Transcript taiwanese economy

TAIWANESE
ECONOMY
OVERVIEW
General Overview of Taiwan’s Economy
Taiwan’s Economic Record
Taiwan as a Pioneer of and “Laboratory” for
Economic Policies
Lessons from the Taiwan Experience for
Developing Economies
Lessons for Taiwan from the Rest of the World
General Overview of the
Economy
GDP
Nominal: $466.8 billion (2011 est.)
PPP: $887.3 billion
PPP rank: 20th (2011 est.)
GDP growth: 1.74% (2013 est.)
General Overview of the
Economy
GDP per capita
Nominal: $18,300 (2010)
Nominal rank: 37th;
$21,592 (2011 IMF estimate)
PPP: $38,200 (2011 est.) PPP rank: 28th;
$37,931 (2011 IMF estimate, 18th)
General Overview of the
Economy
GDP by sector (2009)
services (tertiary) (69.2%)
industry (secondary) (29.2%)
agriculture (primary) (1.6%)
Inflation (CPI)
0.33% (2013 est.)
General Overview of the
Economy
Population below poverty: 1.16% (2010 est.)
Labor force: 11.2 million (2011 est.)
Labor force by occupation (2011 est.)
agriculture (5.2%)
industry (35.9%)
services (58.8%)
General Overview of the
Economy
Main industries: Electronics, communications and
information technology products, petroleum refining,
armaments, chemicals, textiles, iron and steel,
machinery, cement, food processing, vehicles,
consumer products, pharmaceuticals
Agricultural: Rice, corn, vegetables, fruit, tea; pigs,
poultry, beef, milk; fish
Natural: Small deposits of coal, natural gas, limestone,
marble, and asbestos
General Overview of the
Economy
Exports: $307.0 billion (2011 est.)
Export goods: Electronics, flat panels, machinery;
metals; textiles, plastics, chemicals; optical,
photographic, measuring, and medical
instruments (2011)
General Overview of the
Economy
Main export partners:
China 27.1%
Hong Kong 13.2%
United States 10.3%
Japan 6.4%
Singapore 4.4% (2012 est.)
General Overview of the
Economy
Imports: $279.2 billion (2011 est.)
Import goods: Electronics, machinery, crude
petroleum, precision instruments, organic
chemicals,
metals (2011)
Main import partners:
Japan 17.6%
China 16.1%
United States 9.5% (2012 est.)
General Overview of the
Economy
FDI stock
$64.2 billion (at home; 31 December
2011 est.); $213.1 billion (abroad; 31
December 2011 est.)
General Overview of the
Economy
Credit rating
Standard & Poor's:
AA- (Domestic)
AA- (Foreign)
AA+ (T&C Assessment)
Outlook: Stable
Moody's:
Aa3
Outlook: Stable
Fitch:
A+
Outlook: Stable
Economic Record
1. Taiwan is one of the first “Newly Industrialized
Economies” (NIEs) in East Asia.
2. Taiwan has done exceptionally well despite
relatively unfavorable resource endowment and
population density.
3. Taiwan survived the East Asian currency crisis
relatively unscathed, thanks to its large foreign
exchange reserves and low external debt.
Economic Record
4.. Over the last half century, real GNP and real GNP
per capita have grown from approximately US$6
billion to over US$300 billion and from slightly more
than US$700 to almost US$13,000 (2000 prices),
achieving rates of growth of more than 8% and 6% per
annum respectively.
How has it been able to
achieve this
remarkable economic
performance?
Pioneering Economic
Policies
*Land Reform —the successful (and peaceful) land
reform, one of the very few in the world, helped raise
agricultural productivity, improve the income
distribution, and release savings for investment in the
industrial sector.
*Promotion of Family Planning.
*Reliance on Private Rather Than Public Enterprise.
Pioneering Economic
Policies
*Export- Oriented Industrialization (as opposed to
import-substituting industrialization).
*Maintenance of Macroeconomic Stability.
*Maintaining Equity with Growth.
*Promoting the Transition from Tangible Capital -Based
to Intangible Capital -Based Industrialization.
LESSONS FROM THE
TAIWAN EXPERIENCE
The rate of growth of population must be brought
down to manageable levels before sustained
economic growth is possible.
The transformation from agriculture to industry is
inevitable.
Private enterprise can play a major and critical role.
LESSONS FROM THE
TAIWAN EXPERIENCE
A small economy with little or no natural resources
must be open in order to develop—the exchange rate
must therefore be set to equilibrate the supply and
demand for foreign exchange in the long term.
The transformation of the domestic savings rate is
essential for sustained economic growth.
Maintenance of macroeconomic stability is essential
for achieving balance of payments equilibrium and
promoting domestic savings.
LESSONS FROM THE
TAIWAN EXPERIENCE
Investment in human capital can not only increase
productivity but also improve the income distribution.
Investment in intangible capital (human capital and
R&D capital) can help to maintain economic growth
after sufficient tangible capital per worker has been
accumulated.
THE ECONOMIC FUTURE
OF TAIWAN: TRANSITION
TO A SERVICE
ECONOMY?
MODELS NOT TO
FOLLOW FOR TAIWAN
United States
The science base in Taiwan is too small to support
a full emulation of the United States—
Taiwan must be
much more selective.
Permanent agricultural price support is not a good
idea
Silicon Valley, US
High cost of housing
MODELS NOT TO
FOLLOW FOR TAIWAN
Japan (the Japanese disease)
More than a decade of stagnation
Heavy hand of government
Lack of a vision and a strategy
Inhospitable to start-up entrepreneurs
Asset price bubble
High leverage
Inefficient non-tradable sector
MODELS NOT TO
FOLLOW FOR TAIWAN
Hong Kong
Asset price bubble
South Korea
It is too late for Taiwan to develop some of the
traditional heavy industries, such as the
automobile.
The chaebols are not, in general, a good model for
the promotion of innovation (there is the same
problem with Japanese zaibatsu/keiretsu).
MODELS NOT TO
FOLLOW FOR TAIWAN
European Union (the Dutch disease)
The welfare state reduces the incentive to work
and to save and imposes a huge fiscal burden on
the government.
Legislation supposedly designed to protect
labor has made it almost impossible to dismiss any
worker in France and Germany.
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