Through nearly five decades of hard work and sound economic management, Taiwan has transformed itself from an underdeveloped, agricultural island to an economic power that is a leading producer of high-technology goods. Taiwan is now a creditor economy, holding one of the world's largest foreign exchange reserves. After the 1997-98 Asian financial crisis, the economy continues to expand at about 5% per year, with virtually full employment and low inflation.
In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive technology to the island, and Taiwan became a major exporter of labor-intensive products. In the 1980s, focus shifted toward increasingly sophisticated, capital-intensive and technology-intensive products for export and toward developing the service sector. At the same time, the appreciation of the New Taiwan dollar (NT$), rising labor costs, and increasing environmental consciousness in Taiwan caused many labor-intensive industries, such as shoe manufacturing, to move to the Chinese mainland and Southeast Asia.
Today, Taiwan, brimming with infinite advantages and potentials for creation formed over more than 50 years of rapid economic development and intense industrial competition, is striving in an attitude of pragmatism and sincerity to put down deep roots into its existing base, deeply implanting a solid economic capability and opening up a future of vast promise and brilliant vision.
Economic liberalization and internationalization are the administrative principles of the government. From the 1950s, when Taiwan strived to develop labor-intensive light industries to substitute for imports, to the 1980s, which was an era of internationalization during which the emphasis was on a technology orientation and internationalization, the island had laid down a foundation that positioned to advance in the direction of becoming of a high-value-added manufacturing and logistics center.
With the international economy warming up once again, Taiwan's general economic situation is also gradually stabilizing and the island is displaying greater advantages than ever in the areas of industry, innovation, R&D, human resources, geography, culture, and transportation and communications.
Foreign trade has been the engine of Taiwan's rapid growth during the past 40 years. Taiwan's economy remains export-oriented, so it depends on an open world trade regime and remains vulnerable to downturns in the world economy. The total value of trade increased more than five-fold in the 1960s, nearly 10-fold in the 1970s, and doubled again in the 1980s. The 1990s saw a more modest, slightly less than two-fold, growth. Export composition changed from predominantly agricultural commodities to industrial goods. The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of U.S. investment. Taiwan became a member of the World Trade Organization (WTO) as "Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu" in January 2002.
Taiwan is the world's largest supplier of computer monitors and is a leading PC manufacturer. Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports most of its energy needs. The United States, Hong Kong (including indirect trade with mainland China), and Japan account for nearly 56% of Taiwan's exports, and the United States and Japan provide over 40% of Taiwan's imports. As Taiwan's per capita income level has risen, demand for imported, high-quality consumer goods has increased as well.
In the 21st century, Taiwan needs to be an innovative, flexible, responsible, and constantly evolving learning team. To these ends, the Ministry of Economic Affairs (MOEA), through its ability to deliver an innovative, high-quality, and rapid response to the needs of business and the public, and to serve a guiding role for business sector, develops an even more active partnership with private businesses, optimizes the utilization and effectiveness of the nation's overall resources, enhances administrative efficiency, improves the domestic investment environment, and leads the economy through fair competition towards liberalization and internationalization, nourishing a vigorous private sector. The ministry will devote its efforts not only to guiding Taiwan's economy through the short-term obstacles it faces, but also to laying a solid foundation for long-term industrial growth.
To know more about Taiwan's economic outlook, you may read the latest report of economic situation and outlook in Taiwan by CEPD
Should you have any questions, please contact us by our fax or email.