Indian students studying at WuFeng University in southern
Taiwan’s Chiayi County intern at a factory operated by Chiayi
City-headquartered Far East Machinery Co. (Chin Hung-hao)
- Taiwan was the world’s 17th largest exporter of merchandise in 2019.
- Under the New Southbound Policy, Taiwan is deepening
ties across the board with the 10 Association of
Southeast Asian Nations member states, six South
Asian countries, Australia and New Zealand.
Taiwan holds an important position in the global economy.
It is a top player in the world’s information and
communication technology industry as well as a major
supplier of goods across the industrial spectrum.
According to the World Trade Organization, Taiwan
was the 17th largest exporter and 17th largest importer
of merchandise in 2019. It was also one of the largest
holders of foreign exchange reserves as of December
2019. Taiwan’s gross domestic product per capita
reached US$25,909 in 2019. In terms of nominal GDP,
Taiwan ranks close to Switzerland and Poland, while its
GDP per capita expressed as purchasing power parity is similar to that of Sweden and Denmark and higher
than that of Japan and South Korea.
After weathering the global financial crisis of 2009,
Taiwan’s export-oriented economy took another hit in
2015, mainly due to the weak global demand for consumer
electronics products, coupled with the falling
price of crude oil. Taiwan’s economy grew only 1.47 percent
and its overall trade volume decreased by 13.3 percent
in 2015. The situation has improved since 2016, and
statistics indicate that although in 2019 Taiwan’s overall exports decreased by 1.44 percent, imports increased by
0.32 percent, and its economy expanded 2.71 percent.
While growth was modest due to the impact of the U.S.-
China trade dispute, expanding domestic production
driven by the reshoring of manufacturing companies
helped to offset the drag. Growth had rebounded by
January and February of 2020, with exports and imports
respectively increasing by 6.4 percent and 5.3 percent
and overall trade value rising 5.9 percent year on year.
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
2019-2020 were no exception (see table “Global Survey
Rankings” p. 58-59).
In July 2013, Taiwan signed an economic cooperation
agreement with New Zealand, its first with a member
of the Organization for Economic Cooperation and
Development. An economic partnership accord was
also inked with Singapore in November the same year,
marking Taiwan’s first such pact with a trading partner
in Southeast Asia. Both agreements go beyond
Taiwan has also completed research with Indonesia
and India on the feasibility of an economic cooperation
agreement, with the results released in Jakarta in
December 2012 and in New Delhi in September 2013,
respectively. Developments such as the economic
pacts with New Zealand and Singapore as well as the
ECAs are expected to facilitate the country’s participation
in such regional economic integration blocs as the
Comprehensive and Progressive Agreement for Trans-
Pacific Partnership and the Regional Comprehensive
Since May 2016, Taiwan has adopted the New Model
for Economic Development. This seeks to boost growth
by promoting innovation, increasing employment and
ensuring the equitable distribution of economic benefits.
Under the model, Taiwan is striving to strengthen 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
ASEAN member states, as well as South Asia, Australia
and New Zealand. Taiwan will continue monitoring the
development of regional economic integration and seek
all possible opportunities for participation.
To boost domestic investment and enhance the nation’s
global competitiveness, the New Model for Economic
Development prioritizes the promotion of the 5+2
Industrial Innovation Plan. These are the five emerging and high-growth sectors of biotech and pharmaceuticals,
green energy, national defense, smart machinery
and Internet of Things, as well as two core concepts: the
circular economy and a new paradigm for agricultural
development. Also comprising the Asia Silicon Valley
development plan in northern Taiwan’s Taoyuan City, the
initiative seeks to cultivate core drivers of future growth.
The government is also promoting the Forward-looking
Infrastructure Development Program to meet national
infrastructure needs over the next 30 years. This program
contains eight major elements: railway development,
digital infrastructure, aquatic environments, food
safety, green energy, urban-rural development, boosting
birthrates and child care facilities, and nurturing talent
As it works to advance innovative industries, the government
is also committed to protecting the environment.
With this in mind, the new economic model seeks
to fully integrate industrial restructuring, national landuse
planning and regional growth strategies to foster
sustainable development while promoting the use of
green energy resources.
Under this approach, the government aims to raise
wage levels and enhance regional development while
mitigating the economic impact of the COVID-19
pandemic and the prolonged U.S.-China trade war.
Measures are expected to improve industrial competitiveness
and further bolster Taiwan’s economy in 2020.