Taiwan: Encyclopedia II - Taiwan - Economy

Taiwan - Economy

Main article: Economy of Taiwan

Taiwan has a dynamic capitalist economy with gradually decreasing state involvement in investment and foreign trade. In keeping with this trend, the government is privatizing some large banks and industrial firms. Real growth in gross domestic product has averaged about 8 percent during the past three decades. Exports have provided the primary impetus for industrialization. The trade surplus is substantial, and foreign reserves are the world's third largest. Taiwan's current GDP per capita is $27,122, ranking 23rd in the world.

The ROC has its own currency: the New Taiwan Dollar.

Agriculture constitutes only 2 percent of GDP, down from 35 percent in 1952. Traditional labor-intensive industries are moving steadily offshore, with more capital- and technology-intensive industries replacing them. Taiwan has become a major investor in mainland China, Thailand, Indonesia, the Philippines, Malaysia and Vietnam; around 50,000 Taiwanese businesses are established in mainland China. Taiwan is one of the largest foreign investors in mainland China.

Because of its conservative financial approach and its entrepreneurial strengths, Taiwan suffered little compared with many of its neighbors from the Asian financial crisis in 1998–1999. The global economic downturn, however, combined with poor policy coordination by the new administration and increasing bad debts in the banking system, pushed Taiwan into recession in 2001, the first whole year of negative growth since 1947. Due to the relocation of many manufacturing and labor-intensive industries to mainland China, unemployment also peaked at a level last seen during the 1970s oil crisis. This problem became one of the major issues in the presidential election of 2004. The unemployment rate eventually declined after the government adopted a few economy-stimulating measures.

The ROC has entered international governmental trade organizations such as the World Trade Organization and APEC under the name Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (台灣、澎湖、金門及馬祖個別關稅領域) in WTO and under the name Chinese Taipei in APEC. Although the PRC objects to having other countries maintain diplomatic or official relations with the ROC, it made no objection to having the ROC maintain economic relations. However, under PRC pressure, the ROC joined governmental organizations under different names.

The opening of the Taipei Financial Center, also known as Taipei 101 due to its number of floors, on December 31, 2004, brought more world recognition to Taiwan and Taipei. Taipei 101, equipped with the world's fastest elevators, is the world's tallest building. The surrounding financial district is steadily becoming more recognized in the world market, and a trendy shopping district is rapidly growing around it as well.

Along with Singapore, South Korea and Hong Kong, Taiwan is known as one of the East Asian Tigers.

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Adapted from the Wikipedia article "Economy", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki