Taiwan: Economic and Political Outline

Economic Overview

After almost five decades of sound economic management, Taiwan has managed to go from an underdeveloped agricultural island, to an economic power that is a leading producer of high-technology goods. Taiwan has a dynamic capitalist economy in which the authorities' control of investment and foreign trade is gradually diminishing. Highly vulnerable to global economic shocks and fluctuations of the demand, the island was severely affected by the international financial crisis, with its economy contracting by -1.9% in 2009. TAfter a year of record growth in 2010 (10.7%), driven by an increase in exports, the economy maintained a more sustainable trend in 2011 (5.1%), however it slowed down at the end of the year. Due to its high exposure to the developments of the global economy, the island suffered from the economic downturn of its trading partners, especially of the eurozone. The expected decline in export is likely to inhibit growth in 2012, leaving the estimates at 3%.

The instability of global financial markets has again created difficulties for the Taiwanese economy. Monetary policy, which was tightened in 2010-2011 should again be relaxed and fiscal incentives introduced to compensate for the decline of exports. The recently reelected president Ma Ying-jeou has announced that the priorities of his second term would be to reduce social inequalities, create jobs, support innovation and guarantee a greater participation of Taiwan in the region's economic integration. In the long-term, Taiwan will have to deal with problems of population aging, low birth rate and diplomatic isolation.

The unemployment rate, which reached almost 6% in 2009, dropped to about 4.5% in 2011 and should continue to decline in 2012.

Main Sectors of Industry

The agricultural sector contributes very marginally to the GNP and employs 5% of the workforce. Taiwan's main crops are rice, sugarcane, fruits and vegetables. Taiwan has limited natural resources and croplands are cultivated intensely.

The secondary sector accounts for a significant part of the GNP. Even though traditional industries such as iron and steel, chemical products and mechanics still account for almost half the industrial production, new industries are more dynamic. Taiwan is one of the world's biggest suppliers of semi-conductors, computers and mobile telephones. It is also the world's biggest supplier of computer monitors.

Services contribute about 70% to the GDP and employ slightly under 60% of the workforce.
The country, which has to deal with the continuous relocation of labor-intensive industries to countries where labor is cheaper (especially China), will have to rely on new conversions, in order to move from a high-technology based economy to a services oriented economy.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

70.8/100

Position:

Mostly free

World Rank:

25/179

Regional Rank:

7/38

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Ministry of Economic Affairs
Council of Agriculture
Industrial Development and Investment Center, Ministry of Economic Affairs

Statistical Office

National statistics

Central Bank

National Central Bank

Stock Exchange

Taiwan stock exchange

Main Online Newspapers

The Economist Taiwan
Taiwan news

Political Outline

Type of State

Taiwan has for all practical purposes been independent for half a century but China considers it as a part of its territory and wants it re-united with the mainland. Legally, most nations and even the United Nations (UN) acknowledge the position of the Chinese government that Taiwan is a province of China. However in reality Taiwan (official name: Republic of China) is an independent republic state based on parliamentary democracy and has a semi-presidential form of government.

Executive Power

First country of Asia to have elected its president by the universal direct suffrage. President and Vice President are elected on the same ticket by popular vote for four-year terms (eligible for a second term). Election last held 22 March 2008 (next to be held in March 2012). Premier is appointed by the President; Vice premiers are appointed by the President on the recommendation of the Premier.

Legislative Power

Unicameral Legislative Yuan: 113 seats, 73 district members elected by popular vote, 34 at-large members elected on basis of proportion of island wide votes received by participating political parties, 6 elected by popular vote among aboriginal populations; to serve four-year terms
Parties must receive 5% of vote to qualify for at-large seats.
Last elections held in January 2008 (next to be held in January 2012).

Main Political Parties

Democratic Progressive Party or DPP (TSAI Ing-wen); Kuomintang or KMT (Nationalist Party: WU Po-hsiung); Non-Partisan Solidarity Union or NPSU (CHANG Po-ya); People First Party or PFP (James SOONG)

Current Political Leaders

President: MA Ying-jeou (since 20 May 2008) - Kuomintang
Head of government: Sean CHEN (since 6 February 2012) - Kuomintang

Next Election Dates

Presidential: 2012
Legislative Yuan (parliamentary):  2012

Indicator of Freedom of the Press

World Rank:

46/179

Evolution:

2 places up compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).