Taiwan’s economy has outperformed its major regional rivals from 2019 to 2022, according to the National Development Council (NDC). This success is attributed to a range of government policies aimed at attracting capital repatriation, improving infrastructure, assisting strategic sectors, and facilitating industrial upgrades.
The NDC’s statement was a response to criticism from the Chinese Nationalist Party (KMT) presidential candidate Hou You-yi’s campaign office, which labeled Taiwan’s economy as underperforming. Contrary to these claims, the NDC highlighted Taiwan’s leading position in GDP growth among the four Asian Tigers – Hong Kong, Singapore, South Korea, and Taiwan. These economies have been driven by export-led growth and rapid industrialization since the 1960s.
In 2022, the Taiwan Stock Exchange (TAIEX) outperformed the Hong Kong bourse, marked by significant capital inflows in November and December. This is consistent with the recovery expectations of global funds for technology products.
Taiwan achieved the status of the world’s 21st-largest economy in 2022, with an annual per capita income exceeding US$30,000. The country ranks as the 10th best performer among nations with more than 21 million people and the second strongest in terms of purchasing power parity.
The government’s Invest Taiwan program has been pivotal, encouraging local firms in China to relocate manufacturing facilities to Taiwan under favorable investment terms amid US-China trade tensions. Additionally, the government has supported the “five plus two” industries – including the Asian Silicon Valley initiative, biomedical technology, green energy, robotics, defense and aviation, innovative agriculture, and a circular economy.
Infrastructure investments have been made to bridge development gaps across different regions of Taiwan. The country also managed to maintain robust manufacturing operations during the COVID-19 pandemic, supplying essential technology products globally.
Over the past eight years, Taiwan’s GDP growth has averaged 3.1%, surpassing Singapore, South Korea, and Hong Kong. This period also saw a cumulated foreign investment of NT$2.49 trillion (US$80.32 billion), with 2022’s foreign direct investment hitting a 15-year high at US$13.3 billion.
Despite these achievements, Taiwan faces challenges, such as widening income gaps due to shrinking household sizes and a rapidly aging population. However, Taiwan’s Gini coefficient, a measure of income inequality, stood at 0.277 in 2021, lower than that of South Korea, Singapore, and China, indicating relatively mild income disparity.
