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Mybe a lack of investment in the tertiary sector may go some way to explaining why Taiwan will never be able to compete with other players in the region:

The ability to make improvements in English-language programs or in those of any other university departments, however, is constrained by budgetary considerations. With the exception of special projects (such as a five-year, NT$50 billion initiative aimed at raising the global competitiveness of Taiwan�s elite universities), �the Taiwan government�s budget for education has not increased at all over the last 10 years, while countries like Japan and Hong Kong have been steadily increasing theirs,� says Lo Ching-Hua, Dean of Sciences at NTU. �The budget is the most serious problem in higher education right now.�

The expenditure per student per year in Taiwan at public universities is around NT$460,000 (US$14,375), less than one-fifth the level in Tokyo. NTU�s foreign-language department, for example, has felt the impact of the tight budget for the public university system, and plans to replace foreign-language training classes with a separate language center that focuses on English literature, says Chung. The change will involve a reduction in faculty from 80 to 30, saving cost but removing what students need most � basic language training, not literature courses.

Given tight budgets and a reluctance to raise tuition levels, which remain quite low in Taiwan compared with other countries, faculty salaries have also been depressed. Some professors say they could receive double the pay in China, though the inferior living conditions and lack of academic freedom there deter most of them from making the move. But if those staying in Taiwan need to moonlight to bring in sufficient income, it may be one of the factors affecting educational quality.

http://www.amcham.com.tw/topics-archive/topics-archive-2010/vol-40-no-8/3054-industry-focus-balancing-supply-and-demand