Taiwan sells almost half of its exports to China, despite its anti-communist stance

Taiwan’s exports grew rapidly in 2021, especially to China. China accounts for 42.3% of total exports. Taiwanese officials recently revised their 2021 economic growth estimates from 6.09 percent to 6.28 percent, both of which were the highest in 11 years. According to experts, Taiwan’s trade surplus with China continues to grow, indicating that China is heavily dependent on Taiwan.

Taiwan’s economy grew at a rate of 6.28% last year, 19% higher than expected in November, according to the latest figures released by the Directorate General of Budget on January 27.

In fact, the estimated 6.09 percent growth last year was already very high. After the figures were released, Taiwan’s Vice President Lai Ching-te said on December 28 that Taiwan’s epidemic control and prevention over the past two years has been relatively successful. Thus, the country was less affected by the epidemic and its economy was stronger than the others. Taiwan has been ranked number one in the “Four Asian Tigers” (Singapore, Taiwan, South Korea, Hong Kong) for the second consecutive year. Wu Darren, CEO of National Central University’s Taiwan Economic Center, said that the main reason for Taiwan’s outstanding economic performance last year was that both manufacturing exports and private investment in the country were very strong. Said that it was.

The main growth engine of Taiwan’s economy is exports. According to the investment information platform MacroMicro, Taiwan’s exports account for more than 60% of total GDP, and the main export products are electronic components, telecommunications and audiovisual products.

The semiconductor industry is the largest contributor to manufacturing exports. The semiconductor industry is known as the backbone of Taiwan’s economy, and TSMC is the most prominent performer. Due to the global chip shortage, TSMC’s strategic position has risen and semiconductors have become Taiwan’s fastest growing export item.

The most important source of private investment is the continued expansion of investment by technology companies such as TSMC and related supply chains. TSMC alone invested $ 30.40 billion last year, accounting for about 4 percent of Taiwan’s $ 760 billion economy. In addition, the telecommunications industry continues to invest in 5G infrastructure, the aviation industry expands its capabilities, invests in supply chain localization, and the government encourages investment in public green energy facilities. All of these make important contributions to economic growth.

In addition, Mr. Wu said China’s curbing energy consumption and the outbreak of an epidemic in Southeast Asia also brought great benefits to Taiwan. Due to the increase in domestic demand in Taiwan, many industry players have started to expand the factory, which has boosted the construction industry.

Trade surplus reflects China’s dependence on Taiwan

Taiwan’s largest export market is China. According to the Ministry of Finance, the Chinese market (including Hong Kong) accounted for 42.3% of Taiwan’s total exports last year, slightly below the 10-year high of 43.9% set in 2020, second and third. It far exceeds the second largest market. The export markets, ASEAN and the United States, accounted for 15.7% and 14.7%, respectively.

According to data from the General Administration of Customs of the People’s Republic of China, Taiwan’s total exports to China (excluding Hong Kong) were $ 24.999 trillion last year, up 24.7% year-on-year, while Taiwan’s total imports from China were year-on-year. It increased by 30.4% to 78.36 billion dollars. Taiwan’s trade surplus with China reached $ 171.6 billion, an increase of $ 31.1 billion from 2020.

According to the Ministry of Finance of Taiwan, exports to China (including Hong Kong) last year increased 24.8% year-on-year to $ 18.890.6 billion, and imports from China increased 29.9% year-on-year to $ 8.417 billion. Last year, Taiwan’s trade surplus with China was $ 104.73 billion, which is also over $ 100 billion.

Taiwanese economist and veteran political economy critic Wu Jia Long said that the fact that Taiwan enjoys a growing trade surplus with China means that Taiwan is dependent on China. Instead, he said it meant that China was dependent on Taiwan. As for the technology supply chain, Taiwan is upstream and China’s production line is downstream. Taiwan’s trade surplus with China reflects China’s demand and dependence on Taiwan.

In May 2021, Taiwan’s Ministry of Economy made a prominent headline to refute former President Ma Ying-jeou’s interpretation of “Taiwan’s dependence on China.” Dependence on Taiwan. “

Taiwan may be heading for “Economic Miracle 2.0”

The Executive Yuan Directorate General maintained the forecast of 4.15% economic growth in November of this year, but the outbreak of the Omicron variant from the beginning of the year raises concerns about whether the economy can sustain 4. This year’s growth rate.

However, Wu Jia Long said the United States and China had moved from reconciliation to confrontation. With the separation of the US and Chinese economies, the withdrawal of manufacturing from China, and Taiwan facing structural changes that normally last about 20 years, he continued for 20 years in the second half of the last century, “Taiwan’s economic miracle. Is estimated. It may happen again.

Wu said it would not be easy to maintain the same high growth next year, fearing that the base period has already grown sufficiently in the case of high growth. But now we are facing structural changes, with a large number of Taiwanese businessmen returning and capital flowing backwards. It will end in 2 years. “

Mr. Wu emphasized that Taiwanese companies are inevitably leaving mainland China, some returning to Taiwan and some returning to other countries. Regarding the reason for the return, “Taiwanese businessmen must avoid US tariffs by re-exporting goods. On the other hand, the Chinese Communist Party’s financial shortage says,” Because of lack of food, chickens With the saying, “Kill and lay eggs,” it will surely take action against Taiwanese and mainland companies.

“Apart from the resurgence of Taiwanese companies, the semiconductor and green energy industries will continue to attract investment. Not only that, because Taiwan has the most complete supply chain in the world, artificial intelligence, big data, meta-universe, Emerging technology sectors such as 3rd generation semiconductors will all attract large investments. “

Mr. Wu has not given a concrete estimate of Taiwan’s economic growth in 2022, but “the second wave of Taiwan’s economic miracle lasted for 20 years in the second half of the year, so there is no need to worry about Taiwan’s domestic demand. The century will come again, and we can call it “Taiwan Economic Miracle 2.0”. “

Taiwan semiconductor industry continues to grow

Bloomberg reported on January 27 that TSMC is building a new factory this year to alleviate the semiconductor shortage and expects to invest between $ 40 billion and $ 44 billion. Taiwan’s growth outlook for 2022 remains optimistic, as this investment represents about 5% of Taiwan’s $ 760 billion economy.

In an interview with The Epoch Times, Researcher Liu Pingjin of the Taiwan Institute of Economic Research said that semiconductor applications are ubiquitous and in increasing demand in the light of digital and energy transformation trends. The semiconductor market will continue to grow both in Taiwan and around the world this year, and TSMC, a leader in advanced manufacturing processes, will grow even more this year.

She also said the US-China technology war would offer Taiwan more business opportunities. China’s semiconductor industry is stagnant as the United States imposes various regulations and restricts access to important semiconductor equipment and chips through its allies, and its end-use market inevitably becomes Taiwan’s semiconductor supply. Depends on.

Epoch Times reporter Joyce Liang contributed to this report.

Winnie Han


Winnie Han reports on the Chinese news of The Epoch Times.

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