The Cabinet last week passed a four-year national development plan which aims to achieve average GDP growth of between 2.8 percent and 3.6 percent from next year to 2028 and increase GDP per capita from US$39,105 to US$42,787 over the same period.
The National Development Council said the government was confident of achieving the goal.
Taiwan could even catch up with Israel — which ranks 14th globally with a GDP per capita of US$55,535 — after surpassing the GDP per capita of Japan and South Korea, it said.
The most critical factors affecting GDP per capita are, assuming that the population remains unchanged, a country’s currency exchange rate and economic growth rate. The persistent rise in Taiwan’s GDP per capita in recent years reflects steady growth in the country’s economy and the local currency better maintaining its value in US dollar terms when compared with other countries.
For Taiwan to continue its growth and maintain its advantage over other regional economies, the country must maintain strong economic fundamentals and avoid uncertainties that might trigger capital flight and negatively affect exchange rates and economic growth.
The nation must also take advantage of technological innovations to increase productivity in traditional and service industries.
It should also achieve net zero carbon emissions to enhance the nation’s competitiveness.
The country’s economic success is built upon the thriving semiconductor industry, which feeds an insatiable global market for the most advanced chips for cars, 5G telecoms, smart devices and artificial intelligence applications.
Most of Taiwan’s export growth is from the information and communications technology (ICT) sector, with little from textiles, machinery, agriculture or other traditional manufacturing and service sectors.
While workers in the ICT industries have received increasing salaries and big year-end bonuses, their peers in other industries continue to face wage stagnation, which has persisted since 2000.
Those working in non-ICT jobs have little reason to celebrate the news that Taiwan’s GDP per capita might surpass that of Japan and South Korea.
This uneven industrial development has resulted in a few tech firms taking center stage in the economy, while the traditional manufacturing and services sectors (excluding financial firms) face continued income inequality due to limited wage growth.
In addition to raising the minimum wage, the government must assist non-tech manufacturing and service sectors in digital transformation and production upgrades, as combined they account for nearly 87 percent of the nation’s employment.
The growth in the nation’s GDP per capita is not too much of a cause for celebration, given that the fruits of the increase have been so unequally distributed among workers. The major beneficiaries have been shareholders.
According to the latest government statistics, the total labor compensation has consistently grown since 2012, but the ratio of labor compensation to GDP dropped from 45.77 percent in 2012 to 43.07 percent in 2021, a new low, while the ratio of corporate profits to GDP increased from 31.82 percent in 2012 to 36.41 percent in 2021, a new high.
Amid changes in the industrial structure, production model and employment dynamics, shareholders’ share of the benefits of Taiwan’s economic growth has gradually increased over the past 10 years or so, while workers’ share has steadily decreased.
Therefore, the government must look beyond the seemingly satisfying GDP statistics and produce policy incentives which encourage corporations to share more of their profits with workers.
This would help lessen the public’s growing sense of relative deprivation.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of
RSS