Despite its proximity to mainland China, Taiwan has reported just 447 coronavirus cases and seven deaths so far in a population of 24 million (June 2020), garnering global praise for its strategy involving early screening and border controls. Taiwan’s economy has held up better than most Asian countries, thanks in part to how well it handled the coronavirus outbreak. Next to the stability, growth of the Taiwanese economy, and well-standing relationships with the Netherlands, we deem the location to be promising country for the FSA Research Project 2021.
With 23.7 million inhabitants, Taiwan is among the most densely populated countries, and is the most populous country in East Asia. Taiwan has been a prototype for fast economic growth, modernization and digitalization during the last two decades and it holds a strong position in the world economy. Becoming the seventh largest in Asia and 20th-largest in the world by purchasing power parity. It has a developed capitalist economy with most government firms being privatized and family owned businesses. Besides that, Taiwan is characterized by a high level of international trade, reputation for strong financial institutions and solid policy that have given it a strong sovereign bond rating in East Asia (AA-/Stable/A-1+). Exports of goods and services account for approximately one-third of total GDP, with technologically advanced electronics manufacturing as the primary drivers.
Industry in Taiwan primarily consists of many small and medium-sized enterprises (SME) with fewer large enterprises. Traditional labor-intensive industries are being moved off-shore and replaced with capital and technology-intensive industries. Taiwan’s largest operating sector is the service sector responsible for 63.5% of the GDP. The different businesses that fall under the service sector in Taiwan are: finance, insurance, and real estate; commerce, including wholesale and retail business, food and beverages, and international trade and telecommunications. The Industry sector accounts for 35.37% of GDP and employs about 36% of the labor force. Although traditional industries such as iron and steel, chemicals and machinery account for almost half of industrial production, new industries are the more dynamic. Namely, the semiconductor industry (including IC manufacturing, design, and packing) and the information technology industry. Taiwan is one of the world’s largest suppliers of semiconductors, computers, mobile phones and computer screens.
Europe and Taiwan
The EU’s interests in Taiwan are mainly informed by the island’s liberal democratic credentials. In its search for like-minded ideological and economic partners as China’s global power increases, cooperation and dialogue between Taiwan and the EU are intensifying. As such, economic ties between the EU and Taiwan are growing and EU exports to Taiwan hit a historic high of €51.9 billion in 2018. Taiwan controls a 74 per cent market share in chip manufacturing. Amid the fourth industrial revolution – focused on digitalization, emerging technologies and technology hubs – this a quite extraordinary position, which sparks the interest of other economies such as the EU, the US and China.