Summary

Taiwan’s economic history is typified by periods of boom and bust. Of note, after World War Two, many economists felt that Taiwan’s economy would not do well in the future due to a growing and already high population comparative to the land and natural resources available. This proved not to be the case as Taiwan’s economy boomed in the 60s before slowing in the 90s and experiencing recession through the 2000s. Taiwan now has a strong and sustainable economy which is ranked as one of the strongest economies in the Asia-Pacific region. Taiwan is today regarded as a globally indispensable economy with many larger countries being dependent on it for imports.

Economy and GDP

Taiwan’s industrialisation began with the development of factories and manufacturing businesses in the 60s which brought with it many jobs and export opportunities. In particular, Taiwan rapidly expanded in the textile, appliance, footwear, athletic equipment, and electronics manufacturing markets to became one of the world’s largest computer and computer components producers by the 1980s. 

In 2022, Taiwan was the world’s 17th largest merchandise exporter. Remarkably, Taiwan’s exports continued to grow during the global economic slowdown of the COVID-19 Pandemic off the back of emerging technology and global digital transformation business opportunity. Taiwan is home to the world’s largest semiconductor company – Taiwan Semiconductor Manufacturing Company Limited. This makes Taiwan the highest producer of semiconductors in the world, producing more than half of the world’s semiconductors. Taiwan is therefore crucial for electronics production in China as well as computer and telecommunications production in US owned companies such as Apple, Dell, and HP. 

Due to this, Taiwan places a great deal of emphasis on its industrial base, as well as the national and international supply chain to feed that industry. Interconnectedness between companies is encouraged to produce greater outputs for the economy. Taiwan sees this industrial base as an economic machine that drives prosperity for its people. Any disruption to that machine would not only impact Taiwan, but also the world.

The Taiwanese Minister for Economic Affairs has authority over state owned companies such as the Taiwan Power Company, the Petroleum Corporation, and Taiwan Water Corporation. This gives them the ability to influence those corporations to ensure they are maintaining service standards to the heavy industrial base. This gives them the power to positively impact economic output. 

For further information on the Taiwan economy, see the resources below:

Articles:

1. ECONOMY – Taiwan.gov.tw - Government Portal of the Republic of China (Taiwan)
2. Taiwan – Manufacturing, Trade, Technology | Britannica
3. Taiwan's Economic Opportunities and Challenges and the Importance of the Trans-Pacific Partnership | Brookings
4. Why Taiwan Matters – From an Economic Perspective (csis.org)

Videos:

1. How Taiwan Secretly Became an Economic Superpower (youtube.com)
2. How the China-Taiwan conflict could be devastating for the global economy | Business Beyond (youtube.com)
3. How a China attack on Taiwan could damage the economy (youtube.com)

Trade with Australia

Taiwan is an important trading partner for Australia and is not just a good export partner, it’s also a great importer of Australian goods. In 2022, Taiwan imported around $30 billion worth of Australian goods. In that same year Australia was Taiwan’s 12th largest export destination and 5th largest import source. Australia’s top exports to Taiwan included coal, natural gas, and iron ore. Australia’s top imports from Taiwan were refined petroleum, confidential items of trade, and telecommunications equipment and parts.

Australia and Taiwan hold annual Bilateral Economic Consultations, Joint Energy and Minerals, Trade and Investment Cooperation Consultations, and an Agricultural Working Group meeting. 

For further information on Taiwan trade with Australia, see the resources below:

Articles:

1. Taiwan Trade and Economic Fact Sheet
2. Australia-Taiwan relationship | Australian Government Department of Foreign Affairs and Trade (dfat.gov.au)
3. Taiwan | Australian Government Department of Foreign Affairs and Trade (dfat.gov.au)
4. Australia’s trade access agenda should take advantage of Taiwan | East Asia Forum