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Taiwan - Miracle Growth
Taiwan has experienced one of the highest growth rates of any economy
in the world. From 1953-1990, the annual economic growth rate averaged
8.7%. During the 1970s, it averaged 9.7%. Gross National Product
(GNP) per capita income increased from US$ 3748 in 1986 to US$ 7510
in 1989, with an average growth of 8.5% between 1981 and 1990. If
such high growth rates continue at their present level, it is likely
that by the year 2000 Taiwan's GDP per capita will place it on par
with the developed nations of the world. Graph 1 depicts economic
growth in Taiwan since the 1950s, and presents a corresponding view
of Australia's economic growth patterns.
Graph 1
Annual Growth in Taiwan's
GDP (1952-1989)
Note: Australian data are for Financial Years ending
December 31. Taiwan data are for Calendar Years ending December
31 and based on 1981 prices. Source: The Parliament of the Commonwealth
of Australia, Taiwan: The Spectacular Growth of the 'Other China'
, Current Issues Paper No. 2, 1989-90.
Taiwan's reliance on the import of natural resources - particularly
oil- are the primary cause of fluctuations in the growth rate of
Taiwan's GDP. The Arab-Israeli War of 1973, and the Arab countries'
refusal to supply oil to the West and other 'unfriendly nations'
hit Taiwan's economy particularly hard.
The second decline in Taiwan's economic growth during the late
1970s is also in response to a crisis in the Middle East. This time
it was the Iranian Revolution of 1979 that lead to a doubling of
world oil prices. Whereas Australia's domestic oil supply softened
the effects of increases in oil prices, Taiwan's total dependency
on energy imports has meant that world oil shortages have had great
negative impact on its economy.
Despite Taiwan's volatile economic growth during periods of global
instability, annual increases in its GDP have substantially exceeded
Australia's in almost every year since 1959. Such high economic
growth offers Australia and the world many opportunities for trade
and investment. Particularly important is whether past economic
growth can be sustained in the future, and which sectors of Taiwan's
economy offer the best opportunities for foreign investors. To answer
these questions, it is necessary to explore further Taiwan's economy.
Following, therefore, is an in-depth analysis of Taiwan's economic
structure, which includes discussions on:
- Taiwan's Industry Structure
- Taiwan's International Trade
- Sectoral Share of Taiwan's GDP
- Savings and Investment in Taiwan
- The Public Sector Vs. Private Sector
- Foreign Investment and Finance in Taiwan
From these discussions, it is possible to identify those areas
of greatest potential in the Taiwanese economy.
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