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ECONOMY

Taiwan is implementing a New Model for Economic Development that seeks to foster innovationbased growth.
Taiwan is implementing a New Model for Economic Development that seeks to foster innovationbased growth. (Chen Mei-ling)
DO YOU KNOW?

  • Taiwan was the world’s 18th largest exporter of merchandise in 2016.
  • The nation signed free trade deals with New Zealand and Singapore in 2013.
Taiwan occupies an important position in the global economy. It is a top player in the world’s information and communication technology (ICT) industry, as well as a major supplier of goods across the industrial spectrum.
According to the World Trade Organization (WTO), Taiwan was the 18th largest exporter and 18th largest importer of merchandise in 2016. It was also the fifth largest holder of foreign exchange reserves as of March 2017. Taiwan’s gross domestic product (GDP) per capita reached US$22,530 in 2016. In terms of nominal GDP, Taiwan ranks close to Argentina and Sweden, while Taiwan’s GDP per capita expressed as purchasing power parity is similar to that of Austria and Denmark.
After weathering the global financial crisis of 2009, Taiwan’s export-oriented economy took another hit in 2015, mainly due to the weak demand for global consumer electronics products, coupled with the falling price of crude oil. Taiwan’s economy grew only 0.72 percent and its overall trade volume decreased by 13.2 percent in 2015. The situation has since improved, and statistics indicate that in 2016 Taiwan’s overall exports and imports decreased 1.8 percent and 2.8 percent, respectively, while its economy expanded 1.5 percent, higher than in 2015.
Authoritative annual surveys of the world’s economies, including those conducted by the World Economic Forum, Business Environment Risk Intelligence and the Economist Intelligence Unit, have ranked Taiwan among the top nations year after year with respect to long-term growth and technological development. Results announced in 2016 were no exception (see table ‟Global Survey Rankings”).
In July 2013, Taiwan signed the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC). This high-quality economic cooperation pact is Taiwan’s first with a member of the Organisation for Economic Co-operation and Development. In November the same year, a similar pact, the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP), was signed between Taiwan and Singapore. It is Taiwan’s first such accord with a trading partner in Southeast Asia. Both ANZTEC and ASTEP go beyond WTO requirements.
Economic growth rates
Taiwan has also completed research with Indonesia and India on the feasibility of an economic cooperation agreement (ECA), with the results released in Jakarta in December 2012 and in New Delhi in September 2013, respectively. Developments such as ANZTEC, ASTEP and the ECAs are expected to facilitate the country’s participation in such regional economic integration blocks as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).
Since May 2016, Taiwan has adopted a New Model for Economic Development that seeks to boost the nation’s growth by promoting innovation, increasing employment and ensuring the equitable distribution of economic benefits.
GDP snapshot(2016)
Under this model, Taiwan is striving to strengthen its global and regional connections through initiatives such as the New Southbound Policy, which aims to diversify the nation’s international markets by expanding links with members of the Association of Southeast Asian Nations (ASEAN), as well as South Asia, Australia and New Zealand. Taiwan will continue monitoring the development of regional economic integration and seek all possible opportunities to participate in it.
In order to enhance the nation’s global competitiveness, the New Model for Economic Development prioritizes the promotion of the five-plus-two innovative industries initiative, which targets the five emerging and high-growth sectors of biotech and pharmaceuticals, green energy, national defense, smart machinery and Internet of Things, as well as focuses on promotion of two core concepts: circular economy and a new paradigm for agricultural development. It also centers on the development of the Asian Silicon Valley in northern Taiwan’s Taoyuan City.
To fulfill the needs of national development over the next 30 years, the government is promoting the Forwardlooking Infrastructure Program to drive overall economic growth.
Trade and investment profile(2016)
The program contains eight major elements: railway development, digital infrastructure, aquatic environment, food safety, green energy, urban-rural development, boosting birth rates and childcare facilities, and nurturing talent and employment.
Under this approach, the ROC government aims to boost wage levels and foster regional development. As it works to cultivate innovative industries, the ROC government is committed to protecting the environment. With this in mind, the new economic model seeks to fully integrate industrial restructuring, national land-use planning and regional growth strategies to foster sustainable development while promoting the use of green energy resources.
Global survey rankings
Photo by Harry Huang