Taiwan’s economy has significantly grown due to a strong demand for electronics in the region – the country is traditionally recognized as an export-driven technology hub – and it has recorded its best economic performance since emerging from recession in April last year.
The turnaround in Taiwan’s economic fortunes has been credited to the demand for electronics – but that has been offset by a plunge in mainland tourists to the region according to official data.
The data disclosed that growth was 2.58% year-on-year in the September-December period, which represented the fastest expansion in Taiwan since the first quarter of 2015 when the economy at that time grew by 4.01%. The statistics represented the third successive year of growth in the country.
Taiwan is home to industry stalwarts such as Foxconn and Taiwan Semiconductor Manufacturing Company (TSMC) which is a key supplier for Apple’s iPhone.
Taiwan president Tsai Ing-wen has put forward a number of proposals aimed at further boosting the recovering economy – she has selected five initiatives, and has indicated she wants Taiwan to foster its own ‘Asian Silicon Valley’.
Economic commentators have stated that exports in the quarter increased by 11.73% - which was the most in five years and was driven by a boom in demand for electronic parts. The launch of the iPhone 7 series unexpectedly improved TSMC coffers during the same period.
In a statement issued by the Directorate-General of Budget, Accounting and Statistics said the increase was down to a demand in smart technology product applications. It read, “Production of electronic components continued to increase driven by the expansion of smart technology product applications.”
However, one negative aspect was the disappointing tourism performance of the coveted beauty spot which once seen droves of tourists visit on a regular basis. The number of Chinese visitors has fallen since Beijing-sceptic Tsai was elected last January, with speculation China is turning off the taps as a means of pressure on the Taiwanese leader.
Tourism operators were once overrun with tourists – but now Taiwan has become a victim of tour buses sitting idle and half-empty hotels feeling the pinch caused by significant drop in tourism numbers.
Some industry analysts have expressed their concern predicting that they don’t expect the strong export demand to continue to grow. Capital Economics economist, Gareth Leather told Bloomberg news that he thinks the recovery in Taiwan will soon ‘run out of steam’.
He said: “With weak global demand set to drag on exports and limited scope for more policy support, the recovery is likely to run out of steam soon.” Wednesday's release brings 2016 full-year growth to 1.4 percent, beating the government's estimate of 1.35 percent. It is forecasting economic growth of 1.87 percent in 2017.