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Changing economic trends in Taiwan

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TAIWAN’S economic growth has long been based on exporting intermediate goods to mainland China for final assembly, but this is now showing signs of change. Taiwan’s monthly exports to China and Hong Kong have registered negative growth since November 2018 according to Taiwan’s official statistics.

In January–June 2019, Taiwan’s exports to China and Hong Kong shrank by 8.8 percent compared to the same period in 2018. In comparison, Taiwan’s exports to the United States grew by 17.4 percent. Overall exports declined by 3.4 percent during the same period.

As a result, China’s share in Taiwan’s total exports declined from 41 percent in 2017 to less than 39 percent in the first half of 2019. China’s falling significance was balanced by the growth of exports to the United States from 12 percent to 14 percent during the same period.

Taiwan’s decreasing investment in China explains the shrinking exports to the country. Although China remains Taiwan’s largest outward investment destination, its importance has dropped to 37 percent in the first half of 2019 from its peak of 84 percent in 2010.

SEE ALSO: Taiwan bars former top officials from Chinese political events

Taiwan’s decreasing investment in and export to China has been caused by China’s transformation towards a more consumption-based economy. The growing trade dispute between the United States and China has accelerated the shift in Taiwanese investment away........

© Asian Correspondent