 Taipei, the capital and financial center of Taiwan | |
| Currency | New Taiwan dollar (TWD) |
|---|---|
| Calendar year | |
Trade organizations | WTO,APEC andICC |
Country group | |
| Statistics | |
| Population |  23,196,178 (May 2022)[3] |
| GDP | |
| GDP rank | |
GDP growth |
|
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
| 1.66% (April 2025)[8] | |
Population belowpoverty line |  1.13% (2024)[9][note 1] |
| 33.9medium (2023 est.)[7] | |
 0.926very high (2021)[note 2] | |
 67 (2024)[16] (25th) | |
Labor force | 12.001 million (2024)[17] 59.3% participation rate (2024)[17] |
Labor force by occupation |
|
| Unemployment | 3.35% (2025)[8] |
Average gross salary | NT$ 60,984 US$2,026 per month (2024)[18] |
Main industries |
|
| External | |
| Exports | $475 billion (2024)[19] |
Export goods | Semiconductors, petrochemicals, automobile/auto parts, ships, wireless communication equipment, flat panel displays, steel, electronics, plastics, computers |
Main export partners |
|
| Imports | $394 billion (2024)[19] |
Import goods | Oil/petroleum, semiconductors, natural gas, coal, steel, computers, wireless communication equipment, automobiles, fine chemicals, textiles |
Main import partners |
|
FDI stock | |
| $112 billion (2024)[21] | |
Grossexternal debt |  $219.947 billion (2024)[22] |
| 1.556 trillion (2024)[23] | |
| Public finances | |
| 27.1% of GDP (2024)[24] | |
| $600 billion (Oct 2025)[25] | |
| −0.2% (of GDP) (2022 est.)[7] | |
| Revenues | TWD 4.18 trillion (2024)[26] USD 133 billion[note 3] |
| Expenses | TWD 4.07 trillion (2024)[27] USD 130 billion[note 4] |
All values, unless otherwise stated, are inUS dollars. | |
Taiwan is ahighly developedfree-market economy. It is the 8th-largest in Asia and21st-largest in the world bypurchasing power parity, allowing Taiwan to be included in the advanced economies group by theInternational Monetary Fund.[33] Taiwan is notable for its rapid economic development from an agriculture-based society to an industrialized,high-income country. This economic growth has been described as theTaiwan Miracle. It is gauged in the high-income economies group by theWorld Bank.[34] Taiwan is one of the leading producers ofcomputer microchip andhigh-tech electronics.[35][36][37]
Taiwan has transformed itself from a recipient of U.S. aid in the 1950s and early 1960s to an aid donor and major foreign investor, with investments primarily centered in Asia. Private Taiwanese investment in mainland China is estimated to total in excess of US$150 billion,[38][better source needed] and official tallies cite Taiwan as having invested a comparable amount in Southeast Asia.
In 1949, over two million Kuomintang supporters fled to the island following the loss ofMainland China in theChinese Civil War.[39][40][41] The sudden increase in population also affected Taiwan's economy.
Facing the economic pressure, the Kuomintang regime established several economic plans and policies. The first step towards industrialization was land reforms, a crucial step in modernizing the economy, as it created a class of landowners with the capital they could invest in future economic endeavors. US aid was also important in stabilizing post-war Taiwan, and it constituted more than 30 percent of domestic investment from 1951 to 1962. These factors, together with government planning and universal education, brought rapid advancements in industry and agriculture, and living standards. The economy shifted from an agriculture-based economy (32% of GDP in 1952) to an industry-oriented economy (47% of GDP in 1986).[42][better source needed] Between 1952 and 1961, the economy grew by an average of 9.21% each year.[42][better source needed]
The transformation of Taiwan's economy has been influenced by broader geopolitical dynamics. Although aid was cut back in the 1970s, it was crucial in its formative years, spurring industrialization, and security and economic links between Taiwan and the United States were maintained. Uncertainty about the US commitment accelerated the country's shift from subsidized import-substitution in the 1950s toexport-led growth. The development of foreign trade and exports helped absorb excess labor from a decreased importance of agriculture in the economy.[42][better source needed]Taiwan moved from cheap, labor-intensive manufactures, such as textiles and toys, into an expansion of heavy industry and infrastructure in the 1970s and then to advanced electronics in the subsequent decade. By the 1980s, the economy was becoming increasingly open, and the government moved towards the privatization of government enterprises.[42][better source needed] Technological development led to the establishment of theHsinchu Science Park in 1981. Investments inmainland China spurred cross-strait trade, decreasing Taiwan's dependence on the United States market.[42][better source needed] From 1981 to 1995, the economy grew at an annual rate of 7.52%, and the service sector became the largest sector at 51.67%, surpassing the industrial sector and becoming a major source of the economy's growth.
International Trade is officially assisted byTaiwan External Trade Development Council.[43] Because of the financial policy[44] by theCentral Bank of the Republic of China (Taiwan) and its entrepreneurial strengths,[45] Taiwan suffered little from the1997 Asian financial crisis compared to other economies in the region.
The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2021–2027). Inflation under 5% is in green.[46]
| Year | GDP (in Bil. US$PPP) | GDP per capita (in US$ PPP) | GDP (in Bil. US$nominal) | GDP per capita (in US$ nominal) | GDP growth (real) | Inflation rate (in Percent) | Unemployment (in Percent) | Government debt (in % of GDP) |
|---|---|---|---|---|---|---|---|---|
| 1980 | 61.6 | 3,446.2 | 42.3 | 2,366.8 | 8.0% | 19.0% | 1.2% | n/a |
| 1981 | 72.2 | 3,967.2 | 49.0 | 2,691.5 | 7.1% | 15.7% | 1.4% | n/a |
| 1982 | 80.3 | 4,338.3 | 49.5 | 2,675.3 | 4.8% | 3.0% | 2.1% | n/a |
| 1983 | 91.0 | 4,843.1 | 54.1 | 2,881.7 | 9.0% | 1.4% | 2.7% | n/a |
| 1984 | 103.8 | 5,441.4 | 61.1 | 3,202.6 | 10.0% | 0.0% | 2.5% | n/a |
| 1985 | 112.2 | 5,808.8 | 63.6 | 3,293.9 | 4.8% | -0.2% | 2.9% | n/a |
| 1986 | 127.6 | 6,541.8 | 78.2 | 4,008.1 | 11.5% | 0.7% | 2.7% | n/a |
| 1987 | 147.5 | 7,475.6 | 105.0 | 5,325.2 | 12.8% | 0.5% | 2.0% | n/a |
| 1988 | 164.9 | 8,264.1 | 126.5 | 6,338.1 | 8.0% | 1.3% | 1.7% | n/a |
| 1989 | 186.3 | 9,243.6 | 152.7 | 7,575.9 | 8.7% | 4.4% | 1.6% | n/a |
| 1990 | 204.0 | 9,999.4 | 166.6 | 8,167.2 | 5.5% | 4.1% | 1.7% | n/a |
| 1991 | 228.6 | 11,091.9 | 187.1 | 9,081.9 | 8.4% | 3.6% | 1.5% | n/a |
| 1992 | 253.2 | 12,171.2 | 222.9 | 10,715.5 | 8.3% | 4.5% | 1.5% | n/a |
| 1993 | 276.9 | 13,186.4 | 236.3 | 11,256.7 | 6.8% | 2.9% | 1.5% | n/a |
| 1994 | 304.0 | 14,353.8 | 256.2 | 12,099.7 | 7.5% | 4.1% | 1.6% | n/a |
| 1995 | 330.5 | 15,475.9 | 279.1 | 13,066.1 | 6.5% | 3.7% | 1.8% | n/a |
| 1996 | 357.4 | 16,602.1 | 292.5 | 13,588.3 | 6.2% | 3.1% | 2.6% | n/a |
| 1997 | 385.5 | 17,731.3 | 303.3 | 13,948.7 | 6.1% | 0.9% | 2.7% | 25.0% |
| 1998 | 406.3 | 18,526.5 | 280.0 | 12,767.1 | 4.2% | 1.7% | 2.7% | 23.7% |
| 1999 | 439.7 | 19,903.7 | 303.8 | 13,752.7 | 6.7% | 0.2% | 2.9% | 23.7% |
| 2000 | 478.1 | 21,460.9 | 330.7 | 14,844.2 | 6.3% | 1.3% | 3.0% | 26.2% |
| 2001 | 482.0 | 21,512.3 | 299.3 | 13,357.2 | -1.4% | 0.0% | 4.6% | 30.1% |
| 2002 | 516.3 | 22,927.3 | 307.4 | 13,651.4 | 5.5% | -0.2% | 5.2% | 29.8% |
| 2003 | 548.8 | 24,277.2 | 317.4 | 14,040.6 | 4.2% | -0.3% | 5.0% | 32.2% |
| 2004 | 602.7 | 26,562.5 | 346.9 | 15,290.3 | 7.0% | 1.6% | 4.4% | 33.4% |
| 2005 | 655.0 | 28,767.3 | 374.1 | 16,427.5 | 5.4% | 2.3% | 4.1% | 34.1% |
| 2006 | 714.2 | 31,220.7 | 386.5 | 16,892.9 | 5.8% | 0.6% | 3.9% | 33.3% |
| 2007 | 783.8 | 34,138.8 | 406.9 | 17,723.7 | 6.9% | 1.8% | 3.9% | 32.2% |
| 2008 | 805.2 | 34,951.8 | 415.9 | 18,053.6 | 0.8% | 3.5% | 4.1% | 33.4% |
| 2009 | 797.3 | 34,484.6 | 390.8 | 16,904.5 | -1.6% | -0.9% | 5.9% | 36.7% |
| 2010 | 889.5 | 38,404.3 | 444.3 | 19,181.4 | 10.2% | 1.0% | 5.2% | 36.9% |
| 2011 | 941.4 | 40,532.6 | 484.0 | 20,838.6 | 3.7% | 1.4% | 4.4% | 38.3% |
| 2012 | 973.2 | 41,741.3 | 495.6 | 21,256.4 | 2.2% | 1.9% | 4.2% | 39.2% |
| 2013 | 1,015.2 | 43,435.5 | 512.9 | 21,945.5 | 2.5% | 0.8% | 4.2% | 38.9% |
| 2014 | 1,066.1 | 45,494.3 | 535.3 | 22,844.3 | 4.7% | 1.2% | 4.0% | 37.5% |
| 2015 | 1,102.0 | 46,911.0 | 534.5 | 22,753.0 | 1.5% | -0.3% | 3.8% | 35.9% |
| 2016 | 1,112.8 | 47,272.3 | 543.1 | 23,070.7 | 2.2% | 1.4% | 3.9% | 35.4% |
| 2017 | 1,143.2 | 48,500.8 | 590.7 | 25,061.6 | 3.3% | 0.6% | 3.8% | 34.5% |
| 2018 | 1,203.2 | 51,005.0 | 609.2 | 25,825.6 | 2.8% | 1.4% | 3.7% | 33.9% |
| 2019 | 1,262.2 | 53,476.0 | 611.4 | 25,903.2 | 3.1% | 0.6% | 3.7% | 32.7% |
| 2020 | 1,320.3 | 56,037.8 | 669.3 | 28,404.7 | 3.4% | -0.2% | 3.9% | 32.6% |
| 2021 | 1,465.5 | 62,696.1 | 774.7 | 33,143.0 | 6.6% | 2.0% | 4.0% | 28.4% |
| 2022 | 1,621.7 | 69,500.0 | 828.7 | 35,513.2 | 3.3% | 3.1% | 3.6% | 24.1% |
| 2023 | 1,727.2 | 74,066.5 | 859.0 | 36,833.9 | 2.8% | 2.2% | 3.6% | 22.1% |
| 2024 | 1,801.1 | 77,231.7 | 901.6 | 38,662.5 | 2.1% | 1.4% | 3.6% | 20.2% |
| 2025 | 1,871.4 | 80,247.1 | 948.5 | 40,673.6 | 2.0% | 1.4% | 3.6% | 18.1% |
| 2026 | 1,945.2 | 83,412.7 | 996.8 | 42,745.0 | 2.0% | 1.4% | 3.6% | 16.2% |
| 2027 | 2,022.6 | 86,730.1 | 1,045.2 | 44,820.8 | 2.0% | 1.4% | 3.6% | 14.4% |
As of 2021, the three highest-paid sectors in Taiwan includetelecommunication service,financial services, andinformation services.[47] The economy of Taiwan ranked the highest in Asia in the 2015 Global Entrepreneurship Index (GEI).[48] With thetechnocracy-centeredeconomic planning[49] until 1987, real growth in GDP has averaged about 8% during the past three decades. Exports have grown sinceWorld War II, with inflation and unemployment staying low and foreign reserves being the world's fourth largest.Directorate General of Budget, Accounting and Statistics[50] andMinistry of Economic Affairs[51] release major economic indicators of the economy of Taiwan.
Taiwan now faces many of the same economic issues as other developed economies. With the prospect of continued relocation of labor-intensive industries to economies with cheaper workforces, such as in mainland China, the Philippines, and Vietnam, Taiwan's future development will have to rely on further transformation to a high-technology and service-oriented economy.[52] In recent years, Taiwan has successfully diversified its trade markets, cutting its share of exports to the United States from 49% in 1984 to 20% in 2002. Taiwan's dependence on the United States should continue to decrease as its exports to Southeast Asia and mainland China grow, and its efforts to develop European markets produce results.[53] Taiwan's accession to the WTO and its desire to become an Asia-Pacific "regional operations center" are spurring further economic liberalization. The economy of Taiwan is facing economic marginalization in the world economy[54] de-internationalization and lower salaries. This results in human resource talents seeking career opportunities elsewhere. Businesses in Taiwan suffer most from being the size of small and medium enterprises, which impedes attempts at economic transformation in Taiwan by the Taiwanese government.[55]
Theindirect tax system of the economy of Taiwan comprises Gross Business Receipts Tax (GBRT) (gross receipts tax) andvalue-added tax (VAT).[56] The economy of Taiwan is ranked 15th overall in the Global Top 20 Top Destination Cities by International Overnight Visitors (2014) by the MasterCard 2014 Global Destination Cities Index.[57]
In addition, economic inequality, as measured by theGini coefficient, has been on the rise in Taiwan, rising from a value of 0.47 in 1980 to 0.61 in 2022 (before considering taxes and welfare transfers). Post-tax GINI was 0.32, similar to most other developed countries.[58][59]
Taiwan recovered quickly from the2008 financial crisis and theGreat Recession, and its economy has been growing steadily since. Its economy faced a downturn in 2009 due to a heavy reliance on exports which in turn made it vulnerable to world markets.[53] Unemployment reached levels not seen since 2003, and the economy fell 8.36% in the fourth quarter of 2008.[52] In response, the government launched a US$5.6 billion economic stimulus package (3% of its GDP), provided financial incentives for businesses, and introduced tax breaks.[52] The stimulus package focused on infrastructure development, small and medium-sized businesses, tax breaks for new investments, and low-income households.[52] Boosting shipments to new overseas markets, such as Russia,Brazil, and the Middle East, was also a main goal of the stimulus.[52] The economy has since slowly recovered; by November 2010, Taiwan's unemployment rate had fallen to a two-year low of 4.73%,[60] and continued dropping to a 40-month low of 4.18% by the end of 2011.[61] The average salary has also been rising steadily for each month in 2010, up 1.92% from the same period in 2009.[62]Industrial output for November 2010 reached another high, up 19.37% from a year earlier, indicating strong exports and a growing local economy.[63]Private consumption is also increasing, with retail sales up 6.4% compared to 2009.[64] After 10.5% economic growth in 2010, theWorld Bank expected growth to continue and reach 5% for 2011.[65]
According to theNational Development Council, Taiwan's economy declined in May 2019 due to the ongoingChina–United States trade war.[66]
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Foreign trade has been the engine of Taiwan's rapid growth during the past 40 years. Taiwan's economy remains export-oriented; thus, it depends on an open world trade regime and remains vulnerable to downturns in the world economy. The total value of trade increased over fivefold in the 1960s, nearly tenfold in the 1970s, and doubled again in the 1980s.[69] The 1990s saw a more modest, slightly less than twofold, growth. Export composition changed from predominantly agricultural commodities to industrial goods (now 98%). The electronics sector is Taiwan's most important industrial export sector and is the largest recipient of United States investment.
Taiwan is a member of numerous trade agreements, withChina,Japan,USA, theEuropean Union, andHong Kong as top 5 trade partners in 2010.[70][71] Taiwan has one of the world's lowestfertility rate and highhousing prices. Labor shortages, falling domestic demand, and decliningtax revenues are concerns as Taiwan's population decline is faster than otheradvanced economies.[72][73][74]
As an island economy with a lack ofnatural resources and comparatively lower domesticaggregate demand, Taiwan's highly educated human resources[75] would contribute greatly toValue addedInnovation management[76][77][78][79] for expanding[80] Taiwan's international trade.
Taiwan, as an independent economy, became a member of theWorld Trade Organization (WTO) asSeparate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (often shortened to "Chinese Taipei" - both names resulting from PRC interference in the WTO) in January 2002. In a 2011 report by Business Environment Risk Intelligence (BERI), Taiwan ranked third-best globally for its investment environment.[81]
Taiwan is the world's largest supplier of contract computer chip manufacturing (foundry services) and is a leadingLCD panel manufacturer,[82] DRAM computer memory, networking equipment, and consumer electronics designer and manufacturer.[53] Major hardware companies includeAcer,Asus,HTC,Foxconn,TSMC andPegatron. Textiles are another major industrial export sector, though of declining importance due tolabor shortages, increasing overhead costs, land prices, andenvironmental protection.[83]
Imports are dominated by raw materials and capital goods, which account for more than 90% of the total. Taiwan imports most of its energy needs. The United States is Taiwan's third largest trading partner, taking 11.4% of Taiwanese exports and supplying 10.0% of its imports.[70][71] Mainland China has recently become Taiwan's largest import and export partner. In 2010, the mainland accounted for 28.0% of Taiwan's exports and 13.2% of imports.[70][71] This figure is growing rapidly as both economies become ever more interdependent. Imports from mainland China consist mostly of agricultural and industrial raw materials. Exports to the United States are mainly electronics and consumer goods. As the Taiwanese per capita income level has risen, demand for imported, high-quality consumer goods has increased. Taiwan's 2002 trade surplus with the United States was $8.70 billion.
The lack of formaldiplomatic relations between the Republic of China (Taiwan) with Taiwan's trading partners appears not to have seriously hindered Taiwan's rapidly expanding commerce. The Republic of China maintainscultural and trade offices in more than 60 countries with which it does not have official relations to represent Taiwanese interests. In addition to the WTO, Taiwan is a member of theAsian Development Bank as "Taipei, China" (a name resulting from PRC influence on the bank) and theAsia-Pacific Economic Cooperation (APEC) forum as "Chinese Taipei" (for the same reason as above). These developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy.
Taiwan is a member of theAsian Development Bank (ADB), theWorld Trade Organization (WTO), and theAsia-Pacific Economic Cooperation (APEC). Taiwan is also an observer[84] at theOrganisation for Economic Co-operation and Development (OECD) andInternational Energy Agency (IEA) as Member[85] under the acronym ofChinese Taipei,[86] and a member ofInternational Chamber of Commerce as Chinese Taipei.[87] Taiwan signedEconomic Cooperation Framework Agreement with People's Republic of China on 29 June 2010. Taiwan has also signed free trade pacts with Singapore and New Zealand.[88][89] Taiwan applied for the membership in theAsian Infrastructure Investment Bank in 2015.[90]
TheEconomic Cooperation Framework Agreement (ECFA) with the People's Republic of China was signed on 29 June 2010, inChongqing.[91][92] It could potentially widen the market for Taiwan's exports. However, the true benefits and impacts brought by ECFA to Taiwan's overall economy are still in dispute.[93] The newly signed agreement will allow for more than 500 products made in Taiwan to enter mainland China at low or notariffs.[94] As of 2021, Taiwan's exports to the People's Republic of China (including Hong Kong) totaled about US$270 billion per year, which is equivalent to more than 40% of Taiwan's total GDP.[95] The government is also looking to establish trade agreements with Singapore[96] and the United States.[97]
Industrial output has gradually decreased from accounting for over half of Taiwan's GDP in 1986 to just 31% in 2002.[83] Industries have gradually moved to the capital and technology-intensive industries from more labor-intensive industries, with electronics and information technology accounting for 35% of the industrial structure.[83] 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.[98] These industries are in the pre-mature stage of themanufacturing industry in various global economic competitions, and growing from the over-reliance from theoriginal equipment manufacturer andoriginal design manufacturer models.[99][100] TheInstitute for Information Industry[101][102] is responsible for the development of theIT andICT industry[103] in Taiwan.Industrial Technology Research Institute is the advanced research center for applied technology for the economy of Taiwan.[104] Theart industry is significant with sales worth $225.4 million made domestically in 2019. Taiwanese collectors and artists are also prominent in the global art market.[105]
The "e-Taiwan" project launched by the government seeks to use US$1.83 billion to improve the information and communications infrastructure in Taiwan in five major areas: government, life, business, transport, and broadband.[106][107] The program seeks to raise industry competitiveness, improve government efficiency, and improve thequality of life, and aims to increase the number of broadband users on the island to 6 million.[107] In 2010, Taiwan's software market grew by 7.1% to reach a value of US$4 billion, accounting for 3.3% of the Asia-Pacific region market value. The digital content production industry grew by 15% in 2009, reaching US$14.03 billion.[106] Theoptoelectronics industry (includingflat panel displays andphotovoltaics) totaled NT$2.2 trillion in 2010, a 40% jump from 2009, representing a fifth of the global market share.[108] The economy of Taiwan is a partner in the GlobalValue Chains ofElectronics Industry.[109]Electronic components and personal computer are areas of international strength of Taiwan's Information Technology industry.[110]
Taiwan has a growingstartup sector.[111][112]
Taiwan is a major producer ofsporting goods with NT$59.8 billion of production in 2020, 40–50% of production is indoor fitness equipment.[113] Taiwan is the global leader ingolf equipment with 80% of global production concentrated in the country.[114] The four largest golf OEM are all Taiwanese, however, these firms are increasingly selling products under their own brands.[115]
The Taiwanesebicycle industry is significant. Production peaked at ten million units a year in the 1980s but declined as low end production moved abroad and domestic manufactures moved upmarket.Giant Bicycles andMerida Bikes are the largest Taiwanese bicycle manufacturers.Mountain bikes andebikes make up much of contemporary production.[116] In 2022 the bicycle industry hit a record $6 billion US in revenue.[117]
Thesemiconductor industry, including IC manufacturing, design, and packing, forms a major part of Taiwan's IT industry.[118] Due to its strong capabilities in OEM wafer manufacturing and a complete industrysupply chain, Taiwan has been able to distinguish itself from its competitors.[118][119] The sector output reached US$39 billion in 2009, ranking first in global market share in IC manufacturing, packaging, and testing, and second in IC design.[120]Taiwan Semiconductor Manufacturing Company (TSMC) andUnited Microelectronics Corporation (UMC) are the two largest contract chipmakers in the world,[121] whileMediaTek is the fourth-largestfabless supplier globally.[122] In 1987, TSMC pioneered thefabless foundry model, reshaping the global semiconductor industry.[120][123] FromITRI's first 3-inch wafer fabrication plant built in 1977[120] and the founding of UMC in 1980,[124] the industry has developed into a world leader with 40 fabs in operation by 2002.[118] In 2007, the semiconductor industry overtook that of the United States, second only to Japan.[125] Although the2008 financial crisis affected sales and exports,[126] the industry has rebounded with companies posting record profits for 2010.[127][128] The international industrial forecast of semiconductor manufacturing, which is the flagship industry of the economy of Taiwan that faces immense competition ahead with its American counterparts.[129][130] By 2020 Taiwan was the unmatched leader of the global semiconductor industry withTaiwan Semiconductor Manufacturing Company (TSMC) alone accounting for more than 50% of the global market.[131]
Taiwan's information technology industry has played an important role in the worldwide IT market over the last 20 years.[83] In 1960, theelectronics industry in Taiwan was virtually nonexistent.[132] However, with the government's focus on development of expertise with high technology, along with marketing and management knowledge to establish its own industries, companies such asTSMC andUMC were established.[133] The industry used its industrial resources and product management experience to cooperate closely with major international suppliers to become theresearch and development hub of the Asia-Pacific region.[83] The structure of the industry in Taiwan includes a handful of companies at the top along with many small and medium-sized enterprises (SME) which account for 85% of industrial output.[83] These SMEs usually produce products on anoriginal equipment manufacturer (OEM) ororiginal design manufacturer (ODM) basis, resulting in less resources spent on research and development.[83] Due to the emphasis of the OEM/ODM model, companies are usually unable to make in-depth assessments for investment, production, and marketing of new products, instead relying upon importation of key components and advanced technology from the United States and Japan.[83] Twenty of the top information and communication technology (ICT) companies have International Procurement Offices set up in Taiwan.[106] As a signer of theInformation Technology Agreement,[134] Taiwan phased outtariffs on IT products since 1 January 2002.[106]
Taiwan is a hub for global computing, telecommunications, and data management with a number of large server farms operating in the country. Google's data center in Changhua is believed to be the largest in Asia. Taiwan is well connected to the global undersea fiber optic cable network and serves as a substantial traffic interchange.[135]
Agriculture has served as a strong foundation for Taiwan'seconomic miracle.[136] It contributes 3% to GDP and the service sector makes up 73% of the economy. Afterretrocession from Japan in 1945, the government announced a long-term strategy of "developing industry through agriculture, and developing agriculture through industry".[137] As such, agriculture became the foundation for Taiwan's economic development during early years and served as an anchor for growth in industry and commerce. Whereas in 1951, agricultural production accounted for 35.8% of Taiwan's GDP,[137] by 2013, it had been vastly surpassed, and its NT$475.90 billion accounted for only 1.69% of the GDP. As of 2013[update], Taiwan's agriculture was a mixture of crops (47.88%), livestock (31.16%), fishery (20.87%), and forestry (0.09%).[138] Since its accession into theWorld Trade Organization and the subsequent trade liberalization, the government has implemented new policies to develop the sector into a more competitive and modernized green industry.[139]
Although only about one-quarter of Taiwan's land area is suitable for farming, virtually all farmland is intensely cultivated, with some areas suitable for two and even three crops a year. However, increases in agricultural production have been much slower than industrial growth. Agricultural modernization has been inhibited by the small size of farms and the lack of investment in better facilities and training to develop more profitable businesses.[139] Taiwan's agricultural population has steadily decreased from 1974 to 2002, prompting theCouncil of Agriculture to introduce modern farm management, provide technical training, and offer counseling for better production and distribution systems.[139] Promotion of farmmechanization has helped to alleviate labor shortages while increasing productivity; both rice andsugar cane production are completely mechanized.[140] Taiwan's main crops are rice, sugar cane, fruits (many of them tropical), and vegetables. Although self-sufficient in rice production, Taiwan imports large amounts of wheat, mostly from the United States. Meat production and consumption have risen sharply, reflecting a high standard of living. Taiwan has exported large amounts of frozen pork, although this was affected by an outbreak of hoof and mouth disease in 1997. Other agricultural exports include fish, aquaculture, and sea products, canned and frozen vegetables, and grain products. Imports of agriculture products are expected to increase due to the WTO accession, which is opening previously protected agricultural markets.[citation needed]
Due to the lack ofnatural resources on the island, Taiwan is forced to import many of its energy needs (currently at 98%).[141] Imported energy totaled US$11.52 billion in 2002, accounting for 4.1% of its GDP.[142] Although the industrial sector has traditionally been Taiwan's largest energy consumer, its share has dropped in recent years from 62% in 1986 to 58% in 2002.[142] Taiwan's energy consumption is dominated by crude oil & petroleum products (48.52%), followed by coal (29.2%), natural gas (12.23%),nuclear power (8.33%), andhydroelectric power (0.28%).[143] The island is also heavily dependent on imported oil, with 72% of its crude oil coming from the Middle East in 2002. Although theTaiwan Power Company (Taipower), a state-owned enterprise, is in charge of providing electricity for the Taiwan area, a 1994 measure has allowedindependent power producers (IPPs) to provide up to 20% of the island's energy needs.[144]Indonesia andMalaysia supply most of Taiwan's natural gas needs.[144] It currently has three operational nuclear power plants. A fourth plant under construction was mothballed in 2014.[145]
Although Taiwan's per capita energy use is on par with neighboring Asian countries,[146] in July 2005 theMinistry of Economic Affairs announced plans to cut 170 million tons ofcarbon dioxideemissions by 2025.[144] In 2010, carbon dioxide emissions have been reduced by 5.14 million metric tons.[147] In order to further reduce emissions, the government also plans to increaseenergy efficiency by 2% each year through 2020.[148] In addition, by 2015, emissions are planned to be reduced by 7% compared to 2005 levels.[148]
Taiwan is the world's 4th largest producer of solar-powered batteries and largestLED manufacturer by volume.[147] In 2010, Taiwan had over 1.66 million square meters ofsolar heat collectors installed, with an installation density that ranks it as third in the world.[149] The government has already built 155 sets ofwind turbines capable of producing 281.6 MW of electricity, and additional projects are planned or under construction.[150] Renewable energy accounts for 6.8% of Taiwan's energy usage as of 2010.[148] In 2010, thegreen energy sector generated US$10.97 billion in production value.[147] The government also announced plans to invest US$838 million forrenewable energy promotion and an additional US$635 million forresearch and development.[148]
Taiwan, as of 2017, is the world's thirteenth-largest steel exporter. In 2018, Taiwan exported 12.2 million metric tons of steel, a one percent increase from 12.0 million metric tons in 2017. Taiwan's exports represented about 3 percent of all steel exported globally in 2017, based on available data. The volume of Taiwan's 2018 steel exports was one-sixth that of the world's largest exporter, China, and nearly one-third that of the second-largest exporter, Japan. In value terms, steel represented just 3.6 percent of the total amount of goods Taiwan exported in 2018. Taiwan exports steel to more than 130 countries and territories. Over the decade from 2009 to 2019, Taiwan grew its steel exports by 24%. In 2018, the US imported 300,000 metric tons of pipe and tube products. Taiwan has developed a vast export trade to its most proximate neighbors in flat products. Taiwan'sstainless steel exports numbered 2018 about 500,000 metric tons.[151]
Taiwan is the fourth largest exporter of machine tools and machine tool components in the world. The greaterTaichung area is home to a cluster of machine tool manufacturers.[152]
Taiwanese companyTechman Robot Inc. is the world's second largest producer ofcobots.[153]
Theautomotive industry in Taiwan is significant, with Taiwanese firms increasingly invested in automotive electrification; 75% ofTesla, Inc.’s suppliers are Taiwanese.[154]
In 2017, Taiwan exported one hundred and sixty-two yachts.[155] In 2018 Taiwan was the fourth largest yacht building nation by feet of yacht built after Italy, The Netherlands and Turkey.[156] Taiwan is one of the largest fishing nations on earth and the associated fish processing industry is also significant.[157]
According to the 2019Forbes Global 2000 index, Taiwan's largest publicly traded companies are:
| Rank | Company | Revenues ($ billion) | Profit ($ billion) | Assets ($ billion) | Market value ($ billion) |
|---|---|---|---|---|---|
| 1 | Hon Hai Precision | 175.6 | 4.3 | 110 | 41.2 |
| 2 | TSMC | 34.2 | 11.6 | 68 | 222.4 |
| 3 | Cathay Financial | 3.5 | 0.1 | 73.0 | 4.1 |
| 4 | Fubon Financial | 21.9 | 1.6 | 250.6 | 14.9 |
| 5 | CTBC Financial | 16.7 | 1.2 | 187.2 | 12.8 |
| 6 | Formosa Petrochemical | 25.5 | 2 | 13.2 | 35.4 |
| 7 | Formosa Chemicals | 13.5 | 1.6 | 19.2 | 20.6 |
| 8 | Nan Ya Plastics | 11 | 1.7 | 18.6 | 19.9 |
| 9 | Formosa Plastics | 7.6 | 1.6 | 13.2 | 35.4 |
| 10 | China Steel | 13.3 | 0.8 | 21.9 | 12.6 |
| 11 | Chunghwa Telecom | 7.1 | 1.2 | 15.2 | 27.7 |
| 12 | Mega Financial Holding | 3.2 | 0.9 | 115.2 | 12.4 |
| 13 | ASE Group | 12.3 | 0.8 | 17.4 | 10.2 |
| 14 | Quanta Computer | 34.1 | 0.5 | 21.5 | 7.6 |
| 15 | Uni-President | 14.3 | 0.6 | 13.2 | 13.1 |
| 16 | Shin Kong Financial | 13.1 | 0.3 | 118.7 | 3.4 |
According to the 2022Fortune Global 500 Rankings, Taiwan's largest publicly traded companies are:
| Rank | Company | Revenues ($ billion) | Profit ($ billion) | Assets ($ billion) | Market value ($ billion) |
|---|---|---|---|---|---|
| 1 | Hon Hai Precision | 214.6 | 4.99 | 141.0 | 2.39 |
| 2 | TSMC | 56.8 | 21.21 | 134.4 | 446.25 |
| 3 | Pegatron | 45.2 | 0.73 | 24.4 | 5.67 |
| 4 | Compal Electronics | 44.3 | 0.45 | 19.4 | 3.42 |
| 5 | Quanta Computer | 40.4 | 1.20 | 25.9 | 10.48 |
| 6 | Cathay Financial Holding | 37.5 | 4.99 | 418.3 | 23.90 |
| 7 | Fubon Financial Holding | 32.2 | 5.18 | 378.9 | 26.92 |
| 8 | Wistron | 30.9 | 0.37 | 17.9 | 2.75 |
| 9 | CPC | 30.0 | -1.4 | 30.4 | 71.44 |
| Rank | Company | Revenues ($ billion) | Profit ($ billion) | Assets ($ billion) | Market value ($ billion) |
|---|---|---|---|---|---|
| 1 | Hon Hai Precision | 214.6 | 4.98 | 141 | 41.2 |
| 2 | TSMC | 34.2 | 11.6 | 68 | 222.4 |
| 3 | Cathay Financial | 3.5 | 0.1 | 73.0 | 4.1 |
| 4 | Fubon Financial | 21.9 | 1.6 | 250.6 | 14.9 |
| 5 | CTBC Financial | 16.7 | 1.2 | 187.2 | 12.8 |
| 6 | Formosa Petrochemical | 25.5 | 2 | 13.2 | 35.4 |
| 7 | Formosa Chemicals | 13.5 | 1.6 | 19.2 | 20.6 |
| 8 | Nan Ya Plastics | 11 | 1.7 | 18.6 | 19.9 |
| 9 | Formosa Plastics | 7.6 | 1.6 | 13.2 | 35.4 |
| 10 | Formosa Petrochemical | 25.5 | 2 | 16.3 | 22.3 |
| 11 | China Steel | 13.3 | 0.8 | 21.9 | 12.6 |
| 12 | Chunghwa Telecom | 7.1 | 1.2 | 15.2 | 27.7 |
| 13 | Mega Financial Holding | 3.2 | 0.9 | 115.2 | 12.4 |
| 14 | ASE Group | 12.3 | 0.8 | 17.4 | 10.2 |
| 15 | Quanta Computer | 34.1 | 0.5 | 21.5 | 7.6 |
| 16 | Uni-President | 14.3 | 0.6 | 13.2 | 13.1 |
The Labor Union Laws, legislated by theKuomintang (KMT) on the mainland, gave Taiwan workers the right to unionize. However, prior to the democratization of Taiwan, the functions of trade unions were limited under strict regulation and statecorporatism.[159] Under the Labor Union Laws, workers were only allowed to be organized at the companies, which means industry level unions were forbidden. Also, only one union could exist within each company or geographical area.[159] Special occupational groups such as teachers were not allowed to unionize.[160] The right to strike andcollective bargaining were also hamstrung by law.[161] The Collective Bargaining Agreement in 1930 stipulated that collective bargains were not legally valid without government approval.[161] The democratization in 1986 brought dramatic changes to union participation and policies. Between 1986 and 1992, unionized workers increased by 13%.[161] A number of autonomous, non-official trade unions emerged, including theTaiwan Confederation of Trade Unions (TCTU) which acquired legal recognition in 2000.[161] The amendments to the Labor Union Laws and Collective Bargaining Agreement both became effective in the early 21st century. The amended Labor Union Law lifted the limitations on special occupational groups from collective representation.[160] The Collective Bargaining Agreement Act in 2008 guaranteed trade unions the power to negotiate with employers.[161]
Taiwan's labor rights andemployment protections increased with its democratization progress in the 1980s, and it still has a relatively high level of employment protection compared to other East Asia countries.[162] Implemented in August 1984, Labor Standards Law was the first comprehensive employment protection law for Taiwan workers.[163] Prior to its implementation, the Factory Act was the primary law governing labor affairs, but was ineffective in practice because of its narrow coverage of businesses and issues and absence of penalties for violation.[163] In contrast, Labor Standards Law covered a broader range of businesses and labor affairs and detailed penalties for its violation. It regulated a period of notice before firing employees and also required a higher level ofseverance payment.[163] Other labor issues were also regulated by the law, including contract, wage, overtime payment, compensations for occupational accidents, etc.[164] Penalties for employer violation were also clear in the law, stating fines and criminal liabilities.[163]Council of Labor Affairs (CLA) was set up on 1 August 1987 to help with labor inspection and the enforcement of the Labor Standards Law.[164]
In Taiwan, companies with at least a single employee have the compulsion to contribute to the insurer's employment service insurance premium. The share of labor insurance is divided into a 7:2:1 ratio between employer, employee, and state.[165] As far as a contribution towards social security, companies should pay at least 6% of the wages of its employees towards the social security.[166][167][168]
Active labour market policies were carried out in Taiwan in the late 20th and early 21st centuries as a result of economic structural changes caused byglobalization anddeindustrialization.[169]Unemployment increased and reached approximately 5% in 2002 and 2009.[169] A set of policies was adopted to help the unemployed and provide jobs. The Employment Insurance Act of 2002 grants income security during unemployment but, at the same time, requires beneficiaries to use all available resources to find jobs.[170] The Multi-Faceted Job Creation Program, first introduced in 1999, creates job in the third sector groups, especially innonprofit organizations.[169] It subsidizes those companies to providevocational trainings and job opportunities.[171] The Public Sector Temporary Employment Creation Program directly addressed the2008 financial crisis. Unlike the Multi-Faceted Job Creation Programs, the Public Sector Temporary Employment Creation Program creates jobs in the government itself. From 2008 to 2009, the government was estimated to create 102,000 job opportunities through that program.[161] A job creation project was also implemented to help young people by subsidizing the hiring of young people in universities and private companies.[171]
On 30 July 1984, Taiwan implemented an eighty-six article Labor Standards Act under Presidential Order No.14069.[172] The act defined the standard work week as 40 labor hours with an eight-hour limit per day, permitting an overtime-included maximum of forty-eight labor hours per week.[159]
Article 25 of the Labor Standards Act upholds there will be no sexual discrimination in the conditions of workers,[172] however, because the Taiwanese culture and thus political economy traditionally "categorizes female employees as naturally marriage- and family-oriented," women are assumed to obtain employment in fields that are limited to these ideals.[173] As a result of feminist ideals becoming more prevalent with women seeking equal work conditions in modern societies such as Taiwan, even marital status policy and immigration policy have been affected as women seek less patriarchal roles to the point where Taiwanese men have sought higher rates of transnational marriages since the 1990s.[174]
In order to promote industrial research and development, the government began establishing science parks, economic zones which provide rent and utility breaks,tax incentives, and specialized lending rates to attract investment.[175] The first of these, theHsinchu Science Park was established in 1980 by theNational Science Council[176] with a focus onresearch and development in information technology andbiotechnology.[175][177] It has been called Taiwan's "Silicon Valley"[178][179] and has expanded to six campuses covering an area of 1,140 hectares (11.4 km2).[180] Over 430 companies (including many listed onTAIEX) employing over 130,000 people are located within the park, andpaid in capital totaled US$36.10 billion in 2008.[181] BothTaiwan Semiconductor Manufacturing Company andUnited Microelectronics Corporation, the world's largest and second largestcontract chipmakers,[121] are headquartered within the park. Since 1980, the government has invested over US$1 billion in the park's infrastructure,[177] and further expansion for more specialized parks have been pursued.[181] TheIndustrial Technology Research Institute (ITRI), headquartered within the park, is the largest nonprofit research organization in Taiwan and has worked to develop applied technological research for industry, including for many of Taiwan's traditional industries (such as textiles).[177]
Following the success of the first park, theSouthern Taiwan Science Park (STSP), consisting of theTainan Science Park and theKaohsiung Science Park, was established in 1996.[175] In addition to companies, several research institutes (includingAcademia Sinica) and universities have set up branches within the park with a focus onintegrated circuits (ICs),optoelectronics, and biotechnology.[181] The Central Taiwan Science Park (CTSP) was established more recently in 2003.[182] While the CTSP is still under development, many firms (includingAU Optronics) have already moved into the park and begun manufacturing operations.[182] Like the other parks, CTSP also focuses on ICs, optoelectronics, and biotechnology, with the optoelectronics industry accounting for 78% of its revenue in 2008.[181] These three science parks alone have attracted over NT$4 trillion (US$137 billion) worth of capital inflow,[177] and in 2010 total revenue within the parks reached NT$2.16 trillion (US$72.8 billion).[183]
TheLinhai Industrial Park, established in Kaohsiung in 1960,[184] is a well-developed industrial zone with over 490 companies focusing on other industries including base metals, machinery and repairs, nonmetallic mineral products, chemical products, and food and beverage manufacturing.[185] TheChanghua Coastal Industrial Park, located in Changhua County, is a newer industrial cluster with many different industries such as food production, glass, textiles, and plastics.[186]
Industrial andscience parks in Taiwan include:
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In 1949 Chiang Kai-shek had transferred to Taiwan the government, gold reserve, and some of the army of his Republic of China.
Taiwan's diplomatic isolation, low birth rate, rapidly aging population, and increasing competition from China and other Asia Pacific markets are other major long-term challenges. Taiwan's total fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Moreover, Taiwan's population is aging quickly, with the number of people over 65 expected to account for nearly 20% of the island's total population by 2025. President TSAI's administration has made little progress on the domestic economic issues that loomed large when she was elected, including concerns about stagnant wages, high housing prices, youth unemployment, job security, and financial security in retirement.
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