Globalisation, and its possible impacts, has been widely discussed and debated in Taiwan. The economic technocracies argue for globalisation, as a triumph of the free market and minimum state intervention, through measures of tax cuts, privatisation, deregulation, and so forth, as required to secure Taiwan's economic development in the future. However, rising unemployment accompanied by the new poverty requires more state provisions of social welfare. A strange policy orientation mixing tax cuts with welfare increases is proposed that precisely demonstrates the dilemma of the state between global competition and social reform. This is now a great challenge for Taiwan to balance economic and social requirements.