Country Report: Taiwan By Cynthia Huang

Economic Growth

Economic Growth Evaluation  2002: Taiwan joined WTO, world trade organization, which boosted its economy, since it made trade easier and more uniform.  2003: big decrease due to SARS. Also year that president Chen Shui-Bian really started pushing for Taiwan and China to remain as separate as possible. China did not view this happily, and so business might not have boomed as much.  2008: major decrease due to global financial crisis since Taiwan is mainly an export-oriented economy. If other countries can’t buy, then Taiwan suffers.  2010: major growth because year that ECFA signed pact that will bring Taiwan and China closer together. Made it easier to trade between the two countries. Prediction  -following the trend, in 2013, the first two quarters will be a decrease in economic growth followed by a reasonable increase for the following 2 quarters. Since president Ma Ying-Jeou, who is pro- China and wants to unite with them, has been elected again, we can expect to see more communication with China and perhaps an overall increase in business relationships.

Unemployment

Unemployment Evaluation  Rather low rates since there are many labor-intensive companies that can continue to employ many Taiwanese. Also, exports from Taiwan have been strong. As an export- oriented country, companies can continue to run.  high unemployment in 2009 due to global recession.  In 2010, government worked hard to decrease unemployment rates, and their successful results can be seen in the graph. Prediction  Unemployment will continue to decrease. However, it is also possible that with closer relationships to China, more and more companies will begin to start-up in China, taking away jobs and opportunities for many Taiwanese, which will lead to an increase in unemployment. However, this most likely will not happen next year. More time is needed for something like this to happen.

Inflation

Inflation Evaluation  rather equal, since Taiwan focuses heavily on maintaining “high economic growth and price stability” [Economic Development R.O.C. (Taiwan)].  : low inflation since the IT bubble burst, and so prices of goods subsequently dropped.  : high inflation due to global financial crisis and high crude oil and raw material prices  2012: government’s goal is to keep inflation at about 2%, according to Focus Taiwan News Travel. Prediction  - based on current trends, inflation will stay really low. Although, oil prices have been increasing, the government concentrates heavily on maintaining a set inflation rate. o/TwvZd40l_QI/AAAAAAAAAQQ/Z4t oHpUfAt4/s1600/economic_growth_ jpg

Balance of Trade

Balance of Trade Evaluation  Positive, since Taiwan exports more than it imports. Prediction  Will continue to increase. Taiwan imports the most from Japan. This will probably change because of the big earthquake, making goods from Japan scarce, and so Taiwan might have to look at other sources or just do without them for now.

Equality of Income

Equality of Income Evaluation Rather equal. Ranked at 105 in world by CIA World Factbook. Even when the rich began to earn a lot more, the government stepped in and brought about many social welfare measures to make incomes more equal.

Government Debt

Government Debt Evaluation  The root cause, according to the Taipei Times, is that Taiwan spends a lot but continues to cut taxes. Where is the revenue coming from?  Following this, according to alibaba.com, Taiwan had big debt in 2009, carrying over to 2010 because it had lowered income tax. Prediction  Unless the government is prepared to begin increasing taxes or decreasing the costs of running many public facilities or social benefits, the government debt does not look like it will be decreasing anytime soon.

Annual government budgets (spending and taxes)

Annual government budgets Evaluation  The budget is tied to its debt. Taiwan’s debt is caused by over- spending and continuous cutting of taxes. Much of the budget is spent on social welfare, such as pensions for teachers, public servants, and war veterans, according to the Taipei Times. More than NT $200 billion is spent annually just on that. Prediction  Elections have just been held and President Ma has promised many things, but none that will help increase the government budget. Unless the government begins to carefully manage their budget, we should not expect to see a big change in the budget amount. hnstonpursel.jpg

謝謝！ 臺灣

Sources  United States. CIA. CIA – The World Factbook. CIA. Web. 21 Mar  Zhong-Xian Yu. "The Fruits of Economic Development." The Story of Taiwan. Government Information Office, Republic of China (Taiwan). Web. 5 Apr  Taiwan's Economic Development Foundation. Rep. Bureau of Foreign Trade. Web. 5 Apr  "Taiwan's Economy." AsianInfo.org. K. Lee. Web. 5 Apr  Directorate-General of Budget, Accounting and Statistics, Executive Yuan. Economic Development, R.O.C. (Taiwan). Taipei City: Council for Economic Planning and Development, Taipei, R.O.C. (Taiwan), Web. 2 Apr  Huang Juei-min. "Taiwan's Debt Deserves Attention." Taipei Times. 29 Jan Web. 5 Apr  Tang, Hsiao-Tien, and C.J. Lin. "Government Seeks to Keep 2012 Inflation Rate within 2%." FOCUS TAIWAN. 03 Apr Web. 5 Apr