Economy

The high-tech information and electronics industry is among the top performers of the nation’s economy. Shown here are products by Acer, HTC and ASUS—three manufacturing powerhouses from Taiwan.

After weathering the effects of the global financial crisis through 2009, Taiwan posted brilliant GDP growth of 10.88 percent for 2010 as its economy entered a positive growth cycle. It also improved one spot to become the 16th-largest merchandize exporter in 2010 and remained the fourth-largest holder of foreign exchange reserves at the end of that year. For 2011, Taiwan looks set to be on a path of steady economic improvements in the wholesale and retail sectors as well as industrial production and export orders.

Year after year, 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 world’s top nations with respect to long-term economic growth and technological development. Results for 2010-2011 were no exception (see table “Global Survey Rankings”).

Small and medium-sized enterprises, accounting for nearly 98 percent of all enterprises in Taiwan, play a critical role in the nation’s economy. Their efficiency in asset utilization, strong innovation capacity and increased R&D spending have facilitated faster growth than larger enterprises in both capital and labor productivity over recent years.

As in preceding years, the high-tech information and electronics industries were the economy’s best performers in 2010. The lion’s share of high-tech revenues was generated by companies located in the Hsinchu Science Park, Southern Taiwan Science Park and Central Taiwan Science Park. Among the important industries are integrated circuits (IC), optoelectronics, computers and peripherals, telecommunication, precision machinery and biotechnology. According to the National Science Council, the combined revenues of these three science parks amounted to US$68.1 billion in 2010.

The Hsinchu Science Park, with 67 percent of its revenues coming from the IC industry, helped Taiwan maintain its dominant hold on the world IC market. In 2010, the companies in Taiwan’s IC industry generated US$35.1 billion in revenues. With one of the world’s densest clusters of 12-inch IC wafer foundries, Taiwan’s chipmakers are solidly positioned to keep the lead in contract manufacturing for years to come.

The ROC government has moved quickly to stimulate domestic demand as a means of sustaining growth momentum for the global economic recovery. An NT$500 billion (US$15.1 billion), four-year economic stimulus and public construction investment package was launched in 2009. It incorporates part of the “i-Taiwan 12 Projects,” covering transportation, industry, infrastructure and environmental conservation, which were a major plank in President Ma Ying-jeou’s campaign platform.

Economic Profile (2010)

GDP (nominal): US$430 billion

GDP per capita (nominal): US$18,603

GDP (PPP) per capita (estimate by IMF): US$31,776

Services accounted for 67.0 percent of GDP. Key players in this sector included wholesale and retail operations (18.2 percent of GDP); financial services, insurance, real estate and leasing businesses (15.0 percent); public administration and national defense (7.3 percent); and transportation and storage (3.0 percent).

Industries accounted for 31.4 percent of GDP. Key players in this sector included manufacturing (26.3 percent); construction (2.8 percent); and water, electricity, gas and remediation services (1.8 percent).

Agriculture accounted for 1.6 percent of GDP.

Trade and Investment Profile (2010)

Shoppers take in the leisurely and elegant evening ambiance at Dream Mall, an international shopping center in the southern city of Kaohsiung. (Chang Su-ching)

Bilateral trade volume: US$525.8 billion

Exports: US$274.6 billion

Imports: US$251.2 billion

Trade balance: US$23.4 billion surplus

Top export destinations: Mainland China (including Hong Kong) 41.8 percent, ASEAN-6* 15.1 percent, United States 11.5 percent, European Union 10.7 percent, Japan 6.6 percent, South Korea 3.9 percent

Top import sources: Japan 20.7 percent, mainland China (including Hong Kong) 15.0 percent, United States 10.1 percent, ASEAN-6 11.5 percent, European Union 10.4 percent, South Korea 6.4 percent

Foreign exchange reserves: US$400.7 billion (July 2011)

Registered inward investment: US$3.8 billion

Registered outward investment: US$15.1 billion (including US$12.2 billion bound for the Chinese mainland)

*ASEAN-6: Six of the 10 member states of the Association of Southeast Asian Nations, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam

Global Survey Rankings
 

Topic of Survey(Date of Publication)	Rank	Countries Surveyed	Surveying Institution
Investment climate (August 2011)	3	50	Business Environment Risk Intelligence
World Competitiveness Scoreboard (May 2011)	6	59	International Institute for Management Development
Networked Readiness Index 2010-2011 (April 2011)	6	138	World Economic Forum
Business environment ranking 2010-2014 (July 2010)	10	82	Economist Intelligence Unit
Digital economy ranking 2010 (June 2010)	12	70	Economist Intelligence Unit
Global Competitiveness Index 2011-2012 (September 2011)	13	142	World Economic Forum
Index of Economic Freedom 2011 (January 2011)	25	179	Heritage Foundation, Wall Street Journal

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