about Dr. Hsieh.

Green Library, Bing Wing, 5th floor, Bender Room
459 Lasuen Mall, Stanford, CA 94305

Chang-Tai Hsieh, Professor of Economics, University of Chicago
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Despite the proliferation of education technologies (EdTech) in education, past reviews that examine their effectiveness in the context of low- and middle-income countries are few and rarely seek to include studies published in languages other than English. This systematic review investigates the effectiveness of educational technology on primary and secondary student learning outcomes in China via a systematic search of both English- and Chinese-language databases. Eighteen (18) unique studies in 21 manuscripts on the effectiveness of EdTech innovations in China met the eligibility criteria. The majority of these evaluate computer aided self-led learning software packages designed to improve student learning (computer assisted learning, CAL), while the rest evaluate the use of education technology to improve classroom instruction (ICI) and remote instruction (RI). The pooled effect size of all included studies indicates a small, positive effect on student learning (0.13 SD, 95% CI [0.10, 0.17]). CAL used a supplement to existing educational inputs – which made up the large majority of positive effect sizes – and RI programs consistently showed positive and significant effects on learning. Our findings indicate no significant differences or impacts on the overall effect based on moderating variables such as the type of implementation approach, contextual setting, or school subject area. Taken together, while there is evidence of the positive impacts of two kinds of EdTech (supplemental computer assisted learning and remote instruction) in China, more evidence is needed to determine the effectiveness of other approaches.

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Computers and Education Open
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Prashant Loyalka
Scott Rozelle
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Breastfeeding self-efficacy (BSE), defined as a mother’s confidence in her ability to breastfeed, has been confirmed to predict the uptake of exclusive breastfeeding (EBF). Early experiences during the birth hospital stay, especially in-hospital formula feeding (IHFF), can impact both EBF and maternal breastfeeding confidence. Therefore, our objective was to examine the association between IHFF and EBF outcomes and investigate whether this association is influenced by BSE. The study included 778 infants from a larger cohort study conducted in 2021, with a one-year follow-up in rural areas of Sichuan Province, China. We used a causal mediation analysis to estimate the total effect (TE), natural direct (NDE), and nature indirect effects (NIE) using the paramed command in Stata. Causal mediation analyses revealed that IHFF was negatively associated with EBF (TE odds ratio = 0.47; 95% CI, 0.29 to 0.76); 28% of this association was mediated by BSE. In the subgroup analysis, there were no significant differences in the effects between parity subgroups, as well as between infant delivery subgroups. Our study found that IHFF hindered later EBF and that BSE mediated this association. Limiting the occurrence of in-hospital formula feeding or improving maternal breastfeeding self-efficacy is likely to improve exclusive breastfeeding outcomes.

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Nutrients
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Scott Rozelle
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The objective of the current study is to examine the impact of an in-school computer-assisted learning (CAL) intervention on the math achievement of rural students in Taiwan, including a marginalized subgroup of rural students called Xinzhumin, and the factors associated with this impact. In order to achieve this, we conducted a cluster randomized controlled trial involving 1,840 fourth- and fifth-grade students at 95 schools in four relatively poor counties and municipalities of Taiwan during the spring semester of 2019. While the Intention-To-Treat (ITT) analysis found that the CAL intervention had no significant impacts on student math achievement, the Local Average Treatment Effect (LATE) analysis revealed significant associations with the math performance of the most active 20% of students in the treatment group. LATE estimates suggest that using CAL for more than 20 minutes per week for ten weeks corresponds to higher math test scores, both in general (0.16 SD–0.22 SD), and for Xinzhumin students specifically (0.3 SD–0.34 SD). Teacher-level characteristics were associated with compliance rates.

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Journal of Research on Educational Effectiveness
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In Taiwan, thousands of students from Yuanzhumin (aboriginal) families lag far behind their Han counterparts in academic achievement. When they fall behind, they often have no way to catch up. There is increased interest among both educators and policymakers in helping underperforming students catch up using computer-assisted learning (CAL). The objective of this paper is to examine the impact of an intervention aimed at raising the academic performance of students using an in-home CAL program. According to intention-to-treat estimates, in-home CAL improved the overall math scores of students in the treatment group relative to the control group by 0.08 to 0.20 standard deviations (depending on whether the treatment was for one or two semesters). Furthermore, Average Treatment Effect on the Treated analysis was used for solving the compliance problem in our experiment, showing that in-home CAL raised academic performance by 0.36 standard deviations among compliers. This study thus presents preliminary evidence that an in-home CAL program has the potential to boost the learning outcomes of disadvantaged students.

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Sustainability
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Scott Rozelle
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The effectiveness of educational technology (EdTech) in improving the outcomes of poor, marginalized students has primarily been documented by studies conducted in developing countries; however, relevant research involving randomized studies in developed country contexts is relatively scarce. The objective of the current study is to examine whether an in-school computer assisted learning (CAL) intervention can improve the math performance (the primary outcome) and academic attitudes (secondary outcomes) of rural students in Taiwan, including a marginalized subgroup of rural students called Xinzhumin. We also seek to identify which factors are associated with the effectiveness of the intervention. In order to achieve this, we conducted a randomized control trial involving 1,840 sixth-grade students at 95 schools in four relatively poor counties and municipalities of Taiwan during the spring semester of 2019. According to the ITT analysis, the O-CAL intervention had no significant ITT impacts on the primary outcome of student math performance as well as on most secondary outcomes of the overall treatment group (who on average used the software for only about one quarter of the protocol’s minimum required time of 30 minutes per week, indicating that compliance was low). However, the LATE analysis revealed significant improvements in the math performance of the 30% most active students in the treatment group (who used the software for about two thirds of the minimum required time). Effect sizes of active users overall (0.16 SD-0.22 SD) increased in accordance with increases in usage and were larger for active Xinzhumin users specifically (0.21 SD-0.35 SD). A wide range of student-level and (in particular) teacher-level characteristics were associated with the low compliance to the intervention, which are findings that may help inform educational policymakers and administrators of the potential challenges of introducing school-based interventions that depend heavily on teacher adoption and integration.  

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Scott Rozelle
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Previous studies reflect a high prevalence of depressive symptoms among Taiwanese adolescents (ages 13–18), but there is an absence of literature related to the risk of depression of children in Taiwan (ages 6–12), particularly among potentially vulnerable subgroups. To provide insight into the distribution of depressive symptoms among children in rural Taiwan and measure the correlation between academic performance, we conducted a survey of 1655 randomly selected fourth and fifth-grade students at 92 sample schools in four relatively low-income counties or municipalities. Using the Center for Epidemiological Studies-Depression Scale (CES-D) we assessed the prevalence of depressive symptoms in this sample, in addition to collecting other data, such as performance on a standardized math test as well as information on a number of individual and household characteristics. We demonstrate that the share of children with clinically significant symptoms is high: 38% of the students were at risk of general depression (depression score ≥ 16) and 8% of the students were at risk of major depression (depression score > 28). The results of the multivariate regression and heterogeneous analysis suggest that poor academic performance is closely associated with a high prevalence of depressive symptoms. Among low-performing students, certain groups were disproportionately affected, including girls and students whose parents have migrated away for work. Results also suggest that, overall, students who had a parent who was an immigrant from another country were at greater risk of depression. These findings highlight the need for greater resource allocation toward mental health services for elementary school students in rural Taiwan, particularly for at-risk groups. 

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International Journal of Environmental Research and Public Health
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Scott Rozelle
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