ECONOMY

Taiwan holds an important position in the global economy. It is a top player in the world’s information and communications 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 importer of merchandise in 2022. It was also one of the largest holders of foreign exchange reserves as of December 2022. According to the International Monetary Fund, Taiwan’s gross domestic product per capita reached US$32,756 in 2022. In terms of nominal GDP, Taiwan ranks close to Poland and Switzerland, while its GDP per capita expressed as purchasing power parity is similar to that of the Bahamas and South Korea.

In 2021, as the COVID-19 pandemic eased, global economic activity gradually returned to pre-pandemic levels. In 2022, the global economy benefitted from emerging technology and digital transformation business opportunities. Although the second half of the year was affected by the slowdown in the global economy, Taiwan’s annual import and export figures still hit record highs, with a total value of US$907.4 billion, for an increase of 9.6 percent. Specifically, Taiwan’s exports and imports increased 7.4 percent and 12.1 percent, respectively.

Annual surveys of the world’s economies, including those conducted by the International Institute for Management Development and Business Environment Risk Intelligence have ranked Taiwan among the top nations year after year with respect to long-term growth and technological development. Results announced in 2023 were no exception (see table “Global Survey Rankings”).

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 exceed WTO commitments. Developments like these are expected to facilitate Taiwan’s participation in regional economic integration blocs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Regional Comprehensive Economic Partnership.

Taiwan and the U.S. held the third Taiwan-U.S. Economic Prosperity Partnership Dialogue in November 2022 and the signed the first agreement under Taiwan- U.S. Initiative on 21st-Century Trade in June 2023. Taiwan also signed economic cooperation agreements with Paraguay, the Kingdom of Eswatini and Belize in 2017, 2018 and 2020, respectively. These agreements are aimed at strengthening economic, investment, technological and trade ties while enhancing friendship with the three countries.

In 2016, the Taiwan government launched a new industrial development policy to expedite transformation and upgrades. This policy was the Five Plus Two Industrial Innovation Plan and became the key factor in driving industrial growth in next-generation smart machinery, Asian Silicon Valley, biotech & pharmaceuticals, green energy, national defense, new agriculture and circular economy.

In 2020, building on previous policies, six core strategic industries were identified to link the Investing in Taiwan’s Three Major Plans of 2019. These were: information and digital, cybersecurity, precision health, national defense and strategy, green and renewable energy, and strategic stockpile industries. These will enhance Taiwan’s overall industrial development and create a better investment environment for sector transformation and upgrades.

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 childcare facilities, and nurturing talent and employment.

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 land-use planning and regional growth strategies to foster sustainable development while promoting the use of green energy resources.

To respond to the challenges of the post-pandemic global economy in 2023, the government passed the “Special Act for Enhancing Post-pandemic Economic and Social Resilience and National Sharing Economy Achievement” with a budget of US$125 billion, which will help reduce financial burdens, stabilize consumer prices, restructure the industrial sector and maintain economic momentum.

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.